ANN ARBOR — Nearly 40 percent of Michigan households struggle to afford basic necessities, according to a new analysis by Poverty Solutions at the University of Michigan, highlighting the widening gap between traditional economic measures and the everyday realities families face in paying for housing, food and health care.

The figure has remained virtually unchanged from last year. About 13 percent of Michigan residents live below the federal poverty line, while more than 26 percent of households earn above that threshold but still cannot afford the cost of basic necessities in their communities.

Amanda Nothaft, director of data and analysis at Poverty Solutions, said the federal poverty line does not present a complete picture of economic hardship.

“The poverty line for a family of four is $33,000,” Nothaft said. “The ALICE threshold is $67,000, and so these are people who are struggling to make ends meet, but they’re not considered poor. They don’t qualify for programs, and these are people who are often forgotten when we talk about social safety nets.”

These are people who are struggling to make ends meet, but they’re not considered poor.

ALICE stands for Asset Limited, Income Constrained, Employed. The measure identifies working households whose incomes exceed the federal poverty threshold but remain insufficient to cover basic living expenses based on local costs.

Unlike the federal poverty line, the ALICE “survival budget” accounts for regional differences in expenses such as housing, child care, transportation and health care.

Nothaft said government safety net programs, including the Supplemental Nutrition Assistance Program, commonly known as SNAP, and Medicaid, are largely designed to assist individuals and families living near or below the federal poverty level. Consequently, many working households experiencing financial hardship may earn too much to qualify for assistance.

The updated Michigan Poverty and Well-Being Map shows that more than 1 million households with incomes above the poverty line remain unable to afford basic necessities and may lack the savings needed to handle an emergency home or vehicle repair or an unexpected medical bill.

Other statewide findings show that nearly 18 percent of Michigan children live in poverty, almost one-third of households spend more than 30 percent of their income on housing and about 7 percent of adults lack health insurance.

The analysis also found that one in three children in Wayne County lives below the federal poverty line. More than half of the county’s households fall below the ALICE threshold, compared with approximately 32 percent in Oakland County and 38.6 percent in Macomb County.

Wayne County has the state’s second-highest child poverty rate, behind Lake County. Its rate has surpassed those of Clare and Roscommon Counties, which have historically recorded some of Michigan’s highest levels of child poverty.

Wayne and Lake Counties face some of the state’s most severe economic challenges. Both have experienced 3 percentage point increases in their poverty rates since 2021.

Lake County, located in western Michigan, has the state’s highest child poverty rate at 36 percent — twice the statewide rate — even though West Michigan has the highest median household income among the state’s economic regions.

“Rural child poverty remains an issue across the state,” Nothaft said. “We see pockets of concentrated poverty, even in regions with relative economic prosperity.”

We see pockets of concentrated poverty, even in regions with relative economic prosperity.

She added that directing additional resources toward communities with the greatest needs would improve residents’ quality of life while strengthening Michigan’s overall economic well-being.

The analysis found that economic challenges vary considerably by region. In the Upper Peninsula, the poverty rate is 0.53 percentage points higher than the statewide average, while unemployment is also significantly higher.

In eastern Michigan, particularly the Thumb region, 18 percent of residents live below the poverty line and rates of higher educational attainment remain well below the statewide average.

Nothaft said programs such as free school meals for children across Michigan can provide meaningful assistance. However, she emphasized that more must be done to expand affordable housing and health care and create well-paying jobs before the state sees substantial improvements in residents’ quality of life.