Jul 29, 2021
A detailed analysis of the impact of federal economic relief programs enacted throughout the course of the ongoing coronavirus pandemic projects that the government aid will cut the poverty rate nearly in half this year--further evidence, according to observers, that poverty in the U.S. is a deliberate "policy choice."
According to a report published Wednesday by the Urban Institute, emergency federal initiatives including enhanced unemployment insurance (UI), three rounds of one-time direct stimulus payments, the expanded child tax credit, boosts to the Supplemental Nutrition Assistance Program (SNAP), and other benefits will result in a roughly 45% decline in poverty in 2021--20 million fewer people in poverty than in 2018.
"The combined benefits have the largest impact on children, reducing their projected 2021 poverty rate 81% relative to what it would be without any benefits (from 30.1% to 5.6%)," the Washington, D.C.-based think tank notes. "The Supplemental Nutrition Assistance Program alone keeps 7.9 million people out of poverty in 2021, and unemployment insurance benefits lower the number in poverty by 6.7 million (assuming all other programs are in place)."
In response to the new findings, historian Rutger Bregman said that "this is what basic income advocates have been saying for years: simply giving people money works."
"Eradicating poverty is not a utopian fantasy, it's a policy option," Bregman added.
Robert Cruickshank, campaign director at the advocacy group Demand Progress, echoed that argument, tweeting, "Poverty is a policy choice."
"It can be ended tomorrow by legislation," Cruickshank wrote. "We must never, ever forget this."
\u201cEye-popping charts illustrating the sharp drop in poverty *even during the pandemic*\n\nThe # of poor Americans dropped 20 million compared to 2018 \n\nLargely the result of direct payments, boosted food stamps and enhanced UI\n\nVia @JasonDeParle @aliciaparlap \nhttps://t.co/WnHuDoiZTm\u201d— Joseph Zeballos-Roig (@Joseph Zeballos-Roig) 1627525004
To illustrate how the recent expansions of federal aid have both rescued families from financial ruin and increased their incomes, the New York Timesspotlighted the story of Kathryn Goodwin, a single mother of five in St. Charles, Missouri, who lost her $33,000-a-year job due to the pandemic.
"Without the pandemic-era expansions--passed in three rounds under both the Trump and Biden administrations--Ms. Goodwin's job loss would have caused her income to plunge to about $29,000 (in jobless benefits, food stamps, and other aid), leaving her officially poor," the Times reported Wednesday. "Instead, her income rose above its pre-pandemic level, though she has not worked for a year."
"She received about $25,000 in unemployment benefits (about three times what she would have received before the pandemic) and $12,000 in stimulus checks," the Times continued. "With increased food stamp benefits and other help, her income grew to $67,000--almost 30% more than when she had a job."
\u201cWho says we can't get rid of poverty in the US? NYT reports 45 percent decline in poverty in 3 years, & a drop of 61 percent for children, which "exceeds the previous 50 years combined." This is what the right macroeconomic & anti-poverty policies can do. https://t.co/dn6zee4MZW\u201d— Mark Weisbrot (@Mark Weisbrot) 1627573442
While highlighting the far-reaching anti-poverty impacts of the pandemic aid, the Urban Institute emphasizes that unless Congress makes permanent the major federal expansions of unemployment benefits, nutrition assistance, and the child tax credit, poverty will surge once the emergency programs expire.
Earlier this week, the People's Policy Project estimated that 20 million people across the U.S. are set to either entirely lose or see reductions in crucial UI benefits in a little over a month unless Congress acts.
"Going forward, it will be important to consider what happens as pandemic-related policy expansions come to an end," the Urban Institute's report reads. "Substantial amounts of money were distributed through stimulus checks in the first half of 2021, benefiting most families. Many families with children will receive monthly advance child tax credits, beginning in July, and employment is projected to increase throughout the year."
"However, enhanced UI benefits and certain expanded SNAP benefits will expire in the second half of the year, potentially increasing hardship for families with few other resources and whose stimulus checks have already been spent," the report continues. "The advance child tax credits are a temporary measure, affecting income in 2021 and 2022."
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