Poverty Rate Soared in 2022 as Aid Ended and Prices Rose

Poverty Rate Soared in 2022 as Aid Ended and Prices Rose
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The increase in poverty reversed two years of large declines. Median income, adjusted for inflation, fell 2.3 percent to $74,580.

Poverty increased sharply last year in the United States, particularly among children, as living costs rose and federal programs that provided aid to families during the pandemic were allowed to expire.

The poverty rate rose to 12.4 percent in 2022 from 7.8 percent in 2021, the largest one-year jump on record, the Census Bureau said Tuesday. Poverty among children more than doubled, to 12.4 percent, from a record low of 5.2 percent the year before. Those figures are according to the Supplemental Poverty Measure, which factors in the impact of government assistance and geographical differences in the cost of living.

The increases followed two years of historically large declines in poverty, driven primarily by safety net programs that were created or expanded during the pandemic. Those included a series of direct payments to households in 2020 and 2021, enhanced unemployment and nutrition benefits, increased rental assistance and an expanded child tax credit, which briefly provided a guaranteed income to families with children.

Nearly all of those programs had expired by last year, however, leaving many families struggling to stay ahead of rising prices despite a strong job market and improving economy.

One pandemic program that did not expire was a temporary freeze in Medicaid terminations, a move that allowed the program to cover more Americans than ever. Because of that program, the share of Americans without health insurance matched a record low last year of 7.9 percent. But states are unwinding that temporary coverage, and the uninsured rate has probably increased in recent months.

The increasing cost of living added to the challenge last year. The poverty threshold, which is based on the cost of essential items like food and housing, rose sharply: A family of four living in a rental home was considered poor under the supplemental measure if the family’s income was less than $34,518 in 2022, up from $31,453 in 2021.

Higher prices didn’t just hit the poor. Median household income, adjusted for inflation, fell 2.3 percent in 2022, to $74,580, as the fastest inflation since 1981 overwhelmed the impact of increased employment and rising wages.

“People are working hard,” said Margaret O’Conor, who runs Common Pantry, a small food bank in Chicago. “They’re just not making ends meet, the cost of living is too much.” Rent in particular has soaked up a lot of people’s extra earnings.

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