A Historic Decrease in Poverty

In early 2020, just before the coronavirus upended American life, I sat down with a prominent poverty expert and asked what she thought of the efforts to overhaul the child tax credit. At the time the provision largely excluded the poor because they earn too little to owe federal income tax. But congressional Democrats wanted to turn the credit into a broad program of cash payments that would include people with the lowest earnings—in essence, creating a guaranteed income for families with children.

Many countries provide such subsidies, often called children’s allowances, and visions of an American equivalent had long animated the liberal imagination. But for a quarter-century or more, US policy had moved in the opposite direction, against unconditional cash aid, which detractors said discouraged work and fostered dependency. Now interest in an income guarantee for children was growing.

The Democrats, led by Representative Rosa DeLauro of Connecticut and Senators Sherrod Brown of Ohio and Michael Bennet of Colorado, wanted to give families up to $3,600 a year per child. Estimates suggested that the payments would cut child poverty nearly in half. The National Academies of Sciences, Engineering, and Medicine lent the effort intellectual heft with a report showing that income supplements led poor children, on average, to higher earnings as adults, better health, and fewer criminal arrests.^*

But the expert I consulted was a realist. With experience as a Washington policymaker as well as a scholar, she knew how hard it was to expand the welfare state. “That will never happen in the United States,” she said. I figured she was probably right.

The first checks went out three months ago.

This has been a remarkable time in anti-poverty policy. Old certainties about what’s feasible no longer hold, and the future is up for grabs. The new child tax credit, a one-year change the Democrats hope to make permanent, not only reduces poverty but subsidizes child-rearing well into the middle class. It is part of a pandemic-era expansion of safety-net programs that had already reached eye-popping proportions before President Biden proposed the multi-trillion-dollar bill now pending in Congress amid unified Republican opposition and Democratic feuding over its costs. If enacted in full, the bill would greatly expand access to health care, childcare, and education, and preserve the expansion of the child tax credit. It looms so large that it has overshadowed the important story of how the country curbed poverty earlier in the pandemic.

The aid Congress provided was immense: the three rounds of stimulus checks, passed between March 2020 and March 2021 and provided to all but the most affluent, sent families of four more than $11,000. Expansions of unemployment insurance reached millions of workers previously ineligible for aid and provided most of them more than they had earned on the job. In the Supplemental Nutrition Assistance Program, or SNAP—food stamps—average benefits temporarily doubled. (Last year’s aid passed with bipartisan support and was signed by President Trump, while this year’s package was enacted by Democrats alone.) As a reporter covering poverty for The New York Times, it’s my job to keep track of these developments, but so much was happening earlier this year that I almost missed the creation of an emergency rental aid program meant to forestall evictions. It sprang into being with little notice and $46 billion, a sum that rivals the annual budget of the Department of Housing and Urban Development.

To be sure, these programs are mostly short-lived, their futures as fragile as the Democrats’ hold on power. On some fronts the pendulum has already swung back. Starting in June, about two dozen Republican governors put an accelerated end to the expanded unemployment benefits, which expired nationwide in September, complaining that the money kept people from returning to work. In Congress, the Republicans’ concern about the deficit has returned on schedule, after vanishing when Trump held power. By obstructing the Democrats’ current attempt to raise the debt ceiling, even at risk of catastrophic default—a crisis recently postponed until December—they are refusing to pay for tax cuts and spending they already approved.

Still, the expansion of the safety net is a departure from business as usual so large it may not be fully appreciated even by those keeping watch. The Census Bureau recently reported that poverty in 2020 had plunged to an all-time low, meaning that the new aid more than compensated for lost wages during the first year of the pandemic. Cutting poverty in the midst of a recession is the social-policy equivalent of defying gravity. Perhaps some people, watching 20 million jobs vanish at the start of the pandemic, predicted that the result would be a record reduction in poverty. I certainly didn’t.

It’s true that some families have suffered significant hardship, and there is plenty to criticize in the aid delivery. Unemployment checks were often delayed, and bottlenecks in rental relief risked adding millions to the ranks of those already evicted or otherwise forced from their homes. Skeptics can raise legitimate questions about whether the benefits were commensurate with the costs. Still, the scale of poverty reduction during this time has no historical precedent. Even if the safety net shrinks to its pre-pandemic size, and the current statistics become a blip on a chart, it will be a blip to remember. It’s a blip that says high levels of poverty are a political choice, not a fate.

Mark Robert Rank, Lawrence Eppard, and Heather Bullock, three left-leaning academics, were just finishing their poverty primer, Poorly Understood: What America Gets Wrong About Poverty, when the pandemic began. The book, published in March 2021, makes three main arguments: that poverty is more widespread than most Americans realize, that upward mobility is more limited, and that aid to the poor is more modest than generally assumed. It’s written for a general audience and advocates a larger safety net, which it says is within reach but makes seem unlikely by describing the powerful forces that impede its expansion. Those forces include racism, class bias, and the widespread belief that opportunity abounds for anyone willing to break a sweat. Read now, this account of the factors inhibiting change makes the trillion dollars spent on pandemic-era aid all the more astonishing. When the authors called for “substantial family or children’s allowances,” I scribbled in the margin, “Done!” Or done for now, at least, with its future pending.

Poorly Understood makes a persuasive case that the risks of falling into poverty are greater than commonly recognized. By the Census Bureau’s most comprehensive measure (the Supplemental Poverty Measure), the poverty rate in 2020 was 9.1 percent—the vast majority of Americans weren’t poor. (Under that measure, the bureau considers a typical family of four poor if its income falls below about $30,000.) But drawing on studies that follow people for extended periods of time, the authors find that nearly 60 percent of Americans will experience poverty between ages twenty and seventy-five, and even more will fall into “near poverty.”

It’s possible that these numbers overstate the risks of becoming poor: the authors use a different Census Bureau measure (the Official Poverty Measure), which is widely regarded as flawed since it ignores most government aid, including SNAP, subsidized housing, and the earned income tax and child tax credits. The Supplemental Poverty Measure more fully accounts for the safety net. Still, the authors are right that poverty is more common than American “myths, stereotypes, and misperceptions” suggest.

Poverty would be less concerning if it were a brief transition to a better life. But modern scholarship has called into question the cherished notion that the United States is a country of exceptional class mobility. The authors of Poorly Understood cite the economist Miles Corak, a professor at the Graduate Center of the City University of New York, who has examined the degree to which a father’s earnings predict those of his sons. (Studies of intergenerational mobility often focus on men since they include earlier generations when women were less uniformly engaged in paid labor.) In Denmark, “intergenerational elasticity” is 0.15—about 15 percent of a father’s economic status is passed along to his sons. In Germany, the figure is about a third. In the US, the share of advantage or disadvantage passed from fathers to sons rises to nearly half. Among the fifteen wealthy countries that Corak examined, only two (the United Kingdom and Italy) were more class-bound than the US, and only slightly so.

Other researchers have found the “stickiness” of class status especially pronounced at the top and the bottom—people born rich or poor tend to stay that way. Inequality is a consequence of blocked mobility. But it is also a cause: the more that wealth concentrates at the top, the more power the wealthy have to pull up the ladder. If you doubt the lengths to which rich parents go to protect their children’s advantages, think of the Varsity Blues scandal, in which parents bribed counselors, falsified test scores, and faked athletic résumés to get their children into selective schools, including Stanford, Yale, and USC. For all the salience of the rags-to-riches tale, the authors of Poorly Understood write, Americans’ economic status is determined “to a much greater extent” by family resources than it is in many comparably wealthy nations.

Poorly Understood also attacks the idea, advanced by many conservatives, that the needy are already protected by an extensive safety net. As a share of GDP, France, Austria, Denmark, and Finland all spend at least 50 percent more than the US to help people of modest means and their poverty rates are roughly half as high. A pre-Covid study by Jared Bernstein, now a member of the White House Council of Economic Advisers, looked at poverty in rich countries on four continents. Before accounting for taxes and government aid, the American poverty rate was in the middle. But the safety net cut poverty by 80 percent in Sweden and by more than two thirds in Britain and Germany, while it cut poverty by only about one third in the US. That left the US with the highest poverty levels of all twenty countries reviewed.

Why does the US tolerate more poverty than its peers? In part, the authors argue, it is because the US is more racially diverse. (Or, one might add, it was for most of the twentieth century, when the safety net took shape—European demography is changing.) Some whites have been reluctant to support antipoverty programs because they believe, correctly, that the aid disproportionately helps minorities (who after centuries of exclusion are more likely to be poor). Blacks are nearly twice as likely as whites to live in poverty, though in absolute terms poor whites are more numerous. America’s individualist ethos—the idea that anyone can get ahead—also inhibits safety-net spending. And the dynamics of American politics favor the rich: money dominates, unions are weak, voter turnout is low, the Senate is antidemocratic, and the Electoral College gives small, conservative states outsized clout.

There is truth in the authors’ account, but it is missing some nuance. The US may not be Canada or Denmark, but neither is its safety net “nonexistent,” as they call it. In their admirable drive for class solidarity, the authors also downplay the degree to which education, marriage, and steady work protect Americans from poverty. Their own statistics show that an adult without a high school degree is nearly six times as likely to be poor as one who finishes college. Rather than discounting education, for fear of “blaming the victim,” it would be more helpful to explore the factors that interfere with getting it. They touch on the issue only briefly.

Given how much the safety net has expanded since the book went to press, a notable feature is its treatment of poverty politics. Nothing in it foreshadows the aid expansions of the last eighteen months. Obviously, the authors couldn’t have foreseen the pandemic and the spending it propelled. But perhaps recent events suggest that the politics of poverty are more complicated than they seem.

The book puts a heavy emphasis on conservative complacency—the traditional faith in opportunity and upward mobility—as a hindrance to expanding the safety net and largely ignores the right-wing populism roiling the Republican Party. If there are hints of conservative support for the expanded child tax credit (Mitt Romney and a few social conservatives have proposed versions of the idea, perhaps in part because it might boost birth rates), that’s a reminder that Red State America is suffering what used to be described as inner-city ills—drug use, family breakdown, and joblessness. I’m not saying that the GOP is surrendering its distrust of government, only that many conservatives are less content with the economic status quo than the authors suggest. Not all conservatives believe, as Ronald Reagan proclaimed, that this is “morning in America.”

Consider not only how large but how varied the safety-net expansion has been since the coronavirus struck. The federal government spent about $800 billion on stimulus checks alone and hundreds of billions on expansions of joblessness aid. In addition to expanding SNAP, the government sent money to replace the meals children lost when their schools closed. The huge spending on emergency housing ($46 billion) was exceeded by the spending on childcare ($50 billion). The child tax credit provides $250 a month for every child—$300 for those under six. In covering the expansion for the Times, I exhausted my store of adjectives: extraordinary, remarkable, unprecedented.

Yes, the aid was temporary and sometimes delayed. The chaos in unemployment offices—state-run and underfunded—was especially bad, with some workers waiting months for checks. Still, huge sums flowed to people in need. I’ve spent a good part of the last eighteen months listening to their stories.

When the pandemic began, Dakota Kirby, a single mother in Indianapolis, lost her job caring for an elderly woman. Having started the position only recently, she wrongly assumed that she could not get unemployment aid. That left her feeding her two young children with SNAP benefits, which were too small to last the month. She skipped meals so that they could eat, supplemented their fare with butter beans and tuna from a food bank, and pawned her television set. But she still came up short at the grocery store checkout line, forcing her to remove frozen pizzas from her cart as strangers looked on. “It was humiliating—it makes you really sad and angry as a mom,” she said. Then three new sources of nutritional aid arrived, including higher SNAP benefits and money to replace the meals her daughter would have eaten for free if the school was open. The new assistance swelled her grocery budget by 40 percent, to ten dollars a person a day—“a big old jump!” she said—and provided the household with enough to eat.

Chenetta Ray, who works at a Houston recycling company, lost a third of her hours at the start of the pandemic when trash collections fell. Her car insurance lapsed. Her lights were cut off. She skipped meals and wore dirty work clothes to save money at the laundromat. When her teenage daughter discovered that they were behind on the rent, she offered to quit school and work, which Ray would not allow. Then Ray found out she had cancer. “I really got down and depressed,” she said. Two rounds of stimulus checks brought the family $4,000 this year, enough to pay some of Ray’s bills and get the CT scan she needed to guide her treatment. She received thousands more in rental assistance a few months later, which saved her from eviction. In addition to food and shelter, the aid eased her depression: “Part of the benefit of the stimulus to me was God saying ‘I got you.’… It took a lot of stress off me.”

Note that both women describe the same sequence of events—rising hardship, followed by rising aid. Early in the pandemic, press coverage and political debate focused so much on the former, for good reason, that the full extent of the latter has been obscured. In its official, statistical sense, poverty is measured on an annual basis, after tallying the income that arrives during the year. Though poverty seemed to be rising when the crisis began, so much aid eventually flowed that the opposite ended up being true.

Earlier this year I asked researchers at the Urban Institute, a Washington-based group known for its sophisticated modeling of changes in the safety net, to estimate this year’s poverty rate. The Census Bureau takes a long time to calculate its official numbers and hadn’t yet released last year’s figures—statistically, we were still in the dark. I expected the institute’s estimates to show that poverty was falling, but the decline was even greater than I had guessed. If the forecast in their recent report, 2021 Poverty Projections, proves right, poverty will fall by nearly half this year from its pre-pandemic level and reach a record low. The decline in poverty has been proportionately greatest among children, but the forecast shows that it has also fallen among Blacks, whites, Latinos, and Asians; Americans of every age group; and residents of every state. Even in an economy that has lost millions of jobs, there are about 20 million fewer people in poverty right now because of the enlarged safety net.

To illustrate how this happened, I tracked the income of a single mother named Kathryn Goodwin, who received an especially large increase in aid, partly because she has five children. When the pandemic began, she lost her job managing a group of Missouri trailer parks. But after a period of woes, including an eviction, she received $25,000 in unemployment benefits (three times what she would have received before the pandemic) and $12,000 in stimulus checks, and she is now receiving $1,400 per month through the child tax credit. With schools operating remotely and childcare lacking, she went a year without a job. But her income rose 30 percent, to a level well above the poverty line. “Without that help, I literally don’t know how I would have survived,” she said.

The Urban Institute’s 2021 figures are only projections, for a year not yet over. But the reasons to trust them have grown. The Census Bureau has finally released the numbers for the previous year, and the Supplemental Poverty Measure, the most comprehensive figure, tells the same tale: poverty in 2020, the first year of the pandemic, fell to an all-time low.

What explains such a large safety-net expansion in a country resistant to it? Obviously, the answer starts with the severity of the pandemic. The scale of the job-loss eliminated normal budgetary constraints and added the white middle class to the list of those in need. Family aid was also corporate aid, since businesses needed consumers with money to spend, which attracted conservative support. Most importantly, the pandemic removed the usual argument that people in need have themselves to blame. Promoting the $1.9 trillion rescue plan that the Democrats passed earlier this year, Biden hailed the “millions of Americans who, through no fault of their own, have lost the dignity and respect that comes with a job.” After the bill passed the Senate, he again cited Americans “out of work through no fault of their own,” and added, “I want to emphasize that: through no fault of their own.” Politicians as different as Maxine Waters on the left and Josh Hawley on the right used the same words.

Now, with the economy growing and jobs going unfilled, that brief pause in the politics of blame has probably ended. The reasons for job vacancies aren’t fully understood—they seem to include a lack of childcare, fear of the virus, and shifting expectations of work—but even with many aid expansions gone, including the higher unemployment benefits, conservatives are blaming the generosity of the current safety net for many people’s hesitation to take jobs.

Beyond the shock of the pandemic, a fuller explanation of the recent politics of poverty awaits. There are at least two contrasting points of view. An insider-centric perspective suggests that Democrats simply seized on a rare constellation of events to advance longstanding priorities. Rosa DeLauro introduced her first child tax credit bill in 2003. When the pandemic, and unified Democratic government, finally offered a chance to push it through, she and others grabbed the opportunity. Few Americans demanded it or even knew about it at the time.

A competing interpretation looks beyond Washington to forces unsettling the country—rising inequality, wage stagnation, and racial unrest, especially after the police killing of George Floyd in May 2020. Street protests put new pressure on Democrats to address racial and economic inequity. That pressure operates at both the ideological and interest-group level: Democrats owe their power—including the two Georgia Senate seats they won at the start of the year—to voter turnout by people of color. The Urban Institute’s projections suggest that those constituents are getting what they voted for, with poverty down 47 percent among Latinos and 52 percent among Blacks.

These two explanations aren’t mutually exclusive, but we probably need more distance from events to know which to emphasize. Consider the new expansion of SNAP benefits—the biggest permanent increase in the half-century history of the modern program. It occurred because the Agriculture Department revised the Thrifty Food Plan, a set of technical nutrition assumptions that determines the size of monthly benefits. The value of the plan was first set in 1962 (when the program was still being piloted) and, other than being adjusted for inflation, it had not grown since, despite the revolution in how Americans eat. (To cite one example, modern families, with less time to cook, consume more prepared food; they are more likely to eat canned beans than dried beans, which are cheaper but have to be soaked for hours.) Abundant research showed that SNAP benefits were too small to provide an adequate diet, and three quarters of households exhaust their benefits in the first half of the monthly cycle.

A few years ago a Republican Congress ordered a revision of the nutritional standards and omitted language that had previously required the revisions to be cost-neutral. This change in legislative instructions, seemingly inadvertent, opened the door to increased aid. Accelerating the nutritional review, the Biden administration issued a new Thrifty Food Plan, which caused an average benefit increase of more than 25 percent. About 42 million Americans—one in eight—will now get more money to buy food, and unlike the other pandemic-era expansions, the increase is lasting.

As the product of complex bureaucratic machinations, the SNAP increase could easily be described as an embodiment of insider-driven change. But when I talked to Tom Vilsack, the agriculture secretary, in August, he didn’t just tout the studies of how quickly the old benefits ran out or the science of apportioning legumes. He talked about the threat that poverty posed to American democracy. “We may have a Constitution and a Declaration of Independence, but if we had 42 million Americans who were going hungry, really hungry, they wouldn’t be happy and there would be political instability,” he said (meaning more instability than already exists). “The safety net is part of how you build a democratic fabric that works. It creates a much more stable and secure country.” Perhaps what he said was obvious, but I don’t recall previously hearing a Cabinet official justifying aid with a reference to democracy’s vulnerability.

If the aid expansion comes as a surprise, so does the push from Biden, a centrist’s centrist with no special interest in poverty but a habit of being where his party happens to be. Should even a portion of his giant safety-net bill pass—especially the child tax credit—the change in antipoverty policy could be historic. Biden has neither the eloquence nor the analytical skills of his two Democratic predecessors, but that’s not a problem. As others have noted, it may even be a benefit, since Joe’s average Joe-ness helps protect him from those calling him a socialist. There was nothing soaring about Biden’s rhetoric when he addressed Congress last spring, but in less than twenty words he said a lot. “We’re on track to cut child poverty in America in half this year,” he said. “And we can afford it.”