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COVID AID PROGRAMS SPUR RECORD DROP IN POVERTY
A comprehensive study from the Urban Institute of the federal response to the pandemic shows huge but also temporary benefits for the poor — and helps frame a larger debate over the role of government in providing a social safety net. The huge response of the federal government to the Coronavirus will actually cut poverty in half this year compared to pre-pandemic levels.
The number of poor Americans is expected to fall by nearly 20 million from 2018 levels. This is a decline of almost 45 percent. The U.S. has never cut poverty so much in such a short period of time. This development is especially notable since it defies economic losses—the economy has nearly seven million fewer jobs than it did before the pandemic. And this decline in poverty is nearly three times the previous record.
This extraordinary reduction in poverty has come at an extraordinary cost, with annual spending on major programs projected to rise fourfold to more than $1 trillion.
Yet without further expensive new measures, millions of families may find this escape from poverty brief. The three programs that cut poverty most — stimulus checks, increased food stamps and expanded unemployment insurance — have ended or are scheduled to soon revert to their prepandemic size.
Poverty has also decreased across a broad range of groups: Caucasians, African Americans, Hispanics, Asians, all age groups and residents of every state.
“These are really large reductions in poverty — the largest short-term reductions we’ve seen,” said Laura Wheaton of the Urban Institute, who produced the estimate with her colleagues Linda Giannarelli and Ilham Dehry. The institute’s simulation model is widely used by government agencies. The (New York Times , 7-28-21) requested the analysis, which expanded on an earlier projection.
Progressives have said the new numbers vindicated their contention that poverty levels reflected political choices and that government programs could reduce economic need.
“Wow — these are stunning findings,” said Bob Greenstein, a longtime proponent of safety net programs who is now at the Brookings Institution. “The policy response since the start of the pandemic goes beyond anything we’ve ever done, and the antipoverty effect dwarfs what most of us thought was possible.” (New York Times, 7-28-21)
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2021 Poverty Projections: Assessing the Impact of Benefits and Stimulus Measures (Urban Institute)
Pandemic Aid Programs Spur a Record Drop in Poverty (New York Times, 7-28-21)
Federal Pandemic Aid Has Cut Poverty Dramatically, Study Finds (NPR, 7-31-21)
The big drop in American poverty during the pandemic, explained (Vox, 8-11-21)