This video is a part of our collection “The Numbers That Outlined 2022.”
Probably the most necessary numbers of the yr that you simply may not have heard of is 7.8 %. That’s the share of Individuals who have been dwelling in poverty in 2021, in keeping with the latest supplemental poverty fee, 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 packages 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 likely one of the first clear measurements we’ve of how COVID stimulus influenced poverty in America. And seven.8 % is, actually, the bottom recorded poverty fee on document, because the 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.
A variety 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 scale back baby and general poverty in America by giving low-income households with youngsters additional money. For all that we regularly discuss Congress not with the ability to legislate or being caught in gridlock, it appears clear that it loved probably the most unquestionable coverage victories in latest 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 support helped scale back poverty, its absence will doubtless assist convey poverty again. You may’t completely resolve 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 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 lots of Individuals reported not with 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 concern 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 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 data is out there in “Poverty in america: 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.