Research Note: Number of People in Families With Below-Poverty Earnings Has Soared, Especially Among Black and Latino Individuals

About 75 million non-elderly individuals lived in families with combined weekly earnings below the poverty line in May, CBPP analysis of new Census Bureau data shows -- far above the pre-pandemic (February) level of roughly 60 million, though below the April figure of about 80 million. (See Figure 1 and Table 1.)

Figure 1

The Bureau of Labor Statistics' official monthly statistics on the record losses in jobs and wages show the pandemic's devastating impact on workers as individuals. But they don't directly show what this means for families' ability to make ends meet. Our new analysis shows the extent to which families have lost earning power and may now need government help in order to meet basic needs. Government assistance is likely keeping many families' total income (including government benefits such as unemployment assistance) above the poverty line.

From February to May 2020:

• The number of non-elderly individuals living in families with combined weekly earnings below the poverty line rose by 14.7 million (24 percent), from 60.4 million to 75.2 million.
• The number of non-elderly individuals with no family earnings rose even more: by 16.5 million (40 percent), from 41.5 million to 58.0 million.
• Among non-elderly Black and Latino individuals, the number with below-poverty family earnings rose by 2.7 million (27 percent) and 4.1 million (29 percent), respectively. Among non-elderly, non-Latino whites, the increase was 5.5 million (17 percent).
• The number of children in families with below-poverty earnings rose by 3.8 million (22 percent), from 17.3 million to 21.1 million.

Between May 2019 and May 2020, the number of non-elderly individuals with below-poverty family earnings rose by close to 13 million.

Many of these families are now receiving help from relief measures, including expanded unemployment and SNAP benefits. But the relief measures enacted to date, including those boosting unemployment benefits and expanding eligibility, are slated to expire in coming months, while the Congressional Budget Office and others project that unemployment will remain high through 2021.

Figure 2

Our analysis also shows that the current recession has hit people of color the hardest. (See Figure 2 and Table 2.) Of special note, Black and Latino workers not only are overrepresented in some of the most-affected industries, but were already at a disadvantage when the recession started due to the nation's long history of inequitable policies and practices in employment, education, and housing. All racial and ethnic groups have experienced sharp earnings losses, but the share of the non-elderly population living with below-poverty earnings started higher and rose more for Black and Latino individualsthan for white individuals. From February to May 2020, the share of non-elderly individuals living with below-poverty family earnings:

• Rose by 7.9 percentage points among Black individuals, from 27.8 percent to 35.7 percent;
• Rose by 7.4 percentage points among Latino individuals, from 25.9 percent to 33.3 percent;
• Rose by 3.7 percentage points among non-Latino white individuals, from 20.8 percent to 24.5 percent.

Among non-elderly Asian individuals, the share living in weekly earnings poverty started lower than for non-elderly, non-Latino white individuals but rose more, by 10.1 percentage points from February to May.

Comparing over the last 12 months to avoid any seasonal influence also shows a large increase in poverty for the overall population. Between May 2019 and May 2020, the share of non-elderly individuals with below-poverty family earnings rose by 4.9 percentage points.

Of those with below-poverty earnings prior to the crisis, some had earnings but earned less than the poverty line; others were between jobs and looking for work or were out of work for other reasons, such illness, school, or early retirement.

Methodology

These figures are from our analysis of the outgoing rotation groups (ORG) of the Census Bureau's monthly Current Population Survey (CPS). The ORG, which makes up just under one-fourth of the CPS monthly sample, includes questions about individuals' usual weekly earnings. Using those data, and annual thresholds for the official poverty measure divided by 52 weeks (and adjusted for monthly inflation by the official Consumer Price Index for all urban consumers), we calculated the number of individuals in families with earnings below the weekly poverty line.^[1] (We counted a two-adult two-child family poor in February 2020 if its weekly earnings were below $504; the weekly threshold in May was $500.) The May 2020 survey covered earnings in the week beginning May 10.

The estimates are less precise than the Census Bureau's official annual poverty figures, in part because the ORG sample is relatively small (about 12,300 households in February) and participation in the survey declined non-randomly in the pandemic (to about 11,600 in May). The smallest group shown here -- non-elderly Asian individuals -- is based on a sample size of 513 households in the May 2020 survey.^[2]