In 2025, a family of four with annual earnings below $32,150 is considered poor by the federal standard, but even families with incomes above the poverty threshold can struggle to make ends meet. In Michigan, 27% of families have earnings above the Federal Poverty Level, but cannot afford the cost of living. This group of households is known as “ALICE” – Asset Limited, Income Constrained, Employed.¹ The high cost of child care is one of the biggest expenses for ALICE families, costing nearly as much as food and transportation for a family of four and deepening financial instability.

Job Opportunities

Family economic security depends on the availability of good jobs in the state, yet 1 in 4 children lives in a family where no parent has regular, full-time employment. Part-time, temporary or low-wage jobs can leave families and children economically vulnerable. Systemic racism and workplace discrimination contribute to worse outcomes for Black, Hispanic and multiracial children, who are more likely to live in a family where no parent has stable employment.

Job recovery from the pandemic in Michigan has lagged behind the U.S., deepening inequities in the job market. Michigan’s employment grew just 1% from 2019 to 2024 compared to a growth rate of 4.7% nationally. This is a concern for children in families with low and moderate incomes because wages and salaries are typically the primary source of income for these households. Job growth is also a key driver of economic growth and tax revenue for the state, without which we cannot invest in essential programs and services for children and families.

Although manufacturing and the car industry once brought strong growth and good jobs to the state, today the vast majority of private sector workers – nearly 80% – are employed in the services sector. As recently as 1990, the manufacturing sector employed 25% of workers in the state, but that share has been falling in recent years as employment in services has grown.²

In 2024, fewer than 15% of Michigan’s workforce was employed in manufacturing. Meanwhile, industries like construction as well as health care and social assistance have seen higher-than-average growth in the state.

A thriving economy means work opportunities for everyone, but women’s labor force participation rates have long lagged those of men. The disparities are greatest for Black women, for whom total labor force participation remains at pre-pandemic levels. The lack of paid family and medical leave in Michigan makes it difficult for workers with caregiving responsibilities, who are often women, to remain in the workforce. Just over 1 in 4 private sector workers has access to paid family leave, although for workers with the lowest incomes, the share is much lower.

Fair wages

For women who participate in the workforce, their wages trail those of their male counterparts. The gap is greatest for women of color, who face discrimination in the workplace due to both their race and gender. In addition, working moms earn just 62 cents for every dollar earned by dads.³

Despite improvements in recent years, research shows women still spend more time doing unpaid care work for children and older adults, often at the cost of paid employment.⁴ As a result, women are more likely than their male counterparts to take up part-time work or leave the workforce altogether. The unpaid care burden on women further exacerbates the gender wage gap and contributes to overall lower lifetime earnings for women. The wage gap is especially harmful for the 1 in 4 children being raised by a single mother. Over 40% of children in households headed by a single mom are living in poverty, compared to just 8% of children in two-parent households and 20% of children in households headed by a single dad.

A strong care infrastructure

Caregivers without access to affordable, accessible and high-quality child care struggle to enter and remain in the labor force, a challenge that disproportionately impacts mothers. Early care and education is key to family economic security, but remains out of reach for families due to both the high cost of care and the lack of availability.

At an average of $10,023 annually for infant care, child care is one of the biggest expenses families face. The U.S. Department of Health and Human Services considers child care affordable if it costs less than 7% of a family’s income, but by this standard just 1 in 4 families can afford infant care.⁵

The fragility of our state’s child care sector was put on display during the pandemic, when the statewide lockdown led many providers to limit capacity or shut their doors altogether. Child care centers weathered the disruptions better than family and group homes, with the number of centers showing a net increase since the pandemic, but the number of home-based providers has not recovered.

From 2019 to 2024, the state saw a net decline of 781 home-based providers, eliminating 3,515 licensed slots in home-based facilities. During the same period, the state saw a net increase of 76 child care centers, creating 26,520 additional slots. Federal relief funding from the American Rescue Plan Act through the Caring for MI Future Facilities Improvement Fund have helped to maintain and increase licensed capacity, but the ratio of children to licensed slots has only improved slightly.⁶ The gains and losses in slots have not been felt equally across the state.

Affordable housing

One in 4 children in Michigan, including over half of children in low-income households, lives in a household that spends more than 30% of monthly income on rent, mortgage payments, taxes, insurance and other related housing costs. Housing is typically one of the largest expenses families face, a trend that is deepening as housing costs have grown faster than the rate of inflation over the past decade.

Renting

Relatively few families receive federal rental assistance through programs like Housing Choice Vouchers, Section 8 Project-Based Rental Assistance or Public Housing. Programs like Housing Choice Vouchers that allow children to access neighborhoods with lower poverty rates and better schools have been found to improve children’s mental health outcomes and educational attainment. Children who move to low-poverty neighborhoods at a young age see higher college attendance rates and earnings into adulthood.⁷ However, the demand for housing assistance exceeds the supply and families may wait years due to lack of investment in these programs.

Home ownership

Home ownership among families with children has recovered from the Great Recession, but poverty keeps home ownership out of reach for many. Home ownership provides greater security against rising inflation as monthly mortgage payments tend to remain steady year over year while renters can face sharp increases upon rent renewals. Since 2010, home owners have seen their monthly housing costs rise by just 17% while renters have experienced a 51% increase.

Home ownership is an important wealth-building tool for families with low incomes, but the rising cost of housing alongside discrimination in housing finance keeps many families of color from achieving home ownership. Researchers have shown home mortgage applicants of color are more likely to have their application denied than a white applicant with the same income and credit score.⁸

Homelessness

Homelessness is on the rise nationally and in Michigan. In the 2022-2023 school year, over 32,000 students (2.3% of all students in grades pre-K through 12) were identified as experiencing homelessness.⁹ Students experiencing homelessness are twice as likely to be chronically absent from school and substantially less likely to graduate high school.

Rates are even higher for young children, with 2.6% of infants and toddlers experiencing homelessness.¹⁰ With homelessness reaching an all-time high nationally and children seeing the largest increase in homelessness – 33% year over year – of any age group, the need to increase the supply of affordable housing is especially urgent.¹¹