This video is a part of our sequence “The Numbers That Outlined 2022.”
Probably the most essential numbers of the yr that you simply won’t have heard of is 7.8 %. That’s the share of People who had been residing in poverty in 2021, in keeping 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 affect of key authorities applications focused at low-income households.
Through 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 now have of how COVID stimulus influenced poverty in America. And seven.8 % is, in reality, the bottom recorded poverty price on report, for the reason that Bureau began monitoring this metric. Included in that determine is simply 5.2 % of American youngsters who lived in poverty in 2021, a 46 % drop from 2020 and likewise the bottom determine we’ve seen.
Plenty 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 youngster tax credit score, which helped considerably cut back youngster and total poverty in America by giving low-income households with youngsters further money. For all that we frequently discuss Congress not with the ability to legislate or being caught in gridlock, it appears clear that it loved one of the unquestionable coverage victories in current U.S. historical past: lifting thousands and thousands out of poverty.
However after all, it’s extra sophisticated than that. For a similar causes that each one that authorities help helped cut back poverty, its absence will probably assist carry poverty again. You’ll be able to’t completely remedy poverty with a brief inflow of money.
The final federal COVID stimulus checks went out all the way in which again in March of 2021, and the expanded youngster tax credit score was phased out on the finish of final yr. By early this yr, it appeared that youngster poverty was rising once more, and plenty of People reported not with the ability to pay for fundamental 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 People residing in poverty counts as a coverage victory, count on that quantity to be greater subsequent yr.
Further details about the SPM chart: The Supplemental Poverty Measure (SPM) estimates for 2019 and past mirror the implementation of revised SPM methodology; extra data is on the market 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 revenue questions.