Spotlight Exclusives

New Census Numbers Show Child Poverty Down Dramatically in 2021

Spotlight Staff Spotlight Staff, posted on

Child poverty was cut almost in half in the U.S. last year due to pandemic-prompted federal programs such as the expanded Child Tax Credit, the U.S. Census Bureau reported Tuesday. Income inequality, however, increased nationally for the first time in more than a decade.

The poverty rate fell to 7.8 percent in 2021, down from 9.2 percent the previous year, according to the Supplemental Poverty Measure, a measure that adjusts for geographic differences. The share of children living in poverty sank to a low of 5.2 percent, down 4.5 percentage points from 2020 and continuing a striking long-term trend.

The income inequality index increased 1.2% from 2020 to 2021, the first time the measurement known as the Gini Index has increased since 2011, according to a report on Current Population Survey results. Declines in household income among the poorest U.S. residents appears to have driven the widening of the income inequality gap. Households in the 90th percentile of the income distribution, the richest, had income that was 13.5 times higher than households in the 10th percentile, the poorest. That was a 4.9% increase from 2020.

“It is sensitive to extremes at either end,” said Liana Fox, a Census Bureau official told the Associated Press.  “This suggests that the decline in real income at the bottom drove the increase in the Gini index.”

Administration officials hailed the new numbers as indisputable evidence that the federal response to the pandemic, including the expansion of the federal Child Tax Credit and passage of the American Rescue Plan, boosted the lives of millions of working Americans. The expanded CTC expired in December and the Biden administration’s efforts to extend it were unsuccessful.

“It’s official: The American Rescue Plan & its Child Tax Credit cut poverty and child poverty to their lowest ever,” said White House Senior Advisor Gene Sperling. “Child Poverty cut nearly in half: from 9.7% to 5.2%. White, Black, Asian, Native American, and Hispanic Child Poverty fell to their lowest levels ever.”

“This has been a large-scale experiment that shows that child poverty is a solvable problem in the United States, and that poverty more broadly is,” Alix Gould-Werth, director of family economic security policy at the left-leaning Washington Center for Equitable Growth, told the New York Times. “So, in order to see these changes last, we really need sustained public investment.”

Scott Winship, senior fellow and director of Poverty Studies at the conservative American Enterprise Institute, posted on Twitter: “I am not shocked that poverty went down. And conservatives should admit that the CTC expansion was a big part of it. And it was still a bad idea to make it permanent, because the evidence suggests important LONG-TERM effects on work that remain bigger than what progressives say.”



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