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Eye-opening Data Reveals Percentage of Struggling FamiliesPrint

strong cities and towns | June 16, 2017 | By Hans Voss

Eye-opening Data Reveals Percentage of Struggling Families

Two out of every five people you see walking down the street in any town in northwest Michigan are not making enough money to meet their basic needs. They are worried about a car breaking down and not being able to get to work, missing a rent payment, or how they are going to afford daycare for their kids while they are at a job that pays $10 or $15 an hour.

Six years ago, the Michigan Land Use Institute, a Traverse City-based nonprofit which was re-named last year as the Groundwork Center for Resilient Communities, published a report called “Families on the Edge.” It told the story of these working people on tight incomes who struggle to pay the cost of housing, transportation, food, childcare, and utility bills. The report also pointed out some specific actions we can take as a community to help solve the problem.

That was 2011, in the midst of the economic crash, and the region’s unemployment rate was over 16 percent. While the economy has improved since then (Grand Traverse County’s unemployment rate is down to 4.4 percent) the story of the working poor in our region is as urgent as ever.

Newly-released data from the United Way shows that nearly 40 percent of the region struggles to meet a basic standard of living. Using the acronym ALICE (Asset Limited, Income Constrained, Employed), United Way defines the working poor as living at or below a “household survival budget” of $19,872 for a single adult and $58,740 for a family of four. As a comparison, ALICE is a higher threshold than the federal poverty line of $11,770 for a single adult and $24,250 for a family of four.

Just how many people in our region fall into those two categories is a real eye opener. In Kalkaska County, for example, 16 percent of the population is below the poverty line and another 27 percent are above the poverty line but below the ALICE threshold. Adding those up, 43 percent of the county’s population is struggling to make ends meet.

You might think that Traverse City would avoid this trend with its thriving downtown and long list of “best place to…” accolades. Think again. A full 44 percent of TC residents fall below the ALICE threshold.

So, as the summer season kicks off and our bars and restaurants fill with customers, take a minute to consider the story of your server. If she happens to be a single mom, the data is staggering. There’s a 47 percent chance she is living below the poverty line and an 81 percent chance she is below the ALICE threshold. And while everyone’s story is different, there’s a good chance she’s living out of town in a house she can barely afford, challenged by the high cost of propane heating. She’s probably living month to month without any meaningful savings for unexpected expenses, like fixing a car, replacing a broken washing machine, or doctors’ bills – let alone saving for college tuition or taking her daughter on a vacation.

It’s a sobering picture indeed – one that calls into question just what kind of community we are building here that tolerates these high numbers of working people living in the margins. While we are a long way from tackling this issue head on in a coordinated way – and the first step is simply coming to grips with the problem – there are certainly signs that our regional community is making progress.

New in-town rental housing is being built in or near Traverse City, including a 60 unit development on Garfield Avenue on the TART trail with one and two bedroom rentals priced with low and middle-income workers in mind. More workforce housing projects are on the way – which is good because a recent report from Networks Northwest forecasted that Grand Traverse County needs 994 rental units and 221 new owned units to meet the demand forecasted to 2019.

Last month, local residents passed a millage to provide core funding for the Bay Area Transit Authority to expand its service to the region. BATA has changed its routes to meet the needs of commuters so the bus is a reliable and affordable way to get to and from work. A better bus system is important because families in northwest Michigan spend a considerable portion of their income on car costs – on average $11,000 per year on car payments, gas, maintenance, insurance. With 70 percent of families in our region owning two cars, selling one and taking the bus to work can save real dollars.

Of course, diversifying the economy beyond the tourism industry is an important part of the solution, too. It’s encouraging to see major downtown employers like Hagerty growing and hiring more positions. And there are promising signs of Traverse City emerging as a center for technology industry. This month a new tech incubator space will open downtown to house start-up companies and provide support to grow the local tech industry which will bring higher paying jobs. Northwestern Michigan College is playing an important role helping local people get the training they need to seize these jobs as they become available.

In that original Families on the Edge report, we wrote that we wanted to “inspire the vulnerable and the comfortable to talk about what they can do together to improve everyone’s prospects.” Despite the progress we’ve made, the disturbing data from the United Way’s ALICE report shows we need that conversation more than ever.

This column was originally published in the June 2017 edition of the Traverse City Business News.