Young Adults

Historically, young people face greater disadvantages during an economic downturn–they have fewer years of experience, less education and have not had time to build up emergency savings. Young workers are already the most likely to be unemployed or under-employed even during good economic times and, despite unemployment hitting 50-year lows in January 2023, young adults continued to face unemployment rates roughly twice the national average.

Recent investments in young adults created a more stable foundation.

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Approximately 195,000 young workers benefited from the American Rescue Plan Act’s temporary expansion of the Earned Income Tax Credit (EITC) to include young workers without children.² Including both the federal and state credits, workers without children in Michigan are estimated to have received an average total credit of $875 in tax year 2021. This is money they could use for car repairs, college classes or savings.

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In 2021, 396,037 students at 112 Michigan colleges and universities received Emergency Aid Grants worth $1,430 on average to support any expense related to the cost of attendance, including food, housing, mental health and child care. These grants were well-targeted, with 80% of Pell Grant recipients receiving direct aid.²

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In March 2020, the Office of Federal Student Aid paused student loan repayments, a move that has benefited approximately 233,100  Michiganders ages 24 and under who carry $3.53 billion in total student debt.4 This COVID-19 emergency relief measure has been both expanded to help more borrowers and extended numerous times throughout the past three years, but is scheduled to end no later than August 2023.

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Evidence Into Action
SMART POLICY CHOICES FOR MICHIGAN’S YOUNG ADULTS

1. Expand the Earned Income Tax Credit (EITC) to workers who are currently excluded.

Michigan’s EITC excludes workers ages 19-24 without children, those over 65 without  children and immigrants who work and pay taxes, but lack a social security number. Altogether, these exclusions harm approximately 250,000 workers with low wages who keep Michigan’s economy  running. Expanding the EITC to cover these groups would help keep more workers out of poverty and put more money into the local economies where these workers live.

2. Ensure all young adults can access higher education and workforce training.

The Michigan Reconnect program pays in-district community college tuition for adults pursuing a certificate  or associate degree, but adults under 25 have traditionally been left out. Permanently lowering the age limit to 21 could help reach some of the 52% of young adults who are not enrolled in and have not completed college.

End Notes

1. Census Bureau. “Voting and Registration in the Election of November 2022,” April 2023. https://www.census.gov/data/tables/time-series/
demo/voting-and-registration/p20-586.html.
2. Aidan Davis. “Federal EITC Enhancements Help More Than One in Three Young Workers.” Institute on Taxation and Economic Policy,
February 2022. https://itep.org/federal-eitc-enhancements-help-more-than-one-in-three-young-workers/.
3. “New Data Show the American Rescue Plan and Other Pandemic Relief Funds Have Helped 18 Million College Students.” The White House
Briefing Room, February 2023. https://www2.ed.gov/about/offices/list/ope/heerf-2021-state-by-state.pdf.
4. Melanie Hanson. “Student Loan Debt by Age.” Education Data Initiative, April 2022. https://educationdata.org/student-loan-debt-by-
age#:~:text=Borrowers%2024%20and%20younger%20owe,higher%20have%20student%20loan%20debt.
5. “2024 Budget Priority: Strengthen Michigan’s EITC.” Michigan League for Public Policy, 2023. https://mlpp.org/strengthen-eitc/.