International Forecaster Weekly


Data released by the Census Bureau this week show how the government’s stimulus programs since last March kept millions of Americans out of poverty and preserved their access to health care. 

Guest Writer | September 18, 2021

By Dave Allen for Discount Gold & Silver

Data released by the Census Bureau this week show how the government’s stimulus programs since last March kept millions of Americans out of poverty and preserved their access to health care. 

Despite one of the nation’s worst labor markets ever.

The official poverty rate in 2020 was 11.4%, with 37.2 million people in poverty — an 8.6% increase from 10.5% in 2019, which was the lowest rate since 1959. 

It was also the first annual increase in the poverty rate following five straight annual declines. The increase in poverty coincided with the 2020 recession and pandemic. 

By contrast, during the Great Recession, the poverty rate increased 14.4% — from 12.5% in 2007 to 14.3% in 2009. 

Thus, the increase in poverty during the 2020 recession (1.0 percentage points) was 45% smaller than the increase associated with the Great Recession (1.8 percentage points). 

Most of that difference can be attributed to special pandemic aid passed by Congress and enacted into law by the White House since March 2020.

Pandemic Aid Kept Millions More Out of Poverty

All federal government aid combined (regular plus pandemic aid) protected 53 million people from poverty in 2020 — up from 35 million in 2019, according to the nonpartisan Center for Budget and Policy Priorities. 

If you exclude income from government assistance, the poverty rate would have increased by 2.8 percentage points, reflecting the reality of many people seeing their private incomes fall because of the pandemic. 

When government assistance is included, however, poverty fell by 2.6 percentage points.

Applying one of the Bureau’s main poverty measures, the number of people with income below the poverty line fell by 8.5 million from 2019 because of pandemic relief measures (together with existing programs). 

Stimulus payments kept the annual incomes of almost 12 million people above the poverty line. 

Unemployment insurance benefits kept 5.5 million people out of poverty — 5 million more than 2019 — and monthly nutrition assistance 3.2 million.

The annual figures used by Census average together impressive amounts of relief — stimulus payments, enhanced jobless benefits, food assistance, medical coverage, and more.

But the figures obscure the weeks and sometimes months of hardship, when families were waiting for aid to arrive or wondering if Congress would renew expiring benefits or pass a second stimulus payment. 

To wit, over $163 billion in stimulus payments weren’t even approved until the last week of last December. 

Yet, most of those dollars are counted in the Bureau’s annual income figures.

That’s because it counts tax credits (including the stimulus payments, which were delivered through the tax system) based on the tax year for which they are received (not in which).

Poverty Would Have Been Far Worse Without Relief

These numbers make it clear that poverty would have been far worse last year without the unprecedented relief enacted by Washington. 

Enhanced jobless benefits kept a record number of people above the official poverty line, more even than in 2010 after the Great Recession. 

The unemployment expansions broadened the group of workers eligible for jobless benefits as well as increased the level of benefits they received.

The CBPP says “both were important in protecting people from poverty during the crisis.”

Now that these expanded benefits have expired (as of Labor Day), the baseline state-run system is back.

Those state-run programs by and large leave out millions of jobless workers — gig workers, independent contractors and the self-employed — and generally provide insufficient benefits to those who do qualify. 

The CBPP argues that if state systems had been stronger going into the crisis, “workers would have been far better served and families would have faced far less hardship when the help they needed was badly delayed.”

At the same time, policies enacted during the pandemic to help Medicaid participants maintain coverage, helped stabilize the uninsured rate during a period of rapidly rising unemployment. 

Other data show that enrollment in Medicaid and the Children’s Health Insurance Program increased by nearly 9 million people from February through December 2020 (data collected during this time are reportedly unreliable). 

The bottom line: CPBB’s surprising results suggest that federal pandemic stimulus aid, while costly in a monetary sense, served a valuable purpose in saving millions of Americans from poverty.

Let's see what happens to this vulnerable group in the coming weeks and months and how it will affect next year's Census update.