What’s your agenda for Michigan?


Consider this: This November, voters will elect a governor, all 38 state senators and all 110 state representatives.

Clearly, it’s an important year for our state’s future. The Center for Michigan, described by founder Phil Power as a nonpartisan “think and do tank,” wants your input. What issues do you want elected officials to address on the campaign trail – and in the state Capitol once they are elected?

The League is hosting a Community Conversation, one of many held around the state, from 1 to 2:30 p.m. Monday at the Greater Lansing Housing Coalition, 600 W. Maple St. Lansing. (more…)

Sequestration hits Michigan housing

Some 3,000 fewer low-income households in Michigan — including seniors, those with disabilities and families with children — used housing vouchers to rent private housing in December, compared with a year ago, according to new estimates from the Center on Budget and Policy Priorities.

That’s the fallout from across-the-board federal sequestration cuts, which started nearly a year ago. The projections were based on new Department of Housing and Urban Development data. (more…)

Income tax rollback? It’s the pits

Contact: Judy Putnam at (517) 487-5436

Income tax rollback in Michigan? It’s the pits

LANSING, Mich. — The Michigan League for Public Policy today served up an important message to lawmakers: An income tax rollback will help those at the very top who have already benefited from the economic recovery while leaving the rest of their constituents behind. (more…)

Slicing Up the Income Tax Cut Proposal

Fact sheet PDF

Proposals to roll back the personal income tax in Michigan will not create jobs or grow our economy and will disproportionately benefit the wealthiest taxpayers the most.

In fact, most of the benefits of a cut in the state’s personal income tax from 4.25% to 3.9% would flow to Michigan’s wealthiest taxpayers, according to an analysis by the Institute of Taxation and Economic Policy, a Washington, D.C.-based research group that uses a sophisticated model of the tax system.

At a time when inequality and poverty are already high, the rollback would offer:

  • low-income taxpayers (average income of $10,600) enough to buy a bakery-made cherry pie ($12 on average for the bottom 20% of earners).
  • middle-income taxpayers (average income of $45,700) enough to buy a used dough mixer ($88 on average for the middle 20%).
  • those at the very top of the income scale (average income of $971,600) enough for a round trip for two to Paris, where they could visit all of the sights and have enough left over to enjoy French pastry at a café ($2,618 on average for the top 1%).

In addition, nearly one in four (23%) of Michigan households would receive no tax cut at all—including more than half of the state’s poorest taxpayers (the bottom 20% of earners who make $18,000 a year or less).

By contrast, three of every five dollars in tax cuts (60%) would flow to Michigan’s wealthiest 20% of taxpayers who earn $89,000 a year or more, with the top 1% of earners—those making $362,000 and up—alone taking home a sizeable 17% of the tax cut benefits.

Across-the-board income tax cuts will not boost Michigan’s economy but would contribute to rising income inequality, and further drain resources from public schools, community colleges, universities, health care and public safety—the very services that fuel economic growth.

Recent polling shows that Michigan residents prefer investments in roads and schools over income tax cuts. Only 11% prefer an income tax cut.

FOX 47 News: Wage Hike Initiative Gets Going

It wasn’t a big turnout, by any means. Five people gathered outside the Capitol Saturday to drum up support for Raise Michigan’s campaign to increase the minimum wage. Feb. 23, 2014 — FOX 47 News


Raise Michigan raises hope

The possibility of a long-overdue increase to Michigan’s minimum wage is on the horizon with the kickoff of the Raise Michigan campaign to put the issue before voters on the fall ballot.

If successful, it will raise Michigan’s $7.40 an hour wage minimum wage to $10.10 over three years and index it to inflation. It also includes a gradual increase of the $2.65/hour “tipped” wage for restaurant servers.

With so many problems to report on – rising income inequality, growing number of low-income working moms and shrinking windows of opportunity for our young people – it’s good to be able to talk about a positive solution. (more…)

Making ends meet in Michigan: A basic needs income level for family well-being

Full report in PDF

The hourly wage needed to cover a family’s most basic expenses – housing, food, utilities, clothing, child care and transportation – cannot be measured with the federal poverty level or the minimum wage. This report provides a Basic Needs Income Level to show how much a family or individual needs to earn in order to meet basic needs without relying on public or private assistance. Making Ends Meet in Michigan is the fifth edition of the report, formerly known as Economic Self-Sufficiency in Michigan. The Michigan League for Public Policy produces this for the policymaker, the advocate, the social services or nonprofit administrator, and anyone else with an interest in the well-being of Michigan’s families. As a critical component in moving low-income families into the economic mainstream, this Basic Needs Income Level can be used in the following ways:

  • As an indicator for measuring the progress of Michigan’s working families toward economic security
  • As a guide for determining worker wages and benefits or assessing their adequacy
  • As an advocacy tool for promoting programs and policies that assist families in reaching economic security
  • As a benchmark by which to assess the quality of jobs created through economic development projects

Why is the Basic Needs Income Level Needed?

The federal government established the federal poverty threshold in 1965 to measure economic well-being and need. Since then, policymakers, researchers and government agencies have been using it to determine and measure poverty in the states and country.

Since the beginning of its use, however, many experts have expressed concerns that the federal poverty threshold is not an accurate measure. One problem is that it is based on the premise that families spend one-third of their household incomes on food, which is no longer true. Another is that the threshold is established only at the national level even though the cost of living varies among states and regions. As a result, many families cannot meet their basic needs with their wages alone, yet they are not counted as poor.

It is clear that there is an ongoing need for a benchmark that shows how much a Michigan individual or family actually needs to earn in order to meet their needs without public or private assistance. The Michigan League for Public Policy has responded to this need since 1998 by periodically publishing Economic Self-Sufficiency in Michigan, now called Making Ends Meet in Michigan.

How is the Basic Needs Income Level Determined?

Using established sources from government agencies and research organizations, we estimate the cost of providing for six areas of need for four household types: single person, single parent with two children, two-parent family with two children in which one parent works, and two-parent family with two children in which both parents work. For each household type, the six expenses are totaled and the tax owed (or refunded) is calculated to determine the Basic Needs Income Level. This report provides the Basic Needs Income Level for the four household types in each county as a monthly figure with the expenses broken down (page 8).

The Basic Needs Wage is the hourly wage that a full-time worker must earn in order to bring his or her family to the Basic Needs Income Level. The distinction between a Basic Needs Income Level and a Basic Needs Wage is important, because a household with two wage earners can more easily reach the Basic Needs Income Level than a household with only one wage earner, and because many low-wage earners work overtime or at more than one job in order to meet their needs. This report provides the annual and hourly Basic Needs Wage for the four household types in each county (page 25).

The largest expense for families is child care. A single parent with two children in Michigan needs an income of $21.23 per hour or $44,164 per year to meet basic expenses, nearly as much as a two-parent family in which both parents work, with only minor savings in food, clothing, and personal and household items. The total expenses are substantially lower for a two-parent family in which one parent cares for the children, because the family does not need to pay for child care.

We acknowledge that many families have opportunities and support systems to reduce some of their expenses. Some parents have relatives that help care for their children, and some two-parent families are able to arrange work shifts so that there is always at least one parent at home with the children. Some working parents live close to their place of employment or have carpool arrangements that reduce transportation costs. Unfortunately, many low-income and poor families do not have such supports or flexibility and as such are not able to reduce costs in these ways.

The Basic Needs Income Level has obvious limitations. Estimated monthly expenses identified in this report do not allow for savings or emergencies, nor do they account for common family expenditures related to a child’s education. Some similar calculations done in other states are far more generous in determining what common family expenditures constitute a need and include the cost of appliances, furniture, reading materials, entertainment (television, music and toys), union dues, and banking fees. The wages and incomes given in this report, however, reflect only the very basic expenses of families. It is a “bare bones” benchmark for economic security.

Calculating Expenses and Taxes: Sources and Methodology


This report uses the 2013 Fair Market Rent from the U.S. Department of Housing and Urban Development to calculate housing costs. The FMR equals the 40th percentile of rents in each county or metropolitan area and includes all utility costs except telephone service.1 (See Appendix A for individual county FMRs.)

We use the FMR for a one-bedroom unit to calculate the housing costs for a single individual and a two-bedroom FMR for a single-parent or two-parent family with two children. However, a three-bedroom housing unit may be more appropriate for families in which the two children are of opposite genders.

HUD considers housing to be “affordable” if its costs do not exceed 30% of a household’s income. At the Basic Needs Income Levels established in this report, the percentage of income spent on housing at Fair Market Rent is affordable. However, a single parent with two children in Washtenaw County earning minimum wage ($7.40 per hour) would spend 76% of total household income to rent a two-bedroom dwelling, and in Wayne County, 69%.


We base the cost of food on the U.S. Department of Agriculture’s Cost of Food at Home (March 2013), an estimation of food cost that takes into account age, gender and family size. The Low-Cost Food Plan is used for this report because it corresponds to the spending patterns of the bottom one-third of income groups. The plan assumes a nutritious diet using generic and less expensive foods, and assumes that ingredients for every meal and snack are purchased at the store and prepared at home. It does not include “convenience foods” such as TV dinners, canned soups, and frozen pizzas. The calculation assumes that adults are age 20-50 and that a family with two children has one child age 2 and one child age 3-5.

Although the Low-Cost Food Plan saves families considerable money, it takes up 39% of the income of a single parent with two children working full time at Michigan minimum wage, but only 15% of the income of the parent earning the Basic Needs Wage. Thus, the cost of food is a larger strain on a low-income family’s budget, taking into consideration that they must also pay for housing, transportation, clothing and household items, child care and healthcare.

Although the Low-Cost Food Plan assumes that families have access to food that is both nutritious and inexpensive, for many families this is not the case. Grocery stores located in low-income areas (both rural and urban) tend to charge higher prices than large suburban supermarkets and to be heavily stocked with highly processed convenience foods, while offering little in the way of fresh produce and other nutritious food items. Inadequate transportation forces many low-income families to spend more on food than their middle-class counterparts, while limiting their nutritional choices.

Child Care

We base child care costs on the 2013 Cost of Care Report by the Early Childhood Investment Corporation. Appendix B shows the average full-time (45 hours a week) day care costs for each age group, as reported by providers in child care centers and in family and group homes. Our child care cost estimate assumes all children are below age 5 and are not in school, and therefore require full-time child care while parents work. Child care costs are not included in the expenses for two-parent families in which only one parent is working (as it is assumed that the other parent is available to care for the children). For two-parent families in which both parents work, the calculations assume the parents both work full time on the same shift and therefore need full-time care.

While this report only calculates expenses for families whose children are all under age 5, parents of children over age 5 often need to pay for child care for any or all of the following reasons:

  • working outside of school hours (i.e., second or third shifts or weekends)
  • children requiring before- or after-school care
  • children requiring care during summer vacation and holiday breaks

Costs vary by the type of child care provider the family chooses. They range from a high of $753 per month for a child in Oakland County to $348 per month for a child in Lake County, with a state average of $509 per month for a child not yet in school. Care for school-age children, which is not figured into these calculations, tends to be slightly lower than for children not yet in school.

According to these estimates, full-time child care is the largest of a family’s expenses. A single parent with two children under 5 who is earning a Basic Needs Wage will spend around 30% of his or her income on child care expenses. If the same parent is working full time at Michigan’s minimum wage, he or she will not be able to afford child care, as that will consume 87% of his or her earnings.2

Health Costs

The healthcare costs in this report assume that the family does not have employer-sponsored health insurance and needs to buy it in the private market. We calculate the amount of the premium using the Marketplace Premium Estimator provided by the Michigan Department of Insurance and Financial Services, factoring in the federal subsidy that offsets part of the cost. We use the silver plan, which has low copays and deductibles and covers preventative care with no out-of-pocket costs. Adults are assumed to be 30 years old.

This estimator is provided by the state of Michigan as part of the online Health Insurance Marketplace mandated by the Patient Protection and Affordable Care Act, enacted in March 2010. Insurance plans on the Marketplace are required to adhere to certain rules that help contain patient costs and encourage preventative care. However, many low-income families will be covered by Medicaid as a result of the expansion signed into law by the governor in 2013, and as such will not have to purchase their insurance on the private market.

The Marketplace Premium Estimator can be found at http://www7.dleg.state.mi.us/perc/


We base household transportation costs on the assumption that families own a private vehicle, since access to adequate public transportation is limited in most areas of Michigan. Based on data from the U.S. Department of Transportation’s 2009 National Household Travel Survey, we estimate that to meet basic needs, a single person, single-parent family and two-parent family with one parent working must drive 696 miles per month for work, and a two-parent family with two working parents must drive 1,156 miles per month. Calculations for costs are based on the 2013 Internal Revenue Service Mileage Reimbursement Rate of 56.5 cents per mile, and do not include the cost of the purchase of a car.

While this report assumes a transportation expense rate for each family structure based on the method described above, it should be noted that transportation costs can vary among families depending on a variety of factors, including:

  • commuting distance to work
  • number of cars owned
  • age and condition of vehicle
  • access to public transportation
  • age of children
  • cost of insuring the car

This transportation cost estimate is a bare minimum, taking into account only the travel that is necessary for work, school, church, family business, shopping, errands and other essential family needs. It assumes that a two-parent family’s second car will be used only to transport one parent to and from work. Because most families also use their cars for purposes beyond these parameters (such as for entertainment and leisure), and because low-income parents in particular often have older cars with high repair costs not reflected in the IRS reimbursement rate, family transportation expenditures are often much higher than the amounts given here.

The working poor tend to spend less money than other workers on commuting expenses, but their costs amount to a significantly higher proportion of their income. The working poor who use their own vehicle to commute spend a median of 21% of their personal income on commuting expenses, and those who use public transit spend 13%. Many low-wage workers living in Detroit must commute to the suburbs for work due to the lack of jobs in the city. Because there is no regional public transportation system in metropolitan Detroit, such workers usually need to own and maintain a car, which cuts into their ability to meet other expenses. This underscores the importance of investment in public transportation as a strategy to help low-income and working poor families.

Source: U.S. Department of Transportation Statistics http://www.rita.dot.gov/bts/sites/rita.dot.gov.bts/files/publications/national_transportation_statistics/html/table_03_17.html, accessed May 13, 2013

Clothing, Household Necessities, Personal Care and Telephone

In this category, expenses related to clothing, personal care products and services, and household necessities are taken from the 2011 Consumer Expenditures Survey of the Bureau of Labor Statistics. Phone services do not include long-distance charges.


Federal, state and payroll taxes are estimated based on family income. They reflect receipt, when applicable, of the federal Earned Income Tax Credit, the federal Child and Dependent Care Tax Credit, the federal Child Tax Credit and the state Earned Income Tax Credit. State taxes estimated in this report are higher than those of previous years because of the Legislature’s elimination of the child exemption and the slashing of the state Earned Income Tax Credit from 20% of the federal credit to 6%.







1 The 40th percentile denotes the level at which the cost of 40% of rental housing in the area is lower while 60% is higher.

2 The average cost in Michigan of child care for two children under age 5 is $1,109 per month, but Michigan’s minimum wage is $7.40 per hour, or $1,282 per month at 40 hours per week.

Crain’s Detroit Business: Michigan minimum wage group gets ok to collect signatures for ballot question

The Board of State Canvassers on Wednesday unanimously agreed to allow the group Raise Michigan to begin collecting signatures to place a question on the November ballot to raise the minimum wage in Michigan to $10.10 an hour. Feb. 20, 2014 — Crain’s Detroit Business

MLive: Petition drive to hike Michigan’s minimum wage to $10.10/hr get go-ahead

A petition drive to raise Michigan’s minimum wage to $10.10 per hour got the go-ahead from the state Board of Canvassers. Feb. 19, 2014 — MLive

Widening income inequality in Michigan

Contact: Judy Putnam at (517) 487-5436
Fact sheet on Michigan income inequality

Increasingly unequal states of America: income inequality grows

The top 1 percent of income earners in Michigan made nearly 20 times the income of the bottom 99 percent in 2011, a new report on widening income inequality finds. And Michigan is one of only four states where the top 1 percent of income earners experienced rising incomes between 1979 and 2007, while the average income of the bottom 99 percent fell.

The Increasingly Unequal States of America: Income Inequality by State, published by the Washington D.C.-based Economic Policy Institute for the Economic Analysis and Research Network finds that all 50 states have experienced widening income inequality in recent decades. (more…)

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