Poverty rose in 2020 amid pandemic even as stimulus payments helped some 11.7 million Americans avoid it

CNN

By Tami Luhby, CNN

The nation’s poverty rate rose to 11.4% last year, but the first two rounds of federal stimulus payments helped keep 11.7 million Americans out of poverty, according to Census Bureau data released Tuesday.

The payments, a key part of the unprecedented federal response to the economic havoc wreaked by the coronavirus pandemic, prompted a decrease in an alternative poverty measure to 9.1% in 2020, the Census Bureau said.

Last year was the first time the Supplemental Poverty Measure, which began in 2009, was lower than the official rate. This measure takes into account certain non-cash government assistance, taxes and needed expenses.

Without the stimulus payments, the alternative measure would have risen by about 3.6 percentage points, Census said. In 2019, the supplemental rate was 11.8%.

The official poverty rate rose in 2020 from a historic low of 10.5% a year earlier. It was the first increase in poverty after five years of decline. Some 37.2 million people were in poverty in 2020, an increase of 3.3 million from the year before.

Economic chaos

The pandemic upended the US economy early last year, costing millions of Americans their jobs as states forced non-essential businesses to close and people to stay home in an effort to stop the virus’ spread. Though conditions have improved markedly since then, the economy remains more than 5 million jobs short of where it was in February 2020.

However, an unprecedented response from the federal government spared millions of people from the worst ravages of the economic downturn. Congress passed three major relief packages, sending $3,200 in stimulus payments in 2020 and 2021, expanding the unemployment benefits system, beefing up food stamps and providing funds for low-income school children to buy food, deferring student loan payments, imposing a moratorium on evictions, sending relief funds to state and local governments and providing assistance to businesses.

The massive expansion of unemployment benefits lifted 5.5 million people out of poverty. Lawmakers expanded both the number of people eligible for jobless payments and the generosity of the benefits last year.

RELATED: More children faced food insecurity last year during pandemic

Median income declined

Median household income fell to $67,500 last year, down 2.9% from 2019, which was the highest since 1967, the first year records were kept, according to the Census Bureau. It was the first statistically significant decline in median income since 2011.

The number of those who work full-time, year-round decreased by approximately 13.7 million people, the largest year-to-year decrease since the agency began collecting comparable data in 1967.

Food insecurity

The federal efforts to support struggling individuals succeeded in keeping hunger at bay last year for Americans overall, a recent US Department of Agriculture report found.

Overall, the share of households contending with food insecurity remained the same in 2020 as the year before at 10.5%, or 13.8 million households, according to the report, which is released annually.

However, food insecurity among families with children rose last year, despite the federal response. Some 14.8%, or 5.6 million households, were in this situation last year, up from 13.6% in 2019.

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