COVID Relief Brought Down U.S. Poverty Level Over the Last Year

The number of Americans living in poverty declined overall during the Covid pandemic due to the massive stimulus relief measures Congress enacted at the beginning of the crisis, the Census Bureau reported Tuesday.

The official poverty rate rose slightly in 2020 to 11.4 percent, up from a record low of 10.5 percent in 2019, the U.S. Census reported, but that figure mostly reflects cash payments to Americans. After accounting for all the government aid payments, the Census’ supplemental poverty measure showed a decline from 11.8 percent in 2019 to 9.1 percent in 2020.

The stimulus payments provided $1,200 cash payments to most low- and middle-income Americans last year, moving 11.7 million people out of poverty, the U.S. Census said. Another 5.5 million people were prevented from falling into poverty by the enhanced unemployment insurance aid. The poverty threshold is defined as an income of less than $26,200 a year for a family of four.

For the record, poverty dropped last year despite the pandemic — because of government aid. Lesson: Poverty is a policy choice.

— Robert Reich (@RBReich) September 14, 2021

The median household income decreased 2.9 percent to about $67,500 from 2019 to 2020. But during the same period, real median earnings of full-time, year-round workers increased 6.9 percent. The Census says the earnings grew because the decline in full-time, year-round workers was concentrated among those with lower earnings and low-wage industries. That decrease was highest in food service occupations, such as bartenders, servers, and cooks.

Absolutely incredible: Census says poverty rate **fell** in 2020 ***during one of the worst labor market shocks in US history***, due to the combo of stimulus checks/federal relief that reached millions both in and outside the workforce. Reflects limits of jobs to reduce poverty. https://t.co/rgOKZo50qi

— Jeff Stein (@JStein_WaPo) September 14, 2021

Congress is working to enact more programs to assist Americans still reeling from the pandemic. The Senate returned on Monday after a monthlong recess to a packed schedule that includes work to keep the government open and raise the debt ceiling as well as pass a $3.5 trillion social to expand the social safety net and raise taxes on upper earners. Lawmakers also plan to give final passage to a $550 billion infrastructure bill.

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Incredible chart from the US Census:

The "stimulus checks" in 2020 lifted 11.7 million people out of poverty.

Enhanced unemployment aid lifted 5.5 million people out of poverty.https://t.co/VlTI9Mh2qP pic.twitter.com/WFYtv09T5o

— Heather Long (@byHeatherLong) September 14, 2021

Separately, the Census reported that in 2020 the poverty rate increased for the non-Hispanic white and Hispanic populations, to 8.2 percent and 17 percent, respectively. The Black population had the highest poverty rate of 19.5 percent, but did not experience a significant change from 2019.