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Michigan Families Need 3 Times Minimum Wage to Thrive
Associated Press
Kathy Barks Hoffman

May 31, 2011
View the Original Article

LANSING, Mich. (AP) — Michigan families are finding it harder to earn enough to support themselves, and new jobs being created over the next seven years aren't expected to help.

A single parent with a preschooler and school-age child would have to earn about $52,000 a year — or three times Michigan's minimum wage — along with benefits to be economically secure, according to the report released Tuesday by Wider Opportunities for Women and the Michigan League for Human Services.

The study defined economic security as being able to cover child care, housing, health care and transportation while establishing a savings and preparing for retirement.

"Sadly, far too few Michigan families are living in economically secure households, with most workers unable to stretch their incomes over basic expenses and build savings," WOW Executive Director Joan Kuriansky said in a release. "The American Dream of working hard to support your family is being rewritten by the growth of low-paying industries, rising expenses and reduced public support."

Michigan's greatest job growth through 2018 is expected to be for those working as retail clerks, home health aides and food service workers, state officials said. Many of those positions pay minimum wage or something close to it. The league says the fact that tax credits for low-income workers were decreased for the budget year that starts Oct. 1 and that 124,000 lower-income children have lost a clothing allowance that helped them buy back-to-school clothes will make it even harder for many families to reach economic security.

The report noted that a single person with no children must earn at least $12.24 an hour — nearly $26,000 — to be economically secure, while two parents both working full time with a preschooler and school-age child must earn more than $25 an hour — about $62,000 jointly — to reach that point. Michigan's minimum wage is $7.40 an hour.

Michigan is still struggling to regain its feet after its "lost decade."

"Instead of recovering from the 2001 recession sooner than the rest of the nation, Michigan's employment rate did not fully recover at all. For the first time, the employment rate dropped in Michigan while it increased for the nation as a whole," state demographer Ken Darga said in an analysis posted Tuesday on a state census listserve. "No other state failed to share in the nation's prosperity during this decade."

He questions why the state suffered through a one-state recession for so long, noting that the auto industry's decline, the state's complex business tax and jobs moving overseas don't explain why the state suddenly saw job gains shrink among new and expanding businesses from mid-2002 until early 2007.

The state began climbing out of recession in 2002, as expected. But his research showed that effort suddenly stalled mid-year, and he doesn't really have an explanation for why new and expanding businesses quit hiring. Darga originally released his analysis for the May 16 revenue estimating conference.

Economist Patrick Anderson of East Lansing said the downturn occurred under both Republican Gov. John Engler and Democratic Gov. Jennifer Granholm, noting he generally dates the start of Michigan's "lost decade" to 2000.

"There's not a clear state policy reason for that in the first half of the decade," he said. "Some of it was just plain bad luck."

Anderson shares Darga's confidence that Michigan's one-state recession finally is over, adding that "there is a lot of reason to be optimistic about Michigan over the next five years."

University of Michigan economist George Fulton recently estimated the state will gain 182,800 jobs over the next three years.

Darga noted that Michigan now has the nation's sixth-highest unemployment rate, rather than the highest. Its number of jobs per thousand residents has increased since April 2010. It's tied with Minnesota for the nation's largest decline in joblessness from 2009 to 2010, and it had the nation's sixth-largest increase in per-capita personal income from 2009 to 2010, its best ranking since 1994.