New data released from the United States Census Bureau reveals that poverty decreased last year largely because of the swift and substantial federal relief that Congress enacted at the start of the pandemic to try to prevent widespread financial hardship as the nation experienced the worst economic crisis since the Great Depression.
Census Bureau reported Tuesday that 9.1% of Americans were living below the poverty line last year, down from 11.8% in 2019.
37 million people were living in poverty last year. The government defines poverty as an income below about $13,000 for an individual or about $26,000 for a family of four.
The Census Bureau estimated that the direct checks alone lifted 11.7 million people out of poverty last year; unemployment benefits and nutrition assistance prevented an additional 10.3 million people from falling into poverty, according to an analysis of the data by The New York Times.
According to the Census Bureau, 11.7 million Americans have uprooted from poverty thanks to the direct checks sent from the government as part of the CARES Act and the American Rescue Plan. 5.5 million people were kept from becoming impoverished by unemployment insurance benefits.
The average household income declined by 2.9% in 2020. The number of full-time, year-round workers declined by 11.5% between 2019 and 2020.
Those that decided to continue working full-time year-round saw their earnings increase by 6.9%.
“I think this really shows the importance of the social safety net,” Liana Fox, Chief of the Poverty Statistics Branch in the Social, Economic and Housing Statistics Division at the Census Bureau, said. “When we see the 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.
The increase of 2 million people without health coverage throughout last year was twice as large as in 2019. Still, the 8.6% of U.S. residents who lacked coverage throughout 2020 was close to 2018 levels, census officials said.
The census data shows that the rate of uninsured was especially high in a dozen states that have chosen not to expand Medicaid eligibility under the Affordable Care Act — nearly double the rest of the country.