The number of children in poverty fell by 46% in 2021 compared to the previous year, but poverty among people 65 and older rose 13%, according to a new U.S Census report.
The Census Bureau’s newly released data on national rates of poverty, income and health insurance offers a glimpse into the economy of Americans coping with the effects of the COVID-19 pandemic and the impact of president Joe Biden’s $1.8 trillion American Rescue Plan to counter the economic slowdown, high unemployment and inflation.
On Tuesday, Census officials said that federal COVID-related refundable tax credits and stimulus payments were the major contributors to reducing the number of children in poverty in 2021.
The 5.2% child poverty rate in 2021 is considered the lowest on record supplemental poverty measure, which takes into account government programs for low-income families that aren’t included in the official poverty measure.
“In 2021, child poverty fell to a historic low. In the past two years, the United States made more progress in reducing child poverty than ever before as a result of smart, evidence-based public policies,” said H. Luke Shaefer, faculty director of the University of Michigan’s Poverty Solutions, an initiative that aims to prevent and alleviate poverty through action-based research. “However, child poverty is on track to increase in 2022 because many COVID-era anti-poverty policies have been eliminated, especially the expanded Child Tax Credit.”
The overall poverty rate was 7.8% in 2021, in comparison with 9.2% in 2020, a general reduction of 15%, according to the Census information released Tuesday. All group ages experienced poverty reduction rates, except 65 years and older.
The real median household income was $70,800 in 2021, only slightly lower than the 2020 estimate of $71,200. However, income inequality increased by 1.2% between 2020 and 2021, which represents the first time the Gini index has shown an annual increase since 2011.
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