The solutions, however, are often politically difficult and expensive.
The Michigan Association of United Ways recommends raising the child-care subsidy cap as one way to offer relief. In 2016, Michigan had the lowest income-eligibility level in the nation. In 2018, Gov. Rick Snyder increased the eligibility from 125 percent of the poverty line to 130 percent of the poverty line but the number remains too low, according to the United Way.
Legislators’ inaction on moving the subsidy cap up as costs increases led to fewer families receiving child care assistance. In January of 2007, Michigan provided child care subsidies to 57,268 families, according to data from the Michigan League for Public Policy. But that dropped to only 17,047 families by January 2016, despite increases in the state’s working poor.
The organization is also calling for Michigan to strengthen the Earned Income Tax Credit, which is a refundable tax credit for low- to moderate-income working individuals and families. Michigan caps its earned-income tax credit to 6 percent of the federal credit, where other states have raised it higher, such as 30 percent in Massachusetts and New York. United Way believes the credit should be 20 percent of the federal credit.