“We measure poverty every year, when the reality of poverty is faced on a daily basis,” said Hilary Hoynes, an economist at the University of California at Berkeley, who has studied the government’s response to the pandemic. .
According to the government’s official definition, the number of people living in poverty jumped from 3.3 million in 2020 to 37.2 million, among the largest annual increases on record. But economists have long criticized this definition, which dates back to the 1960s, and said it reflected reality particularly poorly last year.
The official measure ignores the impact of many government programs, such as food aid and housing and tax credits. This year, he also ignored direct checks sent to households, which were officially considered tax breaks. In recent years, the Census Bureau has produced an alternative poverty rate, known as the Supplementary Poverty Measure, which includes these programs and also takes into account regional differences in housing costs, medical expenses, and others. costs not taken into account in the official measure. Normally, the additional measurement is higher than the official measurement; 2020 was the first year in which the additional measure was weaker.
Many of the programs that helped people avoid poverty in the past year have expired, even as the pandemic continues. An estimated 7.5 million people lost their unemployment benefits this month after Congress allowed program extensions to expire during the time of the pandemic.
The new data could fuel efforts by President Biden and congressional leaders to embrace a more sustainable expansion of the safety net. The Democrats’ $ 3.5 trillion plan, which is still taking shape, could include paid family and medical leave, government-funded child care, and a permanent extension of the child tax credit. The Liberals said the success of aid programs last year showed that such policies must be continued and expanded.
“The bottom line is that we see the extremely powerful anti-poverty and middle-class income impacts of the government’s response,” said Jared Bernstein, member of the White House Council of Economic Advisers. He argued that success should encourage lawmakers to embrace Mr. Biden’s longer-term agenda for the economy.
“It’s one thing to temporarily lift people out of poverty – extremely important – but you can’t stop there,” Bernstein said. “We need to make sure that people do not fall back into poverty after these temporary measures are eased. “