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U.S. poverty at its worst since 1960s

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Zelda Caldwell - published on 01/27/21

Americans are suffering amid the the coronavirus pandemic and its effect on the economy.

The United States is witnessing its largest increase in poverty in almost 60 years, according to a recent report.

As the coronavirus pandemic continues unabated, more Americans have fallen into poverty, according to a study by economists from the University of Chicago and University of Notre Dame.

Sharpest rise in poverty since the 1960s

At the end of 2020, 8 million additional Americans were designated as poor by the U.S. government. Poverty rose from 9.3 percent in June to 11.7 percent in late November.

The authors of the study, “Real-time Poverty Estimates During the COVID-19 Pandemic through November 2020,” note that the increase comes after a period in which the poverty rate was declining.

“Our initial results showed that poverty declined in the first few months after the start of the pandemic. The poverty rate fell by 1.5 percentage points from 10.9 percent in the months leading up to the COVID-19 pandemic (January and February) to 9.4 percent in the three months at the start of the pandemic (April, May, and June),” the researchers write.

Expiration of government benefits contributed to rise in poverty

They attribute the recent increase to a cessation in government benefits distributed during the pandemic.

“Poverty has risen sharply, however, in recent months as some of the benefits that were part of the government relief package have expired,” they write, and go on to explain the sharp rise in poverty.

“Poverty has risen each month since June, even though the unemployment rate has fallen by 40 percent (from 11.1 percent to 6.7 percent) over this period. This disconnect between poverty and unemployment is not surprising given that some government benefits have expired, unemployment insurance benefits are typically only about half of pre-job loss earnings, and five million people have left the labor force in the past year and therefore are not counted as unemployed. Despite the decline early in the pandemic, poverty is now higher than it was at the start of the year,” they conclude.

Visit the Poverty Measure Dashboard, where the authors of the study publish monthly reports on the U.S. poverty rate.

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Poverty
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