Michigan’s kids suffer hard times as incomes fall, poverty climbs

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Despite claims in the past year that Michigan had bottomed out of the recession, new data released today by the U.S. Census Bureau show there still is much work to be done as incomes continue to fall and poverty rates climb — particularly child poverty rates.

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From 2010 to 2011, the statewide median household income fell by 1.5 % and the percentage of people living in poverty jumped from 16.8% to 17.5%. Several communities have seen significant increases in child poverty rates: From 2008 to 2011, Waterford, Sterling Heights and Shelby Township saw their rates go up by 15, 14 and 14 percentage points, respectively, the largest increases in the tri-county area in that time.

Bill Long, interim director of Michigan’s Children, an advocacy group, said his group has taken notice of the rise in poverty, which can translate into social problems that cause children to drop out of school and essentially tune out.

“When family members lose employment or have a reduced income, even though they are working someplace else, it really puts a stress on the youth, especially in that junior high and high school age,” Long said. “It’s multiple little pieces of impact on a family that make it difficult. In the metro area, in particular Detroit, the priority has got to be getting kids educated because the consequences have a real ripple effect in the future.

“And it’s not just Michigan. … When we talk about Michigan’s economy improving, and it is slightly, we have to ask, ‘Is it picking up for those who have now dropped to the marginal level?’ ”

Michigan’s income fell more than the nation’s as a whole, which declined by 1.3% between 2010 and 2011. The typical Michigan household brought in $45,981 in 2011, about 9% less than it did in 2008, generally regarded as the height of the recession. The drop caused Michigan to fall to 35th from 34th in state income rankings.

The data from the American Community Survey covers communities with populations of 65,000 or more and provides a more detailed look at communities. The data show that income changes varied by area, with higher-income communities such as Farmington Hills and Canton reporting gains since 2010, while others cities, such as Lansing, fell behind.

Some economy experts and those who work for social service agencies say a part of the reason is that though more people — particularly those who were laid off since 2008 — may be finding jobs, they tend to pay much less than their previous work.

Poverty, which the census defines as annual income of $23,021 or less for a family of four, rose in Detroit to 40.9%, with the figure for children younger than 18 at 57.3%.

“The median income in Detroit is half what it is in the nation,” said demographer Kurt Metzger of Data Driven Detroit, a nonprofit research firm. “Half the households in the city make less than $25,000 a year.”

Metzger said Detroiters with higher incomes have been moving out of the city, a trend that accelerated during the recession when housing prices in the suburbs fell and more rental units outside the city came onto the market. Many Detroiters also lack access to reliable public transportation to get to jobs in the suburbs, and many can’t afford cars because of higher insurance and gasoline prices, he said.

“You’ve left behind a very needy population,” Metzger said.

But Detroit isn’t the only place where poverty rose. Nine of the 21 communities in Michigan with populations of 65,000 or more experienced increases in their poverty rates, and eight of those reported increases in child poverty as well, according to the data.

Lansing has been hard hit, too. Median household income there fell 11% last year. It now stands at $31,975, about 22% below what it was in 2008. The percentage of Lansing residents living in poverty also rose, to 29.7%, almost 10 percentage points higher than in 2008. The percentage of Lansing children living in poverty rose to 39%, compared with 24.5% in 2008.

“We’ve definitely noticed the trend,” said Steve Maiville, director of client assistance for the Lansing Council of the Society of St. Vincent de Paul, a nonprofit group that ministers to poor people. The group operates a thrift store in Lansing, and business is up, Maiville said.

“We see a lot of people who I would classify as underemployed people who previously had full-time jobs who are now working one or more jobs to try to make ends meet,” he said. “We see a lot of people who are seeking assistance for the first time.”

The downswing continued despite some rebound in hiring, particularly in the auto industry.

“The hires and the rehires in the autos aren’t at the same income level” as before, said David Littmann, chief economist for the Mackinac Center for Public Policy. “That’s another leg that has been chopped off of Michigan’s traditional economy.”

Littmann said the state’s economy is still strongly tied to consumer confidence, which has been battered by high unemployment, falling home values and gasoline prices approaching $4 per gallon.

“Until you have a full turnaround in the confidence level, Michigan can’t rebound,” he said.

Farmington Hills had the biggest one-year income gain. Median household income there rose from $62,174 to $71,765, a 15.4% jump.

Experts caution against reading too much into a single-year change in the data, but a longer-term trend also shows Farmington Hills doing well. The 2011 income in Farmington Hills is near where it was in 2008, when the recession hit hardest.

Higher education levels in places like Farmington Hills and Rochester Hills tend to make them more economically resilient, Metzger said.

“You have a much higher number of professionals,” he said. “Those particular communities were able to weather it much better than those that tend to be more blue collar.”

Businesses in Farmington Hills are growing stronger, too, said Mary Engelman, executive director of the Greater Farmington Chamber of Commerce, which includes both Farmington and Farmington Hills.

“Our ribbon-cuttings are increasing,” Engelman said. “My membership person gets a new member every few days. There were times where for a whole month, you’d get one member.”

Only Vermont experienced an increase in median household income between 2010 and 2011, while income declined in 18 states. The remaining states and the District of Columbia saw no statistically significant change.

One bright spot in 2011 was a slight decrease in the percentage of Michigan residents without health insurance. The number of uninsured fell from 12.4% in 2010 to 11.8% in 2011.

The overall rate of uninsured residents is still slightly higher in 2011 than it was 2008, when 11% of Michigan residents lacked coverage. In 2011, 34% of Michigan residents got their health insurance from the government, up from 30% in 2008.

Nationwide and in Michigan, the percentage of those ages 19 to 25 with health insurance has been on the rise since 2009, aided by the national health care mandate. Michigan’s young adults are insured at a higher rate (76.3%) than the U.S. (71.8%) in 2011.

Contact Kristi Tanner: 313-222-8877 or ktanner@freepress.com
More Details: How to get help

Utility assistance

Salvation Army: Farmington Hills, 248-477-1153; Pontiac, 248-334-2407; Royal Oak, 248-585-5600; Detroit Harbor Lights, 313-361-6136; Mt. Clemens, 586-469-6712; Warren, 586-754-7400

Job skills/training

Goodwill Industries: North Macomb Employment & Training, 37244 Groesbeck, Clinton Township; 586-493-4654

Focus: HOPE: Resource Center,1355 Oakman Blvd., Detroit; 313-494-5500

Food assistance

Focus: HOPE: Food Centers, 313-494-4600

Cass Community Social Services: 11850 Woodrow Wilson, Detroit; 313-883-2277

Hope Center in Macomb: 33222 Groesbeck, Fraser; 586-294-4673
More Details: How to help

• United Way for Southeastern Michigan, 313-226-9200. Donate at www.liveunitedsem.org or send a check to United Way for Southeastern Michigan, 660 Woodward, Suite 300, Detroit 48226. Text GREATER3 to 80888 to make a $10 donation.

• Salvation Army Eastern Michigan Division, Divisional Headquarters, 248-443-5500. Donate at www.salvationarmy emich .org .

• Capuchin Soup Kitchen. Donate at www.cskdetroit.org or send a check made out to Capuchin Soup Kitchen to 1820 Mt. Elliott, Detroit 48207.

• Variety, the Children’s Charity, 248-258-5511, www.variety -detroit .com .

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