2024 - May Edition

New ALICE Data: Wage Gains No Match for Inflation

We all know people who are ALICE: Asset Limited, Income Constrained, Employed — earning more than the Federal Poverty Level, but not enough to afford the basics where they live.

ALICE households and households in poverty are forced to make tough choices, such as deciding between quality child care or paying the rent — choices that have long-term consequences not only for their families but for all.

MICHIGAN OVERVIEW AND TRENDS

While many of these low-income workers saw their wages grow at the fastest rate in four decades, it wasn’t enough to eclipse the burden of inflation – making it nearly impossible for ALICE to keep pace. For a family of four with an infant and a preschooler, the costs of basics in Michigan, excluding tax credits, rose from $72,792 in 2021 to $78,684 one year later. Compounding the issue in 2022 was the loss of up to $15,000 in federal child tax credits and stimulus payments that this family had access to in 2021.

These findings add to a more than a decade-long trend: Since the end of the Great Recession, despite some ups and downs, the number of ALICE households in Michigan has been steadily growing/remained stubbornly high. From 2010 to 2022, the total number of households rose by 6%, households in poverty decreased by 6% — and the number of ALICE households grew by 20%.   

MONTCALM & IONIA COUNTIES OVERVIEW

The changes to the ALICE report do not come as a surprise to our office. Since the pandemic, United Way has been front and center helping to provide basic need assistance to those that need it most. In Michigan, 33% of families with children were below the ALICE Threshold. In Montcalm and Ionia Counties families with children (both one-parent and two-parent homes) saw a substantial increase in falling into the ALICE category. This type of longstanding disparities and inequality in our community just makes it harder for everyone to thrive.  

Locally our ALICE numbers have moved in the wrong direction with more families falling into ALICE with Montcalm moving from 44% to 45% and Ionia moving from 35% to 37%. Our ALICE households make too much income for any kind of public assistance and often do not have a reserve in their savings account to be able to handle life challenges such as car repair, fixing a roof, and lately just being able to keep up with the costs of childcare, housing, and food. 

Last year, United Way provided over 180,000 diapers and 248,000 feminine hygiene supplies to our schools and nonprofits. During the holidays we provided 16,000 lbs of food to food insecure children and homebound seniors. As we continue to provide resources to households in the community, we see the demand for the need increasing. Many of our local food pantries have reported that they are often not able to keep up with the demand for those who need a little extra food. While most of our local employers have increased wages, it just is not enough to keep up with the cost of inflation. That is why United Way continues to advocate for ALICE which is why supporting the Earned Income Tax Credit that was increased this past year was necessary. 

~Terry Legg, President & CEO

United Way of Montcalm-Ionia Counties

JOIN US IN MAKING A DIFFERENCE

We have the power to alter the course for our ALICE households. 

But we can’t do it alone.