ALICE Report Launch: How The Pandemic Effected Michigan and Muskegon County
BY CHRISTINE ROBERE, PRESIDENT AND CEO, UNITED WAY OF THE LAKESHORE
Who is ALICE? Since 2015, United Way of the Lakeshore has made the ALICE – Asset Limited, Income Constrained, Employed population a focus on our impact work.
ALICE Households span all races, ages, ethnicities, and abilities. They include workers whose wages cannot keep up with the rising costs of goods and services. Many of times, they are working two or more jobs and still cannot make ends meet. They live paycheck to paycheck and are forced to make impossible choices such as to pay the rent or buy food; receive medical care or pay for child care; pay utility bills or put gas in the car. ALICE may be your relative, friend, colleague or neighbor. ALICE may also be your health care provider, teacher, retail clerk, sanitation worker, and others. ALICE workers are the backbone of our economy, with the pandemic making it crystal clear just how much we need them.
New ALICE Report and It’s Findings
About the Report and Methodology. On April 26, the United for ALICE Researchers, Editors, and Analysts, released the most updated ALICE Report for the state of Michigan. This ALICE Report provides the first look at the extent of financial hardship in Michigan using ALICE metrics since the COVID-19 pandemic began. The pandemic has disrupted longstanding patterns in how and where people live, work, study, save, and spend their time. And the story of ALICE and the pandemic is still unfolding as this Report is being written, amid an ongoing health crisis and an economic and public policy landscape that continues to shift. In a time of change, United For ALICE remains committed to providing the most up-to-date local data possible on financial hardship in Michigan and across the U.S.
Two pillars of the ALICE measures are household costs and income. The Household Survival Budget calculates the cost of household essentials for each county in Michigan and relies on a wide range of sources for the budget items of housing, child care, food, transportation, health care, and a smartphone plan, plus taxes.
For household income, the ALICE measures rely on the U.S. Census Bureau’s American Community Survey (ACS). The ACS experienced such significant disruption in data collection in 2020 that the Census Bureau released only experimental estimates, which are not included in our analysis. By 2021, standard Census data collection had resumed.
Household costs are compared to household income to determine if households are below the ALICE Threshold. This includes both households in Poverty, with income below the Federal Poverty Level (FPL), and those that are ALICE, with income above the FPL but below the cost of basics. Our standard ALICE data is based on the ACS — both household tabulated data and individual data from the Public Use Microdata Sample (PUMS) records. In addition, this Report includes our analysis of two surveys that capture the experiences of a nationally representative sample of households during the pandemic:
• Federal Reserve Board’s Survey of Household Economics and Decisionmaking (SHED), October, 2019; November, 2020; and November, 2021
• U.S. Census Bureau’s COVID-19 Household Pulse Survey (Household Pulse Survey), August 19–August 31, 2020; September 14–November 14, 2022; and December 9–December 19, 2022
Economic Challenges Ahead for ALICE. The pandemic timeline shows a contracting economy in 2020 followed by a strong policy response in 2021. The government’s broad pandemic response was effective in preventing the kind of surge in financial hardship that was experienced during the Great Recession.
However, 39% of households were still living below the ALICE Threshold in Michigan in 2021. With COVID-19 continuing but pandemic relief benefits expiring, initial data from 2022 suggests that the economic situation has in fact gotten worse for ALICE, which in turn puts the wider economy at risk.
An analysis of recent surveys reveals that households below the ALICE Threshold are still facing food insufficiency, difficulty paying bills, reduced savings, and feelings of anxiety and depression. These challenges were first reported in The Pandemic Divide, and they are updated here with the most recent data from SHED (through November 2021) and the Household Pulse Survey (through December 2022).
These surveys also provide an alarming look at the breakdown of pandemic experiences by race/ethnicity, sex, sexual orientation and gender identity, and disability status. The differences here are even starker than when looking at income alone, giving credence to concerns that the pandemic is exacerbating racial and other inequities across all facets of life. The analysis reveals that, in particular, Black and Hispanic respondents, and lesbian, gay, bisexual, and transgender (LGBT) respondents, as well as those with disabilities, have been disproportionately impacted by the pandemic.
Warning signs
Food insufficiency. ALICE families experiencing food insufficiency are a canary in the coal mine, indicating larger problems beyond food. Shockingly, the rates of food insufficiency have remained elevated since the beginning of the pandemic. In the August 2020 Household Pulse Survey, respondents below the ALICE Threshold in Michigan were far more likely to report that theirhousehold sometimes or often did not have enough food in the prior seven days than respondents above the Threshold (18% vs. 6%); by November 2022, the rates were even higher for those below the Threshold, while slightly lower for those above (23% vs. 4%). Some demographic groups experienced higher than average food insufficiency (Figure 1). For example, 31% of Black respondents and 37% of respondents with disabilities below the Threshold reported not having enough food, compared to 11% of all Michigan households.
For households with children in Michigan, in August 2020, respondents below the ALICE Threshold were four times as likely as respondents above the Threshold to report that often or sometimes their children were not eating enough because they couldn’t afford enough food (20% vs. 5%); in November 2022 those rates were even higher, and the gap remained between those below and above the Threshold (22% vs. 6%).
With changes to the emergency pandemic food measures, including the ending of SNAP emergency allotments, many families will need to rely on the charitable food system that was designed for emergencies, but is increasingly an ongoing necessity.
Learning Loss. Following a year of widespread school closings and disrupted education, most students returned to in-person learning in the fall of 2021. The learning loss that accompanied remote learning has been widely reported. Not surprisingly, students in lower-income districts with fewer resources were hardest hit. Nationally, in 2021, 71% of parents below the Threshold said that their child was prepared for the academic year ahead, compared to 81% of parents above the Threshold. The National Center for Education Statistics (NCES) reported that nationally in 2022, scores for 9-year old students declined five points in reading and seven points in mathematics compared to 2020 — the largest average score decline in reading since 1990, and the first-ever score decline in mathematics. Drops were even larger for low income students as well as for Black and Hispanic students.
Behind on rent payments. According to the Household Pulse Survey, renter households below the ALICE Threshold in Michigan were more likely than those above the Threshold to report that they were not caught up on rent payments. In August2020, 20% of renters below the Threshold and 9% of renters above the Threshold were not caught up; by November 2022, the rate for renters below the Threshold dropped to 13% while staying the same for renters above the Threshold (at 9%). Renters who fall behind on rent are at greater risk for eviction, especially since the federal moratorium on evictions and foreclosures and state-level bans have now expired, and funding for rental assistance is running out. As a result, eviction filings are on the rise and are likely to increase in the near term.
Struggling to pay bills. During the pandemic, many ALICE households in Michigan reported difficulty paying for their usual household expenses. According to the Household Pulse Survey in August 2020, respondents below the ALICE Threshold were more than twice as likely as households above the Threshold to report that they found it somewhat or very difficult to pay for usual items such as food, rent or mortgage, car payments, and medical expenses (47% vs. 21%). By November 2022, rates were even higher, especially for those below the Threshold (57% vs. 25%).
Lack of savings. While many families were able to save during the pandemic, many ALICE families were not. As mentioned earlier, 41% of families below the ALICE Threshold in Michigan had set aside emergency savings or rainy day funds that would cover their expenses for three months in the event of sickness, job loss, economic downturn, or another emergency in November 2021, compared to 74% of those above the Threshold, according to SHED. The lack of savings will make it more difficult for ALICE families to withstand an emergency in the future.
Physical health. A September 2020 national survey by the Urban Institute found that 36% of adults (age 18 to 64) delayed or missed health care services, including dental care, primary care, or specialist visits; preventive health screenings; and medical tests. For those with one or more chronic conditions, a mental health condition, or a lower income, the likelihood of postponing or forgoing care was even higher. Parents also postponed care for their children. In the fall of 2021, Michigan households below the ALICE Threshold were almost twice as likely to report that they had missed, delayed, or skipped their child’s preventive check-up in the last 12 months as households above the Threshold (42% vs. 22%). These delays, especially when coupled with preexisting conditions, can contribute to more serious conditions in the future.
ALICE families were also more likely than wealthier families to report experiencing long COVID. According to the Household Pulse Survey, in November 2022, Michigan respondents below the ALICE Threshold were more likely to report having symptoms (such as fatigue, “brain fog,” difficulty breathing, heart palpitations, dizziness, or changes to taste/smell) lasting three months or longer that they did not have prior to having COVID-19 than respondents above the Threshold (35% vs. 27%).
Mental health. With these sustained challenges, it’s not surprising that people below the ALICE Threshold in Michigan were more likely to report feeling depressed or anxious than those above the Threshold. According to the Household Pulse Survey, in August 2020, 20% of respondents below the Threshold and 15% above the Threshold reported feeling nervous, anxious, or on edge nearly every day over the prior two weeks. As of November 2022, the rate rose even higher for those below the Threshold, while decreasing slightly for those above (27% vs. 12%). Similarly, respondents below the Threshold were also more likely to report feeling down, depressed, or hopeless than those above the Threshold in both 2020 (15% vs. 8%) and 2022 (17% vs. 6%). Some demographic groups experienced substantially higher rates of feeling anxious than the state average (Figure 2).
The lack of mental health resources during the pandemic has been widely recognized, and awareness is increasing, especially with the launch of the Nationwide Suicide and Crisis Lifeline (988). But there remains a severe shortage of mental health resources, especially for low-income families, and mental health providers struggle to meet increased demand.
Muskegon ALICE Data (2021 Point In Time Data)
Population: 176,511
Number of Households: 67,707 (2% change from 2019
Median Household Income: $55,462 (State Average: $63,498)
Labor Force Participation Rate: 56.9% (State Average 60.9%)
ALICE Households: 28% (State Average: 26%)
Households in Poverty: 14% (State Average 13%)
As circumstances change, households may find themselves below or above the ALICE Threshold at different times. While the COVID-19 pandemic brought employment shifts, health struggles, and school/business closures in 2021, it also spurred unprecedented public assistance through pandemic relief measures. In 2019, 28,669 households in Muskegon County were below the ALICE Threshold; in 2021 this number changed to 28,547, (a 0% change).
The Costs of Basics Outpaces Wages
The Household Survival Budget reflects the minimum cost to live and work in the modern economy and includes housing, child care, food, transportation, health care, a smartphone plan, and taxes. It does not include savings for emergencies or future goals like college or retirement. The Household Survival Budget is calculated at the county level and varies by household composition, as costs can vary greatly depending on location and household needs.
In 2021, household costs in Muskegon County were well above the Federal Poverty Level of $12,880 for a single adult and $26,500 for a family of four.
Financial Hardship is Not Evenly Distributed
Groups with the largest number of households below the ALICE Threshold tend to also be the largest demographic groups. However, when looking at the percentage of each group that is below the ALICE Threshold, some groups are more likely to be ALICE than others.
By addressing the disparities in financial hardship by county demographics, community members can move toward more equitable solutions.
United Way of the Lakeshore is uniting to inspire change and build thriving communities. Our Bold Goal – 10,000 more working families meet their basic needs by 2025. For more information, contact United Way of the Lakeshore at (231) 722-3134. Learn more about United Way of the Lakeshore at UnitedWayLakeshore.org, like the organization on Facebook and receive up to date information from Twitter at twitter.com/uwlakeshore.
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