Census: Relief programs helped stave off hardship
Government offset worst economic slide since 1930s
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 government aid, the Census Bureau reported Tuesday that 9.1% of Americans were poor last year, down from 11.8% 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 government’s official measure of poverty, which leaves out some major aid programs, rose to 11.4%.
The new data will almost surely feed into a debate in Washington about efforts by President Joe Biden and congressional leaders to enact a more lasting expansion of the safety net. 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 last year, 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 continued and 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 government response. Congress expanded unemployment benefits and food aid, doled out hundreds of billions of dollars to small businesses and sent direct checks to most American families.
The Census Bureau estimated that the direct checks alone lifted 11.7 million out of poverty last year, and that unemployment benefits prevented 5.5 million people from falling into poverty.
Poverty rose much more drastically after the last recession, peaking at 16.1% in 2011, by the measure that takes fuller account of government assistance and improving only slowly after that.
“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.”
Despite that progress, median household income last year fell 2.9%, adjusted for inflation, to about $68,000, a figure that includes unemployment benefits but not stimulus checks or noncash benefits such as food stamps.
The decline reflects the huge job losses caused by the pandemic: Some 3 million fewer worked at all in 2020 than in 2019, and 13.7 million fewer people worked fulltime year-round. Among those who kept their jobs, however, 2020 was a good year financially: Median earnings for full-time yearround workers rose 6.9%, adjusted for inflation.
The government defines poverty as an income below about $13,000 for an individual, or about $26,000 for a family of four.
Many of the programs that helped people avert poverty last year have expired, even as the pandemic continues.
A White House economist, Jared Bernstein, said Tuesday that the new poverty data should encourage lawmakers to enact the $3.5 trillion Democratic measure that includes much of Biden’s agenda for the economy, which the administration argues will create more and better-paying jobs.
“It’s one thing to temporarily lift people out of poverty — hugely important — but you can’t stop there,” said Bernstein, a member of Biden’s Council of Economic Advisers. “We have to make sure that people don’t fall back into poverty after these temporary measures abate.”
Most Republican lawmakers, who were in control of the Senate and the White House last year, did not issue statements promoting the poverty numbers. That may be a reflection of the party’s unified opposition to the Democratic push for more spending on social programs, which the Senate minority leader, Mitch McConnell, described Monday as a “reckless taxing and spending spree.”
Conservative policy experts said that although some expansion of government aid was appropriate during the pandemic, those programs should be wound down, not expanded, as the economy healed.