This video is a part of our sequence “The Numbers That Outlined 2022.”
Transcript
One of the necessary numbers of the 12 months that you simply may not have heard of is 7.8 p.c. That’s the share of People who had been residing in poverty in 2021, in response to the newest supplemental poverty charge, which was launched by the U.S. Census Bureau in September of 2022. This metric, versus the official poverty charge, captures how many individuals live in poverty after accounting for the affect of key authorities applications focused at low-income households.
Throughout the pandemic, the federal government spent unprecedented funds to assist lower-income households. So this is likely one of the first clear measurements we’ve of how COVID stimulus influenced poverty in America. And seven.8 p.c is, in truth, the bottom recorded poverty charge on document, 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 in addition the bottom determine we’ve seen.
Quite a lot of the drop in poverty will be ascribed to the federal government’s COVID-19 reduction efforts in 2020 and 2021, together with the expanded little one tax credit score, which helped considerably scale back little one and general 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 tens of millions out of poverty.
However after all, it’s extra sophisticated than that. For a similar causes that each one that authorities help helped scale back poverty, its absence will possible assist carry poverty again. You possibly can’t completely remedy 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 little one tax credit score was phased out on the finish of final 12 months. By early this 12 months, it appeared that little one poverty was rising once more, and plenty of People reported not having 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 concern of a recession — additionally loom massive for lower-income households.
So whereas simply 7.8 p.c of People residing in poverty counts as a coverage victory, anticipate that quantity to be greater subsequent 12 months.
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 US: 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.
