September 17, 2021
Poverty fell overall in 2020 as result of massive stimulus checks
U.S. poverty fell overall in 2020, a surprising decline largely due to the swift and substantial federal relief that Congress enacted at the start of the pandemic to try to prevent widespread financial hardship as the nation experienced the worst economic crisis since the Great Depression.

The U.S. Census Bureau reported poverty fell to 9.1 percent in 2020 after accounting for all the government aid, the lowest rate on record and a significant decline from 11.8 percent in 2019.

Nearly 8.5 million people were lifted out of poverty last year, an unprecedented change in a single year that was largely attributed to the stimulus payments. Poverty in the United States is defined as a family of four living on less than about $26,250 a year.

“This is a really phenomenal result‚” said Elaine Waxman, a senior fellow at the Urban Institute. “But a lot of the aid that made a difference, including for families with children, won’t be extended.”

As the economy recovers from the depths of the coronavirus pandemic, White House officials are hoping that more Americans will be able to find good-paying jobs that keep them out of poverty. But deep inequalities remain, and there are troubling signs the recovery could stall. Black and Hispanic women continue to lag behind in the recovery, along with Americans without college degrees. Meanwhile, strong job gains earlier in the summer have faded as surging coronavirus cases, mostly among the unvaccinated, weigh on spending and hiring.

President Biden is urging Congress to enact more programs to help the poor and working class as part of a $3.5 trillion package that would make significant investments in many parts of the economy. Top White House aides point to the success of the pandemic aid as an example of how additional resources can make a dramatic difference in decreasing poverty and hardship. But conservatives argue that safety-net programs exacerbate worker shortages and add to already skyrocketing levels of federal debt unnecessarily.

The extensive federal relief money enacted during the coronavirus pandemic is widely credited by economists and policy experts with preventing another Great Depression. When looking at individual programs, the stimulus payments, alone, without taking into consideration expenses and other factors, would have lifted 11.7 million out of poverty, census officials estimate. And they said enhanced unemployed aid prevented 5.5 million people from falling into poverty. A separate report last week showed that, because of the aid, hunger did not rise in 2020.

“This really highlights the importance of our social safety net,” said Liana Fox, chief of the Census Bureau’s Poverty Statistics Branch.

The annual census findings also underscored the deep impact of so many job losses last year. Median income declined sharply, 2.9 percent, to $67,521, and the number of people lacking health insurance throughout 2020 grew to 28 million, nearly 2 million more than in 2019. It was the fourth year in a row that the ranks of the uninsured swelled.

Still, after accounting for the government aid, poverty declined in every age group, racial and ethnic group and educational level. Some of the largest declines in poverty were reported for families headed by single mothers, African Americans, Hispanic Americans and adults without a high school degree. (Source: The Washington Post)
Story Date: September 15, 2021
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