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It Turns Out Poverty Actually Fell in 2020

It Turns Out Poverty Actually Fell in 2020

Poverty in the U.S. fell in 2020, despite one of the very worst labor shocks in the nation’s history. The U.S. Census Bureau attributes the surprising decline to to the federal aid Congress enacted at the beginning of the pandemic to offset impending financial hardships. The data would suggest those efforts were extremely successful.

That data is a little complex. The official poverty rate slightly rose from 10.5 percent in 2019 to 11.4 percent last year. But after accounting for all the cash payments made to Americans, what’s known as the “supplemental poverty measure” fell to 9.1 percent last year — a drop from 11.8 percent in 2019.

Poverty in the U.S. is defined as less than $26,200 annually for a family of four.

Early in 2020, fears were rampant that the U.S. was headed for a second Great Depression as the coronavirus brought a robust economy to a screeching halt. Congress sent stimulus payments of $1,200 to most low-class and middle-income Americans, which moved as many as 11.7 million people out of poverty, according to the Census. Research indicates that the payments prevented 5.5 million Americans from falling into poverty as well.

One slightly worrisome number: the number of insured Americans fell in 2020 — the fourth year in a row that the number of uninsured people in this country grew. The mass layoffs that took place throughout 2020 are likely to blame.

The Biden Administration is using these numbers to defend its $3.5 trillion package, which includes several programs aimed at lifting lower-class Americans out of poverty. It would be the biggest expansion of the social safety net since the 1960s, but Democrats will need a unified front if it has any hope of getting to the White House, and moderates like Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona are far from certain.

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