This video is a part of our sequence “The Numbers That Outlined 2022.”
Transcript
One of the crucial necessary numbers of the yr that you just won’t have heard of is 7.8 p.c. That’s the share of Individuals who have been dwelling in poverty in 2021, in response to the most recent supplemental poverty rate, which was launched by the U.S. Census Bureau in September of 2022. This metric, versus the official poverty fee, captures how many individuals live in poverty after accounting for the impression of key authorities applications focused at low-income households.
In the course of the pandemic, the federal government spent unprecedented funds to assist lower-income households. So this is among the first clear measurements we’ve got of how COVID stimulus influenced poverty in America. And seven.8 p.c is, in reality, the bottom recorded poverty fee on file, because the Bureau began monitoring this metric. Included in that determine is simply 5.2 p.c of American kids who lived in poverty in 2021, a 46 p.c drop from 2020 and likewise the bottom determine we’ve seen.
A variety of the drop in poverty will be ascribed to the federal government’s COVID-19 aid efforts in 2020 and 2021, together with the expanded baby tax credit score, which helped considerably cut back baby and total poverty in America by giving low-income households with kids further money. For all that we regularly discuss Congress not having the ability to legislate or being caught in gridlock, it appears clear that it loved probably the most unquestionable coverage victories in current U.S. historical past: lifting thousands and thousands out of poverty.
However after all, it’s extra difficult than that. For a similar causes that each one that authorities help helped cut back poverty, its absence will possible assist carry poverty again. You possibly can’t completely resolve poverty with a brief inflow of money.
The final federal COVID stimulus checks went out all the best way again in March of 2021, and the expanded baby tax credit score was phased out on the finish of final yr. By early this yr, it appeared that baby poverty was rising once more, and plenty of Individuals reported not having the ability to pay for primary wants. Inflation is part of that — and a few would argue, spurred on by the additional stimulus. And now, rising rates of interest — and the worry of a recession — additionally loom giant for lower-income households.
So whereas simply 7.8 p.c of Individuals dwelling in poverty counts as a coverage victory, anticipate that quantity to be greater subsequent yr.
Extra details about the SPM chart: The Supplemental Poverty Measure (SPM) estimates for 2019 and past mirror the implementation of revised SPM methodology; extra info is out there in “Poverty in the United States: 2021” report from the US Census Bureau, Appendix B. The info for 2017 and past mirror the implementation of an up to date processing system. The info for 2013 and past mirror the implementation of redesigned revenue questions.