Spotlight Exclusives

Child Poverty More Than Doubled in 2022, Census Data Shows

Spotlight Staff Spotlight Staff, posted on

The percentage of Americans in poverty, especially children, saw a dramatic increase last year the Census Bureau reported Tuesday, largely due to the end of COVID-era aid programs such as the expanded Child Tax Credit. The data shows the largest jump in child poverty since the Supplemental Poverty Measure began in 2009.

Some 12.4% of children were in poverty last year, up from 5.2% the year before and roughly comparable to pre-pandemic numbers in 2019. The Supplemental Poverty Measure takes into account certain non-cash government assistance, tax credits and needed expenses.

Overall, the supplemental poverty rate was 12.4% for 2022, up from 7.8% a year earlier and higher than it was prior to the pandemic. It’s the first increase in the rate since 2010.

In contrast, the proportion of Americans without health insurance at any point during the year dwindled — from 8.3 percent in 2021 to 7.9 percent last year. The greater availability of health coverage was driven in part by temporary provisions barring anyone from being dropped from Medicaid during the pandemic crisis—another former of aid that is now ending.

Tuesday’s Census data also noted a 2.3 percent drop in median household income, from $76,330 in 2021 to $74,580 in 2022. Real median earnings for both part-time and full-time workers also dropped over the last year by 2.2 percent.

Elaine Maag, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute, offered this reaction to Spotlight:

“Watching the share of children in poverty rise to almost pre-pandemic levels (12.4 percent) after experiencing historic lows in 2021 (5.2 percent) is not surprising but disappointing. The drop in poverty in 2021 was largely a function of the temporary expansion of the child tax credit (CTC) and the three Economic Impact Payments (stimulus checks) – both of which provided the maximum benefit to families with very low incomes. The Economic Impact Payments ended in March of 2021 and the CTC reverted to its pre-pandemic levels at the start of 2022. The Tax Policy Center estimates that in 2022, families in the bottom fifth of the income distribution received an average benefit of $1,460, about half the average benefit of middle-income families. Despite being the largest cash support for families with children, the TPC further estimates that almost 2 million children under 17 receive no benefit from the CTC and an additional 17 million children under 17 (about one-quarter of all children) receive less than the full $2,000 per child benefit because their parents do not earn enough.

“The effects of poverty can be seen across a child’s lifetime. Poverty in early childhood is connected to reduced gray matter development. Evidence suggests that children living in poverty start school less prepared and often face lower teacher expectations. This can lead to reduced achievement in school. Children who live in poverty are also more likely as adolescents to drop out of high school and have a lower probability of graduating from college as young adults. An inferior education leads to the development of fewer skills and abilities, resulting in lower-paying and less stable jobs and substantially reduced earnings. Children who grow up in poverty also are at higher risk of poor health outcomes, which is likely related to inadequate access to medical care.

“There are several relatively modest expansions to the CTC that could target assistance to families with low incomes that fall short of the 2021 expansion but could still provide substantial assistance to families with very low incomes. This should be a priority for policy makers concerned about the serious harms imposed by child poverty.”

Angela Rachidi, senior fellow and the Rowe Scholar in opportunity and mobility studies at the American Enterprise Institute, gave her reactions to the new Census numbers during an event at AEI on Tuesday, The Future of Poverty Measurement.

Rachidi and other panelists raised questions about the reliability and accuracy of the Census measurements, saying the data is more useful for seeing long-term trends than year-to-year changes.

On this year’s analysis, Rachidi said:

“It’s not going to be surprising to anyone that poverty, and let’s focus on child poverty for example, increased because when temporary policies go away, poverty is going to increase. But I think that the other headline we’re going to see is, why don’t we then just continue these temporary policies? Why don’t we just continue sending the expanded Child Tax Credit, for example, to households to keep that poverty measure low? And I can understand why that is an obvious conclusion.

“Part of what we’re trying to point out is that maybe these swings we see aren’t actually as big as the data suggests they are . . . and also why is this not a long-term strategy? And there’s a couple of really crucial reasons why it’s not.

“One is the cost. I mean, we are talking about an expanded Child Tax Credit that was $100 hundred billion a year, $1 trillion over 10 years. As we know, just from the recent news about the current deficit, that does not seem sustainable to me and I’m sure to a lot of others. The other thing is that some of these short-term reductions in poverty might actually have longer-term negative consequences for households, meaning lower employment. And then households don’t benefit from those non-financial things that come along with employment and you have more single parenthood and all the potential negative consequences associated with lower employment that might happen because of these benefits.

“So yes, again, obviously poverty’s going to reduce when you send money from the government to households in the short term. But I do think we have to think about the longer-term implications of some of these policies and what is really realistic from a financial perspective as well as just a wellbeing perspective for these households.”



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