Economic recovery leaves Michigan children behind

Michigan is the “comeback state,” so we’ve heard. But, for whom? Michigan has more children living in poverty now than it did in the last full year of the Great Recession. Not only that, but since 2008, there are more children whose parents lack secure employment and more children living in concentrated poverty. Children and families in Michigan are being left behind in the economic recovery.

According to the new 2015 Kids Count Data Book from the Annie E. Casey Foundation, Michigan’s ranking in overall child well-being has fallen for the second straight year. The state now ranks 33rd in the country overall, while other states that have chosen to invest in programs that support economic growth and people are doing better, like Minnesota, which ranks first in the country for overall child well-being.

The report, which focuses on key trends in child well-being in the post-recession years, ranks Michigan in four domains:

  • Education: 37th
  • Economic well-being: 33rd
  • Family and community: 29th
  • Health: 23rd

It is clear that the strategy to reduce taxes and disinvest in programs that support families has not worked. Even after significant tax breaks for corporations, parents are still struggling to find good-paying and stable jobs to achieve financial security for themselves and their children. The data book reveals that the number of children with parents without secure employment increased to 33%. That is a rate increase of 6% since the last year of the Great Recession and ranks Michigan in the bottom third of states.

We also continue to have an unacceptable number of children living in poverty and a widening economic gap between white children and children of color. The data book reports that the child poverty rate in Michigan increased by 26% with nearly one in every four children living in poverty, including nearly one in every two African American children and almost one in every three Latino children. Also startling is the increasing number of children living in high-poverty neighborhoods. The rate increased by 21%.

Given the impact that poverty has on educational outcomes, it isn’t surprising that the state’s lowest ranking is in education. The number of students considered not proficient in math and reading stagnated over the period in the data book. These trends occurred at the same time that the state made cuts in education spending. Although, in the upcoming budget year, over $31 million has been dedicated to initiatives and programs to improve third-grade reading, including some funding for early childhood investments—critical to long-term outcomes.

The state has had some substantial wins in children’s health since the Great Recession, such as a continued reduction in the number of kids without insurance, the number of teen births, and the number of teens using alcohol and drugs. However, these gains are overshadowed by the large number of kids living in poverty and poor educational outcomes.

If we are really to help children in our state thrive, we need to understand the importance of providing parents with the tools and support they need. Taking a two-generation approach is a proven practice to improve outcomes for children by ensuring that parents have access to opportunities like adult education, higher-wage jobs with benefits, and quality affordable child care. We also need a fair tax system that includes the state Earned Income Tax Credit, a proven poverty reduction tool. And, we need to continue strong investments in early childhood programs to ensure that kids are ready to learn by the time they get to school.

 – Alicia Guevara Warren

Young but not invincible: Young adults rely on credits too

When I graduated law school in 2008, I got rejection letter after rejection letter. I applied for every job you could imagine – part time, full time, hourly, salaried – the jobs just weren’t there. I eventually landed in a great office, but many millennials–those born between 1981 and 1997—who were just graduating high school, college, or from graduate programs, weren’t so lucky.

The job market was the worst in decades – record high unemployment rates, collapse of the Big Three, and the bursting of the housing bubble made jobs scarce. Census comparisons released at the end of last year showed that millennials have lower median earnings and are living in poverty at a higher percentage than their parents were at the same age, despite having a higher percentage of the population with postsecondary education. Additionally, millennials are more burdened with student debt than previous generations. The economic downturn resulted in a record high percentage of young adults moving back in with their parents.

This is precisely why young people should care about the Earned Income Tax Credit and the Child Tax Credit. The EITC is a refundable tax credit intended to at least partially offset federal payroll taxes of low- to moderate-income working taxpayers. The credit amount varies depending on marital status, number of dependent children, and annual income. The Child Tax Credit, which intends to reduce the cost of child rearing, provides a $1,000 credit per eligible child and may be partially refundable. According to the latest data, more than 800,000 taxpayers in Michigan received the EITC and more than 525,000 received the refundable portion of the CTC in 2013. These tax credits encourage work, help lift families out of poverty, and improve the lives of children.

According to a recent report from the Center on Budget and Policy Priorities, 13.9 million millennials nationwide received the EITC, refundable part of the CTC, or both in 2012. The credits averaged $2,200 and $1,300, respectively. Michigan had the 10th highest number of recipients among all states and Washington DC at 393,000. Nationwide, the EITC and CTC together helped keep 1.8 million millennials, and their 1.9 million children, out of poverty.

Expansions enacted in 2009 and later extended, boosted both the EITC and CTC, allowing more individuals to qualify and providing for greater tax relief. However, these expansions are set to expire at the end of 2017. If we allow these to lapse, 6.3 million young people, including 195,000 in Michigan, will lose all or part of their EITC or CTC, pushing about two-thirds of them into or deeper into poverty.

The good news is that many proposals recommend keeping the EITC and CTC as they are currently structured and some recommend expanding the EITC. Interestingly, President Obama and Congressman Ryan have similar proposals to expand the EITC for more childless workers. This would disproportionately benefit young workers, who are waiting longer to get married or have kids than previous generations.

The Great Recession was hard on a lot of people, and while we are recovering, we haven’t fully recovered. Extending and expanding the EITC and the CTC is just good policy. Congress should move sooner on these provisions, to provide certainty and stability, instead of waiting until the last minute.

– Rachel Richards

 

Making kids count in the state budget

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Conditions for Michigan’s kids are progressing in some areas of child well-being but in others…. well, let’s just say we’ve got some major work ahead of us, particularly when it comes to economic security. That’s the upshot of the newly released Kids Count in Michigan Data Book.

Fortunately, the budget plan spelled out by Gov. Rick Snyder last month does a good job in a tight budget year of addressing inequities by making some investments that will drive improvements for Michigan’s kids.

Most welcome is a $49 million initiative, including $24 million for child care quality improvements, to increase the chances of more children reading proficiently by the end of third grade.

(more…)

Child poverty in the 21st century

The number of Michigan children living in families with income below the poverty level drops by half when tax and non-cash benefits are included as income, according to the latest analysis from the national KIDS COUNT project at the Annie E. Casey Foundation.

The percentage of the state’s children who would be living in poverty if no government program benefits and tax credits were available, however, stood at 30 percent, as calculated by the Supplemental Poverty Measure. (more…)

Why kids count

Recent news reports celebrate the decline in the unemployment rate and the quickened tempo of the recovery. But four years into the recovery, Michigan’s child poverty rates remain consistently high.

In 2013, one of every four children in Michigan lived in a family with income below the federal poverty level (roughly $18,800 for a single-parent family of three and $23,600 for a two-parent family of four), according to the latest Kids Count in Michigan Data Book, released today. (more…)

Happy 40th Birthday, EITC!

Today is EITC Awareness Day, and this year marks the 40th anniversary of the widely recognized tool that lifts millions of working families and children out of poverty each year. States have the opportunity to build on the federal credit, which Michigan does. However, in 2011 the state’s Earned Income Tax Credit was cut leaving behind over 15,000 families in poverty in 2012. On May 5, the voters will have the opportunity to restore the credit by supporting an increase in the sales tax by one penny.

The Michigan EITC is only available to families who have earned income from working. The credit ensures that working families are better able to make ends meet. When combined with the federal EITC, working families are lifted out of poverty and children experience better outcomes, such as improved infant and maternal health; better school performance; greater college enrollment; increased work and earnings in the next generation; and Social Security retirement benefits. All of which also benefit Michigan’s economy. (more…)

More child care oversight needed

Every day in Michigan, parents head out to work with their young children in tow, dropping them off at local child care centers or homes. Child care is a necessity for many working families because they rely on two incomes to make ends meet or because they are raising children as single parents.

Yet oversight of health and safety requirements is stretched far too thin in Michigan, a new policy brief from the League concludes. (more…)

High poverty, unemployment harm economic growth

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. (more…)

Celebrating good public policy in Michigan

Restoring the Earned Income Tax Credit, part of the bipartisan compromise on road funding approved early today, will be a boost to struggling families across Michigan.

If voters agree to the package, it will put extra dollars into working households where families have the hardest time making ends meet. It’s designed to offset additional costs from an increase in the state sales tax and wholesale gas tax to pay to fix Michigan’s battered roads. (more…)

Michigan Families Continue to Struggle Since Recession

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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