Spotlight Exclusives

Poverty in 2019: Good news from a lifetime ago

H. Luke Shaefer H. Luke Shaefer, posted on

To mark Tuesday’s release of the 2019 income, poverty, and health insurance coverage data from the U.S. Census Bureau, Spotlight on Poverty and Opportunity invited reactions and analysis from across the ideological and policy spectrum. This analysis is from H. Luke Shaefer, PhD, the Hermann and Amalie Kohn Professor of Social Policy at the Gerald R. Ford School of Public Policy and Director of Poverty Solutions at the University of Michigan.

It’s hard these days to remember life in 2019, but this year’s poverty report indicates that it was a great year in the fight against poverty. The official poverty rate fell to 10.5%, the lowest ever recorded. COVID-19 interfered with data collection and may have biased this rate downward, but even after correcting for that, 2019 was as good a year as we’ve ever had. The child poverty rate of 14.4% is at its lowest since 1974, and the poverty rate among African-American children has never been lower, nor has that of female-headed families. The Supplemental Poverty rate was also as low as we’ve ever seen. This marks five consecutive years of declining poverty, which is tied to the fact that the U.S. in 2019 was in the midst of the longest economic expansion in history.

To give us a more holistic understanding of how well we are doing, scholars have actively explored a range of metrics of material well-being in recent years. Measures of food insecurity and housing hardships, for example, track closely with the official supplemental poverty rates year over year, countering claims by some that poverty has fallen more steeply than official estimates indicate. When we look at 2019 with a more holistic lens, the evidence is a bit more mixed on the year.  Once again, food insecurity followed the poverty trend, falling to about where it was in the year 2000. The Salvation Army’s Human Needs Index, however, finds higher levels of need at their agencies in 2019 than in the years before the Great Recession. More Americans sold their blood plasma for money in 2019 than any year before. Our homelessness counts actually increased in 2019 for the first time in a number of years. And while we don’t have 2019 child homelessness and housing insecurity numbers for public schools yet, we know these went up rather than down in in 2017-2018, despite multiple years of declining poverty. These indicators give pause when we’re trying to interpret where we are in the fight against poverty. At the very least, they indicate that there are a lot of people hurting even in our very best year. We should celebrate the good numbers, and then also recognize that good isn’t nearly good enough.

Of course, the poverty rate in 2019 might seem irrelevant because the world completely changed this past March. The economic crisis brought on by COVID has been unlike any in recent history—not only have jobs disappeared, but so has access to school-based supports and social services. Yet also unprecedented has been the federal government’s response, at least so far. The changes to unemployment insurance were an acknowledgement of that program’s failure to cover low-earning workers, and provide adequate benefits. And in an unprecedented move, the economic stimulus payment was made available even to families with no earnings, an acknowledgement that our policies often leave the most vulnerable—those in extreme poverty—out.

Many families are hurting, but so far the evidence finds that these policies that focused on broad access to cash were hugely effective. People used benefits to do things like pay their rent, and evictions have not skyrocketed. Spending among low-income households dipped early on but stabilized as benefits rolled out. Yet much of the impact of these benefits is in the rear view mirror and no-one knows what will happen in the future. We should take these lessons on the effectiveness of the response to COVID both into the next phase of addressing the current crisis, and into the fight against poverty over the long term.

Luke Shaefer, PhD, is the Hermann and Amalie Kohn Professor of Social Policy at the Gerald R. Ford School of Public Policy and Director of Poverty Solutions at the University of Michigan.

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