Poverty, hunger on the rise
Study blames end of $1,200 stimulus payments, extra $600 for unemployment in COVID relief
Poverty actually declined early on in the pandemic, thanks to aggressive COVID-19 relief measures, but has been on the increase since those programs expired. (Shutterstock)
By Ted Cox
U.S. poverty actually declined in the pandemic, thanks to aggressive relief tactics like the $1,200 stimulus payments and the extra $600 a week in unemployment benefits, but is once again on the rise as those programs have not been sustained.
That’s the conclusion of a new poverty measure providing near-real-time estimates drawn from U.S. Census Bureau data. Released this month, “Real-time Poverty Estimates During the COVID-19 Pandemic” compiles data through October and finds that poverty is once again on the rise after actually declining in the early months of the pandemic.
The study, produced by Bruce Meyer of the University of Chicago, James Sullivan of the University of Notre Dame, and Jeehoon Han of Zhejiang University in China, credits the so-called stimulus checks sent to taxpayers in April and May, as well as the extra $600 a week in unemployment insurance provided under the Pandemic Unemployment Compensation relief program.
“Their analysis shows that poverty declined in the first few months after the start of the pandemic,” a release on the study stated. “They find that the poverty rate fell by 1.5 percentage points from 10.9 percent in the months leading up to the COVID-19 pandemic (January and February) to 9.4 percent in the three months at the start of the pandemic (April, May, and June).” The poverty rate declined across almost all demographics and geographical areas across the country.
The one-time stimulus checks provided $1,200 to individuals and $2,400 to married couples without children, with extra stipends for children, and with the maximum amount going to individuals making less than $75,000 and couples making less than twice that. But the one-time stimulus payments were never repeated, and the extra $600 a week in unemployment benefits expired at the end of July.
As a result, the study states, “Poverty rose nearly 2 percentage points from 9.4 percent in the period from April to June to 11.3 percent for September and October. Nearly 7 million have been added to the ranks of the poor since May.” Just as it was anomalous that poverty should decline in the midst of a pandemic producing an economic recession, it was equally jarring that the poverty rate should rise in October even as the U.S. unemployment rate was declining by a full percentage point to 6.9 percent.
Professor Meyer told NBC News: “The poverty rate fell initially in the pandemic because we initially provided a lot of aid. People are (now) running down their stock of savings if they had any. They already asked about borrowing money from family and friends. Their ways of coping are starting to run out. The fact that their income is still below what it was before the pandemic is getting to be a bigger and bigger problem.”
“The poverty rate fell initially in the pandemic because we initially provided a lot of aid.”
According to the study, “The increase in poverty in recent months was more noticeable for Blacks, children, and those with a high-school education or less. For Blacks, poverty rose by 5.4 percentage points in recent months. The estimates also suggest that poverty rose more in states with less-effective unemployment-insurance systems.” It went on to warn that poverty could continue to rise as two programs — one extending the maximum time to draw on employment by 13 weeks, and another granting expanded federal benefits to independent contractors, freelancers, and so-called gig workers ineligible for conventional unemployment — are set to expire at the end of the year.
“There are groups that are going to continue to pay a steep price as a result of the pandemic, and I think it does call for some intervention,” Professor Sullivan told NBC News. "Either the labor market has to improve for those groups, or it could come in the form of public policy."
President-elect Biden is pushing for Congress to pass another ambitious coronavirus relief package, perhaps even before he takes office in January during the current lame-duck session.
The rise in poverty was having predictable results. The Washington Post reported Thursday that “more Americans are going hungry now than at any point during the deadly coronavirus pandemic.” The Post’s study, also culled from U.S. Census Bureau data, found that, as of early November, 12 percent of U.S. adults said they sometimes or often didn’t have enough to eat in the previous week, and that figure rose to 16 percent of households with children — both pandemic highs.
“It’s been driven by the virus and the unpredictable government response,” said Jeremy Everett, executive director of the Baylor Collaborative on Hunger and Poverty in Waco, Texas.
Clearly, the nation needs a more predictable government response under the Biden administration to curtail the pandemic and minimize its economic fallout.