High poverty, unemployment harm economic growth

Added December 22nd, 2014 by Alicia Guevara Warren | Email This Entry Email This Entry
Alicia Guevara Warren

Often touted as the “Comeback State,” Michigan’s economic recovery has not included everyone as reflected in the state’s high poverty and unemployment rates. Leaving people behind will only hinder Michigan’s potential economic growth, which has already showed signs of slowing.

A recent report ranking states based on multiple indicators of economic security and opportunity reveals the state’s major lack of investment in its people. On almost every factor from poverty to education to affordable housing, Michigan is ranked worst or second-worst among the Midwest states.

Let’s start with the state’s poverty rate, which is startling. With over 17% of people in Michigan, including 23% of children, living in poverty, our state ranks the worst in the Midwest at No. 37 in the country. The report cites a decline in support of assistance programs that has left children and families without needed help.

While other states have increased public assistance benefits to help them weather recent economic turmoil, Michigan sought to limit access by creating barriers. The state also cut back an important anti-poverty tool, the state Earned Income Tax Credit, (though there is now a welcome opportunity to fully restore the credit as part of the road funding package). When people cannot afford to meet their basic needs, they certainly are not supporting local businesses and boosting economic growth.

Similarly, while we should celebrate recent declines in the state’s unemployment rate, Michigan continues to have one of the highest rates in the country and in the Midwest. The state has work to do to ensure that we have a skilled and educated workforce to fill jobs as they are created. Michigan ranks 35th, 32nd, 31st, and 41st in high school graduation rates, higher education attainment, youth disconnected from school or the workforce, and the gender wage gap, respectively.

Even with a significant influx of jobs, if people are not trained, they will not be able to obtain higher paid jobs to support their families. Investment and support of the public school system and a lifelong learning from cradle to career model are necessary commitments.

Other states are doing better partly because they have chosen to increase investments in public assistance, EITC, education, and other proven policies that lift people out of poverty. Bottom line: Michigan must make people a priority to boost economic growth. Supporting the ballot proposal in May that increases funding for education and restores the state EITC as a part of the road funding solution is a step in the right direction.

— Alicia Guevara Warren

One Response to “High poverty, unemployment harm economic growth”

  1. The demand for solar voltaic panels and wind turbines would necessitate building factories, best we locate those factories in such neighborhoods with high unemployment rates, and build our way to a better future …

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