This video is a part of our collection “The Numbers That Outlined 2022.”
Transcript
One of the vital necessary numbers of the 12 months that you simply won’t have heard of is 7.8 %. That’s the share of Individuals who have been dwelling in poverty in 2021, in line with 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 price, captures how many individuals live in poverty after accounting for the impression of key authorities packages focused at low-income households.
Throughout the pandemic, the federal government spent unprecedented funds to assist lower-income households. So this is without doubt one of the first clear measurements we have now of how COVID stimulus influenced poverty in America. And seven.8 % is, in truth, the bottom recorded poverty price on file, for the reason that Bureau began monitoring this metric. Included in that determine is simply 5.2 % of American kids who lived in poverty in 2021, a 46 % drop from 2020 and in addition the bottom determine we’ve seen.
A lot of the drop in poverty might 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 frequently speak about Congress not having the ability to legislate or being caught in gridlock, it appears clear that it loved some of the unquestionable coverage victories in current U.S. historical past: lifting tens of millions out of poverty.
But after all, it’s extra difficult than that. For a similar causes that every one that authorities assist helped cut back poverty, its absence will probably assist carry poverty again. You possibly can’t completely remedy poverty with a short lived 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 12 months. By early this 12 months, 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 % of Individuals dwelling in poverty counts as a coverage victory, count on that quantity to be increased subsequent 12 months.
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 offered in “Poverty in the United States: 2021” report from the US Census Bureau, Appendix B. The information for 2017 and past mirror the implementation of an up to date processing system. The information for 2013 and past mirror the implementation of redesigned earnings questions.