|
Kurt's Corner
The changing face of poverty in Southeastern Michigan
One out of every eight residents of the tri-county area
live in poverty, and the numbers are split almost evenly
between Detroit and surrounding suburbs, according to
the just released 2006 American Community Survey.
There are 62,812 more poor residents living in tri-county
suburbs today than in 1999, according to an analysis
by the UWSEM Research Department. Over that same period
of time, the number of poor residents in the city of Detroit
grew by 22,447. Our economic struggles are truly regionwide.
The U.S. Census Bureau issues poverty thresholds, a statisical
tool generally used to estimate the number of individuals
in poverty nationwide each year. Residents are classified
by type of residence, race, and other social, economic
and demographic characteristics.
Local poverty thresholds for 2006 are shown in Table
1, below. The numbers reveal that an individual under
65 would need to earn $9,670 to exceed by $1 the poverty
threshold, while a single mother with two children would
need $16,243.
Based on these figures, the picture of poverty in Southeastern
Michigan has experienced a significant enlargement coupled
with a change in its composition. Table 2 details the
picture of poverty in 1999, based on 2000 Census results,
compared to that of 2006, as enumerated in the American
Community Survey.
Poverty thresholds are the primary instrument the government
uses to measure poverty, and poverty guidelines are the
second most popular tool.
The Department of Health and Human Services issues poverty
guidelines and uses them both for administrative purposes
and to determine whether individuals or families are financially
eligible for assistance or services provided through certain
federal programs.
The poverty thresholds were originally developed in the
early 1960's by Mollie Orshansky, an economist working
for the Social Security Administration, or SSA. Orshansky
actually developed two sets of poverty thresholds -- one
derived from the U.S. Department of Agriculture's
economy food plan and one taken from the department's
somewhat less stringent low-cost plan. Based on previous
surveys of household expenditures, it was determined that
low-income households spent about one third of their
income on food. As a result, the thresholds were
calculated as three times the food expenditures.
The Economic Opportunity Act of 1964 created the Office
of Economic Opportunity, or OEO, which adopted the lower
of Orshansky's two sets of poverty thresholds in May 1965.
The OEO uses the measure as a working definition of poverty
for statistical, planning and budget purposes.
Certain aspects of the poverty thresholds were revised
in August 1969 based on the recommendations of a federal
interagency committee. That same month, the Bureau of
the Budget designated the just-revised poverty thresholds
as the federal government's official statistical definition
of poverty. Additional minor revisions in the poverty
thresholds were made in 1981, and have remained the same,
with annual revisions based on cost-of-living increases,
ever since.
Table 1. 2006 Poverty Thresholds by Family
Size
[click
here for full size graphic]
Table 2. Poverty Trends in Southeast Michigan,
1999 to 2006
[click
here for full size graphic]
Detroit's poverty totals showed relatively small
numerical growth across categories, with the "under
5 years of age" population even experiencing a slight
decrease. However, the 2006 percentage figures (32.5 percent
for the total population and 44.3 percent for children)
represent a return to the conditions that existed before
the economic boom of the 1990's. In fact,
all economic gains made by Detroiters during the 1990's
were erased by 2006. Household income data from
the same sources, with 1999 income adjusted to 2006 dollars,
show Detroiters' buying power declined more than
20 percent.
The picture in the suburbs has been one of increasing
need. Whether reports come from the Oakland County Department
of Human Services, the Macomb County Community Services
Agency, or agencies such as the Guidance Center in Wayne
County, the picture looks the same - increasing
service requests, with people who have never sought assistance
before showing up at their doors in desperate need.
Almost 63,000 suburban residents have seen their incomes
fall below the poverty threshold over the last seven years,
representing an increase of 31.6 percent. Children
represent almost 18,000 of this increase - up 27
percent over the period.
Self-sufficiency
While the poverty threshold has generally been recognized
as the measure of household economic wellbeing, it is
not differentiated geographically (one measure fits all
states, cities, etc.), and it does not account for the
differences in household spending patterns apparent since
the concept was first developed. For instance, today's
families spend on average about one fifth, rather than
one third, of their income on food. In addition,
we know that many families live above the poverty line,
yet cannot meet their basic needs based on their wages
alone. As a result, increasing numbers of researchers
and economists see thresholds as out of date, and not
truly reflective of the expenses today's families
struggle with on a regular basis.
While I recommend that you read the Michigan League for
Human Services excellent report, "Economic Self-Sufficiency
in Michigan: A Benchmark for Ensuring Family Well-Being,"
published in May 2007, for the details, the bottom line
is that economic self-sufficiency requires an income that
is at least twice that of poverty thresholds.
Using the self-sufficiency definition, the League calculated
the wage levels1 that follow
as necessary for reaching the self-sufficiency level.
- Single individual - $9.08 per hour;
- Single parent family with two children under 6 - $19.35
per hour;
- Two parent family with two children under 6 in which
both parents work - $10.74 per hour each;
- Two parent family with two children under 6 in which
one parent works - $12.58 per hour
Table 3 looks at individuals who do not qualify as "in
poverty," yet would be considered below the minimum
requirement for self-sufficiency. While the number of
Detroit residents in this category has dropped somewhat,
they represent a larger portion of the total due to a
decreasing overall population. About 463,000 Detroit
residents - 56.6 percent of the city's total
population - fall below 200 percent of poverty,
combined stats from tables two and three show.
Table 3. The Population Between 100 and
199 Percent Poverty in Southeast Michigan, 1999 to 2006
[click
here for full size graphic]
The same trend is being seen in suburban communities,
with almost 84,000 additional residents falling into the
100-199 percent category -- a gain of 26.7 percent.
When combined with the previous poverty table, the suburbs
are found to contain nearly 660,000 residents who fall
below self-sufficiency standards. The total for
the region is 1.2 million individuals - more than
one of every four southeast Michigan residents.
A final measure (beyond obvious job losses, foreclosures,
etc.) that truly illustrates the growing need throughout
southeast Michigan is the increasing number of individuals
participating in the state food assistance2
program. Table 4 and Figure 1 illustrate the change
in food assistance roles by county between September 2001
and September 2006.
The analysis found that all areas of the region are seeing
a substantially larger number of households and individuals
on food assistance. Just over 95,000 tri-county
households, representing almost 200,000 individuals, were
added to the food assistance roles since 2001. Many
of these individuals represent the "working poor."
These are the individuals who may be working full-time,
but are receiving minimum wage (or slightly more) and
are not able to reach self-sufficiency. Food assistance
helps. Unfortunately, the subsidies are often not enough
and the recipients still must deal with the rising costs
of housing, utilities, childcare, medical bills and much
more.
While Wayne County added the largest number of individuals
to its rolls over the period, Macomb County experienced
the largest percentage increase - 148 percent.
Poverty and need know no boundaries - they are
definitely regional issues. United Way has recognized
Financial Stability as one of the core impact areas in
the organization's Agenda
for Change. Ultimately, we want to see that more individuals
and families can build assets to achieve their educational
and financial goals. In order to achieve this outcome
we have identified three priority outcomes:
- Increase Financial Resources
- Increase Financial Literacy
- Increase and Sustain Home Ownership
We obviously have a lot of work ahead of us and we hope
that residents across southeast Michigan, from all walks
of life, join us in this vital effort.
Table 4. Food Assistance Roles in Southeast
Michigan, 2001 to 2006
[click
here for full size graphic]
Figure 1. Persons Receiving Food Assistance
by County, Sept. 2001 and Sept. 2006
[click
here for full size graphic]
1. All self-sufficiency wage
levels assume the worker works 40 hours per week, 52 weeks
per year.
2. The Food Assistance
Program supplements the food purchasing power of low-income
individuals and families. The U.S. Department of Agriculture
funds 100% of this program. The state and federal
governments share administrative costs. The Department
of Human Services (DHS) determines eligibility for
food assistance. Generally, eligibility for
food assistance depends on the financial situation
of all members of the household group. All persons
who live together and purchase and prepare food together
are considered to be members of the same food assistance
group. Based on income guidelines, the threshold
for our family of three (single mother with 2 children)
would be approximately $34,300 per year (very close
to our 3 person family self-sufficiency income).
|
Local
professionals swapped best practices at recent United
Way for Southeastern Michigan Women's Initiative events
at the Detroit Athletic Club. 
For
the third consecutive year, a massive regional effort
is underway to match job seekers in metro Detroit with
available jobs in hot or emerging industries, and the
guidance and resources they need to thrive once hired.
The
2007 fundraising campaign is in full gear and this year's
focus is on attracting both contributors and contributions.
For the first time in 10 years, United Way is opening up the funding process and encouraging area agencies to consider ways to better partner with the organization to make a stronger long-term impact on lives across the tri-county area.