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U.S. Poverty Rate Fell Even in the Middle of the COVID-19 Pandemic
The poverty rate in the U.S. fell by 2.3 percentage points in April and May. This happened despite being in the middle of the COVID-19 pandemic. The rate was estimated by researchers from the University of Chicago and the University of Notre Dame.
The researchers' analysis of data comes from the Census Bureau's monthly household survey. It shows that the poverty rate fell from 10.9 percent in January and February to 8.6 percent in April and May.
“How Could That Be?”
Poverty rate fell in April, May because of coronavirus relief payments, researchers say – Fox Business https://t.co/zlNwAemFVv
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Dr. Bruce Meyer, who teaches public policy at the University of Chicago, said: “You can ask, ‘How could that be?’ The answer is the stimulus checks, the supplements to unemployment insurance and the expansion of unemployment insurance to people who have not been covered in the past.”
Fox Business explains that “the federal government sent one-time payments of up to $1,200 to individuals making less than $75,000 a year” under the CARES Act. They also bumped up unemployment insurance benefits by $600 per week.
“That doesn't mean there aren't individuals who have seen their incomes fall quite dramatically in this pandemic,” Meyer said. “More people had income gains than income losses.”
The unemployment rate in the country reached its highest rate in April since the Great Depression. However, poverty declined for all age groups.
“It makes the most sense to provide more targeted aid to those who are really suffering hardship, and that would be the unemployed,” Meyer said. “The current expansion of unemployment insurance was done very crudely, I am told, because state unemployment insurance directors argued they didn't have the ability to calculate supplements to benefits as a share of past earnings.”
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