Monday, February 3, 2020

Scorecard suggests Michigan families need more to thrive

Posted By on Mon, Feb 3, 2020 at 12:21 PM

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Michigan's economy has seen steady growth in recent years, but a new report shows many people are still vulnerable to financial hardship.

The 2020 Scorecard from the group Prosperity Now is a snapshot of financial security among states, and ranks Michigan 26th overall.



Holden Weisman, an associate director of policy for Prosperity Now, says Michigan's income poverty rate of 13.4% is higher than many states, and its liquid-asset poverty rate has been rising for the past seven years.

"Over 42% of households in Michigan can now be considered liquid-asset poor, meaning they don't have enough liquid-asset savings just to get by at the poverty level for three months, in the wake of a financial shock," he relates. "So, that's pretty troubling to us."

Weisman says the research also indicates financial disparities by race are significant, and have negative implications for Michigan residents and the state as a whole.

For example, the home ownership rate of households of people who identify as white is 78%, compared to 41% for Black households and 58% for Latino households.

The scorecard examines policies Michigan could implement to improve economic conditions, including a refundable Earned Income Tax Credit that's at least 15% of the federal credit.

At Wayne Metro Community Action Agency, Louis Piszker, the agency's CEO, says he sees firsthand the struggles of families living paycheck to paycheck.

"There are a tremendous amount of people that are working hard but still not moving up the economic ladder," he stresses. "The EITC is extremely important as an antipoverty measure, because it puts real cash in the pockets of people that truly need it."

The scorecard found high housing costs are a problem for nearly 23% of homeowners and 48% of renters in Michigan.

To ease the burden, Weisman recommends the state prohibit discrimination for anyone using a Housing Choice voucher. He adds legislation (HB 5124) making its way through the statehouse also could help, by providing tax relief for some low-income homeowners.

"It would dramatically make tax debt significantly more affordable and keep more people in their homes, because tax debts are certainly something that factors into that house cost burden," he states. "So, this is another way to make sure that families are able to keep the homes that they've worked hard to build for themselves."

Michigan has adopted only eight of the measures recommended in the scorecard to improve the financial security of its residents.

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