Poverty Declined In 2020, The Result Of Government Aid, Census Bureau Reports

Poverty in the United States fell last year, even amid the impact of the pandemic, due to government aid, including relief payments and unemployment insurance. That's according to new data just released by the U.S. Census Bureau.

The Supplemental Poverty Measure rate in 2020 was 9.1%, 2.6 percentage points lower than that rate in 2019.

Relief payments moved 11.7 million people from poverty, according to the Census data, and unemployment insurance benefits kept 5.5 million people from falling into poverty.

The official poverty rate was 11.4%, up 1.0 percentage point from 2019. But that official rate does not include many types of government aid, including stimulus checks, though it does include unemployment insurance.

The poverty threshold is an income of about $26,000 for a family of four, or about $13,000 for an individual. Last year there were more than 37 million people living in poverty in the United States by this definition.

But there's another way the government measures poverty. The Supplemental Poverty Measure, or SPM, incorporates food and housing assistance and in 2020, COVID-19 relief checks. This is the first time that the supplemental rate is lower than the official poverty rate.

"I think this really shows the importance of the social safety net," said Liana Fox, chief of the poverty statistics branch in the Social, Economic and Housing Statistics Division at the Census Bureau. "When we see differences in trends with the official poverty rate and the SPM ... that's really the impact of our tax system, that's the impact of our noncash benefits."

But with many of the COVID-19 relief packages now expired, the gains on poverty could be short-lived.

Median household income dropped by 2.9% last year, from $69,560 in 2019 to $67,521 in 2020. Incomes in the Midwest, South and West were most affected.

There was also an 11.5% decline in the number of full-time, year-round workers between 2019 and 2020, and the data suggests that most of the full-time, year-round jobs lost were at the lower end of the income scale.

But those who kept their jobs did well last year, with median earnings rising 6.9% for full-time, year-round workers from 2019.

Data showed that 8.6% of Americans didn't have health insurance at any point last year. There was no statistically significant change in the uninsured rate between 2018 and 2020, though fewer people had private insurance in 2020 and more had public coverage.

"This was driven by a half a percentage point increase in Medicare coverage, likely due to population aging," said Sharon Stern, assistant division chief for employment characteristics at the Census Bureau.

Women continue to make 83 cents on the dollar compared with men, unchanged from 2019.

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