WASHINGTON — Massive government relief in response to the COVID-19 pandemic lifted millions of Americans out of poverty last year, even as the official poverty rate rose slightly, the Census Bureau reported Tuesday.
The official poverty measure increased by 1 percent in 2020, with 11.4% of Americans, or more than 37 million, living in poverty. This was the first increase in poverty after five consecutive annual declines.
But the Census Bureau’s Supplemental Measure of Poverty, which takes into account government benefit programs and stimulus payments, showed that people’s share of poverty declined significantly once aid was included.
The supplementary poverty measure was 2.6 percentage points below its pre-pandemic level in 2019. Stimulus payments lifted 11.7 million people out of poverty, while expanded unemployment benefits kept 5.5 million from falling into poverty. Social Security remained the most effective anti-poverty program in the country.
“It really highlights the importance of our social safety net,” said Lianna Fox, chief of the Census’ Bureau of Poverty Statistics.
The finding is likely to resonate in a divided Congress, where President Joe Biden’s $3.5 trillion “Build Back Better” domestic agenda faces uncertain prospects. Two of the anchors of last year’s COVID response – increased unemployment benefits and a federal eviction moratorium – have ended, adding to concerns.
The White House immediately took cognizance.
“The key conclusion from this report is the very powerful anti-poverty and middle-class income impact of the government’s response in 2020,” said spokeswoman Emily Simmons. “It’s not enough to lift people out of poverty temporarily, we need to provide opportunities for working Americans and their families to live there.”
The census report, released Tuesday, includes income, poverty and health insurance, and the amount of annual checks on the economic status of average Americans. They are based on extensive survey and analysis.
During last year’s epic economic collapse, employers laid off 22.4 million jobs in March and April, the sharpest decline since records began in the 1940s. Weekly applications for unemployment benefits topped 6 million in a week in April, the highest ever recorded. Since then, the economy has recovered three-quarters of those lost jobs, but the US still has 5.3 million fewer positions than before the pandemic.
A basic indicator of the economic health of the middle class recorded a shock.
The median – or midpoint – household income declined 2.9% in 2020 to $67,521. The median is a dividing line, with half of American households having low incomes and the other half high. It was the first statistically significant drop in that measurement in nearly a decade.
Fueling the erosion, the number of people earning from work fell by about 3 million and the number of full-time workers contracted by about 13.7 million.
Beneath those toplines was the story of the rich and the underprivileged.
Those who held stable jobs throughout the year saw increased economic well-being, with their average income increasing by 6.9% after adjusting for inflation. Those at the bottom of the job market, those with part-time jobs or those trying to stay in the gig economy lost ground as average earnings fell by 1.2% overall for workers.
Despite widespread concerns that the pandemic would leave millions more Americans uninsured, health coverage held its own in 2020, the census found. More than 91% of Americans had insurance, but 28 million were uninsured.
But Larry Levitt of the non-partisan Kaiser Family Foundation said the numbers revealed some obvious exceptions. For example, 38 percent of working poor adults in the dozen states that didn’t expand Medicaid were uninsured. Biden’s budget bill would provide a solution.
“It will be difficult to find a group that struggles more to get access to affordable health care,” Levitt said.
Congress passed five bipartisan COVID-19 response bills last year, which totaled close to $3.5 trillion and were signed into law by then-President Donald Trump. This year Democrats pushed Biden’s nearly $1.9 trillion US rescue plan on party-line votes. Its impact is not reflected in the census report.
Although some federal aid was delayed last year due to problems ranging from problems with distribution, overall it saved families from an economic disaster that would have exacerbated the public health crisis. Some were abandoned, such as people not legally authorized to live in the country.
As Americans battled over measures such as wearing masks and closing businesses and community life, lawmakers on both sides were prompted to take dramatic action, said economist Bruce Meyer, a University of Chicago expert on poverty.
“You had Democrats who were very focused on helping the unemployed and hurt, and you had Republicans who were willing to do a lot of things to help their presidential re-election, hence the encouragement by politicians, Or there was a confluence of desires on both sides,” he said.
On a historical note, census reports documented that government aid was more effective in curbing poverty last year than it was after the Great Recession of 2008-2009 a decade earlier. Even after accounting for government programs, the supplementary measure of poverty rose in 2010, while it fell sharply in 2020. It shows how much more financial juice was provided by Congress and the Trump administration in 2020 compared to President Barack Obama’s nearly $900 billion package. in 2009.
It is relevant to the current debate over Biden’s social infrastructure plan, said Robert Greenstein, a public policy analyst at the Brookings Institution think tank.
“For those who take a cynical view that nothing works effectively, especially on the poverty front, that view will be hard to maintain,” said Greenstein, who focused on budget and policy priorities. Center founded, advocated on behalf of a non-profit organization. of low income people.
Among other provisions, the Biden plan provides tax credits for families with children, which is seen as a strategy to reduce childhood poverty and its long-term consequences. The 2020 Census report showed that childhood poverty would have increased without the impact of government benefits. Instead it declined.