That's despite a drop in median household income of more than $2,000, and the largest job losses since the Great Depression. So how did that happen? Let's go into the Supplemental Poverty Measure, and go over the difference between the supplemental figure and the “official” poverty measure.
Absolutely incredible: Census says poverty rate **fell** in 2020 ***during one of the worst labor market shocks in US history***, due to the combo of stimulus checks/federal relief that reached millions both in and outside the workforce. Reflects limits of jobs to reduce poverty. https://t.co/rgOKZo50qi— Jeff Stein (@JStein_WaPo) September 14, 2021
Income used for estimating the official poverty measure includes cash benefits from the government (e.g., Social Security, unemployment insurance benefits, public assistance benefits, and workers’ compensation benefits), but does not take into account taxes or noncash benefits aimed at improving the economic situation of the population. The SPM incorporates all of these elements, adding cash benefits, noncash transfers, and stimulus payments, while subtracting necessary expenses such as taxes, medical expenses, and expenses related to work. An important contribution of the SPM is that it allows us to gauge the potential magnitude of the effect of tax credits and transfers in alleviating poverty. We can also examine the effects of nondiscretionary expenses such as work and medical expenses.Figure 8 shows the effect that various additions and subtractions had on the number of people who would have been considered poor in 2020, holding all else the same and assuming no behavioral changes. Additions and subtractions are shown for the total population and for three age groups. Additions shown in the figure include cash benefits, also included in the official measure, as well as noncash benefits included only in the SPM. This allows us to examine the effects of government transfers on poverty estimates. Since child support paid is subtracted from income, we also examine the effect of child support received on alleviating poverty. Child support payments received are counted as income in both the official measure and the SPM (but child support paid is only deducted in the SPM).I also don't think it was a coincidence that these measures were put in place when a Republican president and Republican Senate were trying to stay in power in 2020. Even GOPs know that helping the poor, providing a robust safety net, and giving checks to most Americans helps the economy even in the worst of times. Which tells you that their crocodile tears about deficits and debt in 2021 has everything to do with trying to hurt Dems' chances in 2022, and nothing to do with any kind of real beliefs.
Poverty in the US declined during the pandemic because out imperfect political system sort of worked. What this graph shows is that the level of poverty in the US is a choice and that the social safety net works if given a chance. pic.twitter.com/5oeTT86lvA— Don Moynihan (@donmoyn) September 14, 2021