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Poverty Rose In 2022 As Inflation Surged, Pandemic Aid Terminated

Above Photo: Unemployed men queued outside a depression soup kitchen.

Americans faced the largest one-year increase of poverty on record.

As a result of pandemic relief policies expiring under the Biden administration.

In the aftermath of pandemic relief programs such as increased unemployment and nutrition benefits, greater rental assistance and the child tax credit — policies which the Biden administration allowed to expire in 2021 — Americans faced the largest one-year increase of poverty on record.

According to a report from the Census Bureau published on Sept. 12, the sharpest increase in poverty affected children, as child poverty more than doubled from a record low of 5.2 percent to now 12.4 percent. This was indicated by the Supplemental Poverty Measure, which “factors in the impact of government assistance and geographical differences in the cost of living.”

According to an article published by the New York Times on Sept. 12

The increases followed two years of historically large declines in poverty, driven primarily by safety net programs that were created or expanded during the pandemic. Those included a series of direct payments to households in 2020 and 2021, enhanced unemployment and nutrition benefits, increased rental assistance and an expanded child tax credit, which briefly provided a guaranteed income to families with children.

Notably, according to the Census Bureau report, the amount of Americans without health insurance “matched a record low last year of 7.9 percent” because the pandemic program which provided a temporary freeze in Medicaid terminations did not expire. This program covered more Americans than ever with Medicaid.

Inflation also rose by 7.8% between 2021 and 2022, the largest annual increase in cost of living since 1981. This caused the poverty threshold, “which is based on the cost of essential items like food and housing,” to rise dramatically.

The Times reported,

A family of four living in a rental home was considered poor under the supplemental measure if the family’s income was less than $34,518 in 2022, up from $31,453 in 2021.

They continued,

Common Pantry, like many food banks, had demand explode during the pandemic and then recede in 2021, when people received stimulus checks, enhanced unemployment benefits and the child tax credit, among other assistance. Then, as those programs lapsed, demand began to climb again.

Inequality lessened, since the decrease in median incomes mainly came from the middle to top of wage earners. Racial gaps, “as measured by the gap in pretax income between the richest and poorest 10 percent of households,” reduced as well — but how they were reduced isn’t exactly optimistic.

The Times stated that “financial hardship has declined among Black households,” but this isn’t exactly true. Rather than the reallocation of wealth, or the development of wealth in lower earning groups, “white households lost ground to inflation, while inflation-adjusted income was little changed for other racial and ethnic groups.” In other words, racial gaps shrank because white, along with top and middle earners, lost wealth, while other racial groups remained stagnant.

According to the Census Bureau:

Real median household incomes in White and non-Hispanic White households experienced a decrease between 2021 and 2022 (3.5% and 3.6%, respectively). The real median incomes for Black, Asian and Hispanic households were not statistically different from 2021.

Furthermore, while it is true that according to the “official poverty rate,” which doesn’t account for factors such as geographic variation in housing expenses when calculating poverty thresholds, federal and state taxes, work expenses, nor medical expenses, 2022 marks the lowest poverty rate on record at 17.1 percent for Black Americans, polls among Black Americans tell a different story about the “financial hardship” the community faces.

In August 2022, about 55 percent of Black Americans reported in a poll from NPR that they “were experiencing serious financial difficulties.”

In June 2022, Biden’s poll numbers among Black Americans took a serious blow as gas prices and inflation rose.

Also, the Times adds crucial context to this claim:

But those unable to work, or unable to work full-time, faced a one-two punch of higher costs and lost benefits in 2022 — problems that have continued this year. Increased federal nutrition benefits, one of the last vestiges of pandemic aid efforts, expired last spring. Factoring in the loss of benefits, real income fell for the poorest households in 2022, and inequality rose.

Child Poverty

President Joe Biden blamed the doubling of child poverty as a result of the expiration of the child tax credit “entirely on Republican lawmakers, not mentioning that [Democratic Senator Joe Manchin’s] opposition was ultimately decisive in the evenly divided Senate in 2021.”

According to the Times,

Mr. Biden dropped his effort to extend the program at the end of 2021; a renewed push failed again last year. The rise in poverty in 2022, social policy experts said, was the inevitable result of that decision.

The South, according to research, was where the child tax credit had the most significant impact. As a result of this failure to extend the policy, the South experienced the largest rise in poverty.

According to a study from Columbia University, if the child tax credit had “still been in effect in 2022, the child poverty rate would have been 8.1 [percent].” This would have “kept over 5 million children from poverty and cut the 2022 SPM child poverty rate by 47 [percent].”

Arloc Sherman, a vice president at the Center on Budget and Policy Priorities, argues, “The last couple years, through a plunge in poverty and what is now a record single-year increase in poverty in 2022, have shown that poverty is very much a policy choice.”

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