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New data from the U.S. Census Bureau’s 2023 American Community Survey (ACS) shows that Michigan’s official poverty rate remained largely stagnant over the past two years and has worsened since before the pandemic.
The good news is that policymakers have the tools to make lasting improvements to lift up families in our state. The question is: will they use them?
According to the ACS data, Michigan’s overall 2023 poverty rate was 13.5%, which was higher than the national poverty rate of 12.5% and did not statistically change from 2022. And Michigan’s 2023 child poverty rate also came in higher than the national child poverty rate at 17.6% despite a slight decrease from the prior year.
The end of pandemic-era federal relief and the rising costs of basic goods and housing have undoubtedly stressed family budgets here in Michigan and eroded wage gains.
The ACS shows that while median rent went up in 2023, household income decreased slightly. When looked at together, the numbers indicate that the average Michigan renter is trying to get by with less money and more to pay in rent. Additionally, the share of Michigan households earning less than $10,000 a year increased by .4% from 2022 to 2023, while nationally the increase was only .1%.
Michigan has made some great strides in recent years to continue to fight the persistent challenge of poverty in our state, including the historic boost of the state Earned Income Tax Credit (EITC) from 6% to 30% of the federal credit, the use of more Temporary Assistance for Needy Families (TANF) funding for basic cash assistance and continued state investment in the trailblazing Rx Kids program. However, there is more work to be done.
Looking at what has worked in states with lower poverty rates and what was effective in bringing supplemental poverty down to an all-time low during the pandemic will be particularly helpful in guiding policy choices moving forward. For example, if Michigan were to expand the state EITC to include workers under age 25 or over age 64 without qualifying children and immigrants who pay taxes, but don’t have a Social Security Number, the credit would reach more Michiganders and move the needle on poverty in our state in the right direction.
And if Michigan were to join the 15 states that already have a state Child Tax Credit and make it fully refundable, our state could reach more Michigan kids living in poverty by addressing some of the shortcomings of the current federal credit, which leaves far too many kids out.
Continuing to invest in direct cash programs, like Rx Kids, which provide unrestricted, no-strings-attached income to families in need, is also key to lifting up families by supplementing our country’s social safety net programs.
Michigan is at a crossroads and there is a choice to be made right now. We can leave things how they are and potentially watch poverty in our state continue to worsen, or we can continue to take bold, enduring strides in mitigating state poverty and its devastating impacts on Michigan’s children and families. Here at the Michigan League for Public Policy — where we have been fighting to reduce poverty for well over a century — the choice is clear to us.
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