When people have less disposable income, consumer spending
goes down, forcing businesses to lay off workers or shut down entirely. This
means less revenue for the state as incomes decrease and the tax base shrinks.
With high long-term unemployment in Michigan, many Michiganians have had drops
in their income, thus impacting their ability to spend. Michigan’s median
household income of $45,413 dropped by 11 percent over the past five years, the
second highest drop in the U.S.
Poverty
Poverty in Michigan was 16.8 percent in 2010 and child
poverty was 23.5 percent. Though 41 percent of those living in poverty worked
during 2010, total poverty and child poverty have grown by more than 50 percent
over the past 10 years and Michigan’s family poverty rate is the fourth fastest
growing in the nation. Isabella County had the highest poverty rate at 32.5
percent and more than half of Michi-gan’s counties had poverty rates of at
least 15 percent.
Children
Children have been especially harmed. Child homelessness
grew by 40 percent between the 2009–2010 school year and the 2010-2011 school
year. More than 31,000 children in Michigan are homeless and more than 700,000
are on food assistance. Fourteen Michigan counties had more than one-third of
children in the county living in poverty. In Lake County, 45 percent of
children were in poverty in 2010. Charlevoix, Macomb, Monroe, Oakland and
Ottawa counties have had their child poverty rate grow by at least 50 percent
since 2006.
Unemployment
Michigan led the nation in unemployment between 2006–2009.
The state has not experienced the current level of unemploy-ment since the
early 1980s. The changes over the last decade have been extreme, with
unemployment growing by more than 200 percent. Seventeen counties had
unemployment rates of 15 percent or greater in 2010. Baraga County had the
high-est unemployment rate—23.3 percent of the county was jobless. All but
three counties had unemploy-ment double over the past decade. Allegan,
Livingston, Oakland and Ottawa counties all had unemployment rates that
tripled. Fortunately, Michigan’s unemployment rate has started to decrease over
the last few months, but reaching pre-recession employment levels will take
years.
Public Structures
Although recent legislation was passed to reduce the
amount of time that Michiganians receive cash assistance, the average number of
months that a household is on cash assistance has declined by
42 percent since 2001. Sixty-five percent of Michi-ganians getting cash
assistance receive benefits for 12 months or less. One-quarter of recipients
are on cash assistance for three months or less. These numbers are from before
the 48-month time limit changes were made. In 2011, the average number of
months a household received cash assistance was 14.9.
Michigan’s recession has forced many to rely on the public
structures that help children and families until the economy stabilizes. A
quarter of the state’s population received some sort of help in 2011.
Nationally, studies have shown that two-thirds of American adults will rely on
a safety net program during their lifetime. Public structures that help children
and families also work to stabilize incomes and consumer spending and speed up
economic recovery. Cash assistance, food assistance, unemployment insurance and
home-lessness prevention can help provide the temporary relief needed by so
many families in Michigan as well as bolster the economy so that it can grow
and thrive. Policies that seek to undermine these programs will only slow the
state’s recovery.
Policy Recommendations
Instead of focusing on making government assistance
programs more punitive, now is the time to expand these short-term support
programs. For Michigan to be truly competitive in the future, it must have the
people and infrastructure that will attract investments in the state. For
economic recovery to be possible, the state must invest in its people.
Michigan’s financial future will be greater if its economy is designed to make
sure all people in the state are able to maintain stability and economic
balance. Michigan’s economy must work for everyone, and not just those at the top
of the income scale.
