Report analyzes cost of living and the difficulty of meeting it in southeastern Michigan

By: Brendan Losinski | Metro | Published June 6, 2021

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METRO DETROIT — Each year, the United Way for Southeastern Michigan releases a report that analyzes the state of poverty and living expenses in the southeastern Michigan area.

The ALICE Report, which stands for “Asset Limited, Income Constrained, Employed,” is designed to keep track of how households are keeping up with costs of living such as housing, food and medical care. The 2021 report, released April 27, said 39.4% of all households in Wayne, Oakland and Macomb counties fall below the ALICE threshold.

“The ALICE threshold is the difference between what people are currently making and what it actually costs to live,” said Bryan VanDoran, the United Way for Southeastern Michigan’s director of basic needs. “The current measurement to determine who qualifies for assistance programs is the federal poverty guidelines, but we know there are a lot of costs that aren’t factored into these guidelines. The ALICE measurement does.”

Of those that fall below the threshold, 12.9% fall below federal poverty guidelines while 26.5% do not have household incomes high enough to cover what ALICE considers a survival budget.

“These (federal poverty) guidelines were made in the ’60s. It’s been adjusted for inflation since then, but the cost of what are considered essential goods and services has risen far more than the consumer price index shows,” VanDoran explained. “Costs of essentials are rising at 3.4% annually while the standard consumer price index says that average rate of inflation is increasing at 1.8% each year.”

The federal poverty thresholds place a single adult as below the poverty line when they make less than $13,214 per year. They list a family with two parents and two children as being below the poverty line when they make less than $28,511. This is in sharp contrast to the ALICE findings, which state that a single adult needs to make $23,400 a year to live at subsistence level while a family with two parents, an infant and a preschooler needs to make $64,116 when taking factors such as health care, transportation, and child care into account.

Ernest Cawvey, the director of Macomb Community Action, which works with low-income families, said that he has seen firsthand how costs for essential services are rising faster than wages.

“The cost of food relative to other expenses has changed,” Cawvey said. “That’s why it’s important to track these costs and why the ALICE measurements have become more relevant. Rent, in particular, has placed a much higher burden on households.”

The 2021 ALICE Report states that 329,941 of Wayne County’s 689,270 households, or 48% of those households, live below the ALICE threshold. In Oakland County, 152,689 of its 508,464 households, or 30%, are below that level. In Macomb County, 127,696 of its 351,666 households, or 36%, are below the ALICE threshold.

“It’s the youngest and oldest households we’re seeing below the threshold — families with children and senior citizens,” said Cawvey. “Macomb County has a high percentage of senior residents. While 36% of households are below the line, 47% of seniors are below that threshold here. Single parent households also are a high area of vulnerability — 65% of single parent households are below that line, especially with child care costs taken into consideration. … When you need to be at work, child care costs are a required expense.”

“There’s no baked-in answer as to why costs are rising faster than wages,” added VanDoran. “There are a number of factors playing into it. The gig economy is filled with people trying to make ends meet, and they usually don’t offer benefits or health care. Health care costs, also, are rising. Transportation costs have been increasing, and insurance costs are very dependent on where you live and can really impact people. Child care is the highest expense for families across the country. When you look at the ALICE budget, these aren’t numbers that have padding with them. They are bare-bones, essential costs.”

Exacerbating these numbers is that COVID-19 has hit lower-income households hard, since many lost jobs or hours due to business shutdowns, closures or layoffs, as well as having little or no safety net for the loss of income or additional medical expenses.

“There’s a number of factors why COVID hit low-income families so hard,” said VanDoran. “The individuals who are above the federal poverty line but not making enough to survive never really recovered from the Great Recession. Costs have been increasing faster than wages. Costs of essentials are rising at 3.8% annually while they are bearing the brunt of the economic risk. They are the ones working as essential workers in grocery stores or restaurants. They were on the front lines of this pandemic.”

VanDoran said that the United Way and other organizations are working to counter this trend but real improvements require changes in government policy.

“We’re doing everything we can (to continue) to focus efforts on communities with the highest number of ALICE households. … There are 40 municipalities in the tri-county area around Detroit that have 40% or more of their population below the ALICE threshold. We’re working with organizations and our grant initiatives to help those communities and focusing our advocacy efforts toward these households.”

Cawvey said business practices need to change.

“There’s a national conversation going on right now about raising the minimum wage,” he said. “There’s also a narrative that public benefits are there to benefit those who are in poverty, but I think the narrative needs to shift to show, and I think the ALICE report supports this, that increased public benefits are benefiting employers since the public taxpayer is subsidizing the basic needs of low-income households instead of employers.”

Both claim one of the biggest hurdles to this problem is the perception that if someone isn’t making enough money to get by, they simply aren’t working hard enough. Cawvey said the data tell another story.

“It’s important to see that these people we’re talking about in the ALICE report are employed,” he said. “Their wage doesn’t match the cost of basic needs. It’s $15 an hour to meet the needs of a family of four; 58% of jobs in Michigan are below $20 an hour. The common stereotype is that these people should be doing something different, but these are people working full time and still not making enough to meet their needs. A lot of people think that if you’re working full time, you should be able to support yourself, yet a lot of people who are working full time still often need assistance. … The ALICE report shows you can be doing everything right and still struggle.”

More information is available at Those wishing to volunteer with the United Way or looking for more information can visit Macomb Community Action can be reached at (586) 469-6999. Those looking for help also can call 211 to be connected to social services.