Michigan child poverty way above pre-recession rate

Contact: Judy Putnam at (517) 487-5436

Census: Michigan’s poverty rate remains high, incomes stagnant
Hardship continues as Michigan fails to make investments that reduce poverty

About one in every four kids in Michigan lived in poverty in 2012 with the child poverty rate remaining nearly 30 percent higher than before the Great Recession, the latest U.S. Census Bureau data released today shows.

Michigan’s child poverty rate remained stubbornly high in 2012, at 24.5 percent, continuing the pain of the recession and underscoring the need for Michigan to do more to help struggling people and give them the tools to lift themselves out of poverty. Total poverty held at 17.4 percent while median annual income remained the same at just under $47,000.

Since the recession, Michigan lawmakers have cut funding for schools, community colleges, transportation, tax credits for working poor families and other key services that build a strong economy with good jobs that can help struggling families climb into the middle class. Continued failure to invest in these important services will hurt Michigan’s economic recovery and make life harder for these families.

“When Michigan fails to invest in our communities, it takes money out of the local economy and makes it even harder for families to get back to where they were five years ago,” said Gilda Z. Jacobs of the Michigan League for Public Policy. “The course we are on right now continues the pain of the recession, which has already caused so much harm.”

In 2007, before the Great Recession, Michigan’s child poverty rate was 19 percent while total poverty was 14 percent. That means child poverty remains nearly 30 percent higher in 2012 than before the Great Recession while total poverty is nearly 25 percent above pre-recession times.

Help for struggling families from the state and federal government has been found to have long-term payoffs for kids, including better school performance, higher earnings as adults, and better health outcomes.

Michigan’s policymakers will continue to face challenges next year as they create the state’s budget for Fiscal Year 2015. Restoring the state Earned Income Tax Credit (cut from 20 percent of the federal credit to 6 percent in 2011) and reinvesting in the state education system are needed. A balanced approach that includes new revenue will allow Michigan to invest in services that are crucial to children and working poor families already struggling to get by and it will improve the economy long term.

Michigan has already suffered through a decade of budget cuts, resulting not only from state and national economic declines, but also from tax and budget policies that reduced the state’s ability to raise needed revenues.

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The Michigan League for Public Policy is a nonpartisan, nonprofit research and advocacy organization dedicated to economic opportunity for all. It convenes the Prosperity Coalition.