U.S. Poverty Rate Falls To a Record Low

U.S. Poverty Rate Falls To a Record Low as Aid Helps Offset Job Losses.

 

By Ben Casselman and Jeanna Smialek

Published Sept. 14, 2021Updated Sept. 15, 2021, 10:07 a.m. ET

The share of people living in poverty in the United States fell to a record low last year as an enormous government relief effort helped offset the worst economic contraction since the Great Depression.

In the latest and most conclusive evidence that poverty fell because of the aid, the Census Bureau reported on Tuesday that 9.1 percent of Americans were living below the poverty line last year, down from 11.8 percent in 2019. That figure — the lowest since records began in 1967, according to calculations from researchers at Columbia University — is based on a measure that accounts for the impact of government programs. The official measure of poverty, which leaves out some major aid programs, rose to 11.4 percent of the population.

The new data will almost surely feed into a debate in Washington about efforts by President Biden and congressional leaders to enact a more lasting expansion of the safety net that would extend well beyond the pandemic. Democrats’ $3.5 trillion plan, which is still taking shape, could include paid family and medical leave, government-supported child care and a permanent expansion of the Child Tax Credit.

Liberals cited the success of relief programs, which were also highlighted in an Agriculture Department report last week that showed that hunger did not rise in 2020, to argue that such policies ought to be expanded. But conservatives argue that higher federal spending is not needed and would increase the federal debt while discouraging people from working.

The fact that poverty did not rise more during an enormous economic disruption reflects the equally enormous response. Congress expanded unemployment benefits and food aid, doled out hundreds of billions of dollars to small businesses and sent direct checks to most Americans. The Census Bureau estimated that the direct checks alone lifted 11.7 million people out of poverty last year; unemployment benefits and nutrition assistance prevented an additional 10.3 million people from falling into poverty, according to an analysis of the data by The New York Times.

“It all points toward the historic income support that was delivered in response to the pandemic and how successful it was at blunting what could have been a historic rise in poverty,” said Christopher Wimer, a co-director of the Center on Poverty and Social Policy at the Columbia University School of Social Work. “I imagine the momentum from 2020 will continue into 2021.”

Poverty rose much more after the previous recession, peaking at 16.1 percent in 2011, by the measure that takes fuller account of government assistance, and improving only slowly after that. Many economists have argued that the federal government did not do enough back then and pulled back aid too quickly.

Despite the more aggressive response this time, however, median household income last year fell 2.9 percent, adjusted for inflation, to about $68,000. That figure includes unemployment benefits but not stimulus checks or noncash benefits such as food stamps. The decline reflects the pandemic’s toll on jobs: About 13.7 million fewer people worked full time year-round compared with 2019.

Median household income

$70

thousand

60

50

2020:

$67,521

40

Down 2.9%

30

20

10

Adjusted for inflation

0

’70

’80

’90

’00

’10

’20

Source: Census Bureau

By The New York Times

Among those who kept their jobs, however, median earnings rose 6.9 percent.

The share of Americans without health insurance was virtually unchanged, according to the Census Bureau report, a sign that pandemic measures and the Affordable Care Act may have helped people who would have otherwise lost coverage. But it is difficult to assess changes in health coverage last year. Census estimates conflicted with other government counts, and officials acknowledged problems with data collection during the pandemic.

The government defines poverty, under the more comprehensive definition, as an income level below about $30,000 for a family of four, although the exact threshold varies depending on family size, homeownership status and regional housing costs.

Understand the Infrastructure Bill

·        

• One trillion dollar package passed. The Senate passed a sweeping bipartisan infrastructure package on Aug. 10, capping weeks of intense negotiations and debate over the largest federal investment in the nation’s aging public works system in more than a decade.
• The final vote. The final tally in the Senate was 69 in favor to 30 against. The legislation, which still must pass the House, would touch nearly every facet of the American economy and fortify the nation’s response to the warming of the planet.
• Main areas of spending. Overall, the bipartisan plan focuses spending on transportation, utilities and pollution cleanup.
• Transportation. About $110 billion would go to roads, bridges and other transportation projects; $25 billion for airports; and $66 billion for railways, giving Amtrak the most funding it has received since it was founded in 1971.
• Utilities. Senators have also included $65 billion meant to connect hard-to-reach rural communities to high-speed internet and help sign up low-income city dwellers who cannot afford it, and $8 billion for Western water infrastructure.
• Pollution cleanup: Roughly $21 billion would go to cleaning up abandoned wells and mines, and Superfund sites.

The decline in poverty last year was broad-based. It fell among all racial and ethnic groups, among all family types, and among Americans at every age and education level.

Read more. https://www.nytimes.com/2021/09/14/business/economy/census-income-poverty-health-insurance.html?