Stimulus checks saved many from poverty, data shows

Data released Tuesday by the U.S. Census Bureau shows that federal stimulus payments kept more than 11 million people from falling into poverty despite massive job losses amid the COVID-19 pandemic last year.

The Supplemental Poverty Measure, which takes into account government assistance programs not included in the official poverty measure, fell from 11.8 percent in 2019 to 9.1 percent in 2020, despite an 11.5 percent drop in the number of full-time, year-round workers.

The official poverty rate rose from 10.5 percent in 2019 to 11.4 percent in 2020.

Stimulus payments lifted 11.7 million people out of poverty, second only to Social Security, which kept 26.5 million people above the poverty threshold. Without the stimulus checks, the Supplemental Poverty Measure would have risen by about 3.6 percent.

“This really shows the impact of the social safety net,” said Liana Fox, chief of the Census Bureau’s poverty statistics branch.

On a state level, which is calculated using two-year averages, Texas’ poverty rate fell from 13.4 percent in 2017 and 2018 to 12.5 percent in 2019 and 2020, data shows. The 12.9 percent average since 2017 is 13th highest in the nation.

All told, the federal government doled out more than $400 billion in two rounds of stimulus payments meant to alleviate the economic blow of the pandemic, which kept millions of people from working and led to the greatest spike in unemployment since the Great Depression.

That was in addition to expanded unemployment benefits, eviction moratoriums, small business loans and other government aid

programs, some of which are expiring despite the persistent spread of the delta variant.

“At the start of the health and economic crisis, we knew that we needed deep government investments to alleviate widespread hardship,” said Aidan Davis, a senior policy analyst at the Institute on Taxation and Economic Policy, in a statement.

“The last year and a half demonstrates that the nation can make a significant dent in poverty and improve economic livelihood for families across the country,” Davis said.

The stimulus checks had a particularly pronounced effect on Black and Hispanic populations, census data shows, though poverty rates in both groups were still well higher than the national average.

The injection of money caused the poverty rate for Black people to fall from 19.5 percent to an estimated 15.4 percent. In the Hispanic population, poverty rates fell from 17 percent to an estimated 12.9 percent.

The payments, however, could not stave off the pandemic’s impact on people’s wallets entirely, as medical expenses sent an additional 5 million people below the poverty threshold. Additionally, the number of people with private health insurance fell by 0.8 percent between 2018 and 2020, while the number of those on a public plan rose only by 0.4 percent.

The median income also fell from $69,560 to $67,521 in that time, reflecting the historic job losses brought on by the pandemic.