The Michigan League of Human Services has released a new report showing that while Michigan’s economy is among the worst in the nation, the state is offering little by way of a safety net for those most effected by the economic crisis. According to the report, Michigan’s cash assistance program–the Family Independence Program (welfare) that exists to help families dealing with unemployment or unexpected life circumstances–is aiding only the poorest of the state’s poor.
Michigan Families Facing Tough Times
One doesn’t need to look too hard to realize that the economy in Michigan is awful. Hardly a day goes by without a news story about a factory closing, a change in the unemployment rate, homes being foreclosed, or a story about a job fair inundated with far more applicants than there are positions.
The Michigan League of Human Services puts this in perspective, writing:
“These are difficult times for Michigan. Our state’s unemployment rate has led the nation for much of the past several years, with massive job losses in a number of sectors. Ten percent of all families in Michigan and nearly one out of every five children are in poverty, and many other families are in an economically precarious position. Many families cannot afford rent or health insurance, and there has been a sharp increase in home foreclosures during the past several years.”
The report also says that many middle class families–not just the poorest families in the state–could benefit from an expanded safety net. The League writes that many families are just one layoff or one health crisis away from “financial disaster.”
Only a Portion of those in Need Receiving Assistance
The report shows that Michigan’s cash assistance program–the Family Independence Program–is only helping the poorest residents in the state. While family poverty is growing in the state, Michigan’s program allows only those living at more than 44% below the poverty level to receive assistance. Work requirements have also meant that many families earn “too much” to qualify for assistance, even though they live significantly below the poverty line.
In 2007, approximately 257,488 families were in poverty, but only 82,329 families–or 32% of poor families–received cash assistance. Benefits have also only increased a paltry $33 per month since 1993.
Cuts and “Welfare Reform” have Reduced Assistance
Over the years, the program was weakened both by state-level efforts aimed at reducing welfare roles, as well as the federal “welfare reform” efforts undertaken in the 1990s by Bill Clinton. Following the federal changes, Michigan has received only a fixed block grant that has remained the same each year. At the same time, the legislature has tightened qualifications and made it harder for families that need assistance to receive help.
Beyond cuts to cash assistance programs, there have been cuts and eliminations of other important programs:
- The General Assistance grant, which covered rent for the otherwise homeless population, was eliminated in 1991;
- The Michigan child care subsidy, to help provide child care for working poor parents, has been increased by only 8 cents an hour in 14 years;
- State funding for emergency needs was slashed in 1992, and today covers less than a quarter of families than it did in 1990.
All of these cuts have made it so that many of Michigan’s families are facing incredibly difficult times. As cash assistance has fallen, there are fewer places for families to turn.
The report argues that the current situation is worse than the last time Michigan faced double-digit unemployment. In the early 1980s, Michigan’s cash assistance program covered three times as many workers and was worth more. At that time, the program could cover rent and other essentials, now it’s not even enough to cover rent.
Recent drops in caseloads–from 85,839 cases per month to 72,568 in 2008–are likely due to changes in policy including stricter job requirements and proof of citizenship requirements.
Opportunities for Improvements
The League is urging the state to use money from the economic stimulus package to forestall further cuts and extend help to those who need it.
It also warns against further “ill-advised tax decisions” like the ones that were put into place while the economy was thriving and argues that reducing the deficit by lessening the social safety net is the wrong way to go.