This video is a part of our collection “The Numbers That Outlined 2022.”
Transcript
Probably the most essential numbers of the yr that you simply may not have heard of is 7.8 %. That’s the share of People who have been residing in poverty in 2021, based on 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 charge, captures how many individuals live in poverty after accounting for the influence of key authorities applications focused at low-income households.
In the course of the pandemic, the federal government spent unprecedented funds to help lower-income households. So this is likely one of the first clear measurements we’ve got of how COVID stimulus influenced poverty in America. And seven.8 % is, in actual fact, the bottom recorded poverty charge on report, 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 likewise the bottom determine we’ve seen.
A number of the drop in poverty may be ascribed to the federal government’s COVID-19 aid efforts in 2020 and 2021, together with the expanded little one tax credit score, which helped considerably cut back little one and general poverty in America by giving low-income households with kids further money. For all that we frequently discuss 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 latest U.S. historical past: lifting hundreds of thousands out of poverty.
However after all, it’s extra sophisticated than that. For a similar causes that each one that authorities support helped cut back poverty, its absence will seemingly assist carry poverty again. You’ll be able to’t completely clear up 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 yr. By early this yr, 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 worry of a recession — additionally loom massive for lower-income households.
So whereas simply 7.8 % of People residing in poverty counts as a coverage victory, anticipate that quantity to be increased 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 info is accessible 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.
