The arrival of the coronavirus pandemic in 2020 created terrible dislocations in the economy. However, the large amount of aid distributed by the government meant that the poverty rate in the country actually fell last year.
According to CNBC, the Census Bureau’s report, called the Supplemental Poverty Measure (SPM) 2020, found that the poverty rate in 2020 was 9.1 percent, compared to 11.8 percent in 2019. It also represents the lowest rate since 2009, when the Supplemental Poverty Measure was first tracked.
The “official” poverty rate, however, increased to 11.4 percent in 2020, compared to 10.5 percent in 2019. The SPM was higher than the regular poverty rate in New York, New Hampshire, Massachusetts, New Jersey, Delaware, Maryland, Virginia, Washington, D.C., Florida, Colorado, and California, while the two were roughly the same in Washington, Oregon, Nevada, Wyoming, Illinois, Vermont, and Connecticut. The SPM was lower in the rest of the states in the country.
“SPM rates were down for all major age categories: children under age 18, adults aged 18 to 64, and adults aged 65 and older between 2019 and 2020,” the Census report said. “The SPM rate for 2020 was 2.3 percentage points lower than the official poverty rate of 11.4 percent. This is the first time in the history of the SPM that poverty was lower using the SPM than the official poverty rate.”
The most important program for lifting people out of poverty, per the report, was Social Security, which helped keep 26.5 million individuals out of poverty. In addition, stimulus payments lifted 11.7 million people out of poverty, unemployment benefits helped an additional 5.5 million out of poverty.
The Census Bureau has been releasing such figures since the 1960s, although the Supplemental Poverty Measure is a newer concept.
“This report provides estimates of poverty using the SPM for the United States. The results illustrate differences between the official measure of poverty and a poverty measure that takes account of non-cash benefits received by families and nondiscretionary expenses that they must pay,” the report concluded. “The SPM also employs a poverty threshold that is updated by the BLS with information on expenditures for food, clothing, shelter, and utilities. In 2020, multiple pieces of legislation (CARES Act and CRRSA Act) were passed in response to the COVID-19 pandemic that provided households with additional income in the form of stimulus payments and expanded unemployment, SNAP, and pandemic electronic benefits transfer (P-EBT) benefits. As a result, in 2020, for the first time in the history of the SPM, poverty is estimated to be lower using the SPM than using the official poverty definition.”
More recently, the arrival of payments from the expanded Child Tax Credit have made a difference in poverty rates.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist, and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.