[The most comprehensive study yet of the federal response to the
pandemic shows huge but temporary benefits for the poor — and helps
frame a larger debate over the role of government.]
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PANDEMIC AID PROGRAMS SPUR A RECORD DROP IN POVERTY  
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Jason DeParle
July 28, 2021
New York Times
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_ The most comprehensive study yet of the federal response to the
pandemic shows huge but temporary benefits for the poor — and helps
frame a larger debate over the role of government. _

"End Child Poverty - Keep The Promise" by RMLondon`, licensed under
CC BY 2.0

 

WASHINGTON — The huge increase in government aid prompted by the
coronavirus pandemic will cut poverty nearly in half this year from
prepandemic levels and push the share of Americans in poverty to the
lowest level on record, according to the most comprehensive analysis
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of a vast but temporary expansion of the safety net.

The number of poor Americans is expected to fall by nearly 20 million
from 2018 levels, a decline of almost 45 percent. The country has
never cut poverty so much in such a short period of time, and the
development is especially notable since it defies economic headwinds
— the economy has nearly seven million fewer jobs than it did before
the pandemic.

The extraordinary reduction in poverty has come at extraordinary cost,
with annual spending on major programs projected to rise fourfold to
more than $1 trillion. Yet without further expensive new measures,
millions of families may find the escape from poverty brief. The three
programs that cut poverty most — stimulus checks, increased food
stamps and expanded unemployment insurance — have ended or are
scheduled to soon revert to their prepandemic size.

While poverty has fallen most among children, its retreat is
remarkably broad: It has dropped among Americans who are white, Black,
Latino and Asian, and among Americans of every age group and residents
of every state.

Source: The Urban Institute

“These are really large reductions in poverty — the largest
short-term reductions we’ve seen,” said Laura Wheaton of the Urban
Institute, who produced the estimate with her colleagues Linda
Giannarelli and Ilham Dehry. The institute’s simulation model is
widely used by government agencies. The New York Times requested the
analysis, which expanded on an earlier projection.

The finding — that poverty plunged amid hard times at huge fiscal
costs — comes at a moment of sharp debate about the future of the
safety net.

The Biden administration has started making monthly payments to most
families with children through an expansion of the child tax credit.
Democrats want to make the yearlong effort permanent, which would
reduce child poverty on a continuing basis by giving their families an
income guarantee.

Progressives said the new numbers vindicated their contention that
poverty levels reflected political choices and government programs
could reduce economic need.

“Wow — these are stunning findings,” said Bob Greenstein, a
longtime proponent of safety net programs who is now at the Brookings
Institution. “The policy response since the start of the pandemic
goes beyond anything we’ve ever done, and the antipoverty effect
dwarfs what most of us thought was possible.”

Conservatives say that pandemic-era spending is unsustainable and
would harm the poor in the long run, arguing that unconditional aid
discourages work and marriage. The child tax credit offers families up
to $300 per child a month whether or not parents have jobs, which
critics call a return to failed welfare policies.

“There’s no doubt that by shoveling trillions of dollars to the
poor, you can reduce poverty,” said Robert Rector of the Heritage
Foundation. “But that’s not efficient and it’s not good for the
poor because it produces social marginalization. You want policies
that encourage work and marriage, not undermine it.”

Poverty rates had reached new lows before the pandemic, Mr. Rector
added, under policies meant to discourage welfare and promote work.

To understand how large the recent aid expansion has been, consider
the experience of Kathryn Goodwin, a single mother of five in St.
Charles, Mo., who managed a group of trailer parks before the pandemic
eliminated her $33,000 job.

When she was working, Ms. Goodwin received food stamps, tax credits
and aid for a disabled child.

That prepandemic aid raised her income to $52,000 a year.

The local poverty line is about $34,000.

Without the pandemic-era expansions — passed in three rounds under
both the Trump and Biden administrations — Ms. Goodwin’s job loss
would have caused her income to plunge to about $29,000 (in jobless
benefits, food stamps and other aid), leaving her officially poor.

Instead, her income rose above its prepandemic level, though she has
not worked for a year. She received about $25,000 in unemployment
benefits (about three times what she would have received before the
pandemic) and $12,000 in stimulus checks. With increased food stamp
benefits and other help, her income grew to $67,000 — almost 30
percent more than when she had a job.

“Without that help, I literally don’t know how I would have
survived,” she said. “We would have been homeless.”

Still, Ms. Goodwin, 29, has mixed feelings about large payments with
no stipulations.

“In my case, yes, it was very beneficial,” she said. But she said
that other people she knew bought big TVs and her former boyfriend
bought drugs. “All this free money enabled him to be a worse addict
than he already was,” she said. “Why should taxpayers pay for
that?”

The Urban Institute’s projections show poverty falling to 7.7
percent this year from 13.9 percent in 2018. That decline, 45 percent,
is nearly three times the previous three-year record, according
to historical estimates by researchers at Columbia University
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projected drop in child poverty, to 5.6 from 14.2 percent, amounts to
a decline of 61 percent. That exceeds the previous 50 years combined,
the Columbia figures show.

Sources: Columbia University Center on Poverty and Social Policy
(analysis of historical data); the Urban Institute (2021 data)

In addition to there being nearly 20 million fewer people in poverty,
the institute projects about 10 million fewer in “near poverty,”
with incomes of 100 to 150 percent of the poverty line. Under the
yardstick the Urban Institute used (the government’s Supplemental
Poverty Measure), the poverty line for two adults and two children
with typical housing costs is about $30,000.

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“The decline in ‘near poverty’ is significant because families
in that income range, like people in poverty, suffer high rates of
food insecurity and other hardships,” said Elaine Waxman, an Urban
Institute researcher.

Poverty fell across racial and ethnic groups but most for people who
are Black and Latino, meaning the gap with white Americans narrowed.
The Rev. Starsky Wilson, the president of the Children’s Defense
Fund, credited the racial protests of the past year for prompting
lawmakers to act. “It’s no coincidence that the effort at
mobilizing resulted in investments that reduced poverty and narrowed
disparities,” he said.

Poverty fell less among Asian Americans, leaving them more likely than
Black Americans to be poor. The institute found that was partly
because they tended to live in more expensive areas.

Jessica Moore of St. Louis said the expanded aid helped her make a
fresh start.

A single mother of three, Ms. Moore, 24, lost work as a banquet server
at the pandemic’s start but received enough in unemployment
insurance and stimulus checks to buy a car and enroll in community
college. She is studying to become an emergency medical technician,
which promises to raise her earnings 50 percent.

“When you lose your job, you don’t expect benefits that are more
than you were making,” she said. “It was a pure blessing.”

Ms. Goodwin preparing medication for her daughter Aliyah and her son
Xavier every morning.

With increased food stamp benefits and other help, the family’s
income temporarily grew almost 30 percent even though Ms. Goodwin was
not working.

Still, Ms. Goodwin has mixed feelings about large government payments
with no stipulations, fearing some people abuse the aid.

Payments also went to people who kept their jobs, which helps explain
why “near poverty” fell. The beneficiaries included John Asher of
Indianapolis, who once served prison time for selling drugs but is now
sober and earning $500 a week as a maintenance man. With $3,200 in
stimulus checks, Mr. Asher, 49, was able to leave a boardinghouse,
rent an apartment and take custody of an autistic son, who he feared
would go to foster care.

But he said he distrusted “the crooked government” and urged poor
people to help themselves. “If you want to change your life, you
have to get up and do something — not sit home and get free
money,” he said.

Leah Burgess, who also kept her job, drew the opposite lesson from the
help she received. A part-time chaplain at a school outside the
District of Columbia, Ms. Burgess, 43, is studying for two master’s
degrees at Howard University. With three children, she and her
husband, who was also a student, received about $18,000 in stimulus
checks and expanded food stamps.

The aid helped them eat better and worry less, said Ms. Burgess, who
called the support a foundation for a more just society. “If our
resources in a pandemic could change millions of people’s lives,
then what’s stopping us from continuing to do that?” she said.

The institute projected spending on core programs would more than
double, to about $13,900 per family from $5,700 in 2018. The stimulus
checks removed more than 12 million people from poverty. Food stamps
ended poverty for nearly eight million people and unemployment aid for
nearly seven million.

Critics said the aid was poorly devised, noting that many people
received more from unemployment benefits than they had earned on the
job.

“We spent like we’ve never spent before and we reduced hardship
for most people quite dramatically,” said Bruce D. Meyer, an
economist at the University of Chicago. “But this came at a very
high and unnecessary cost.”

While Democrats and Republicans remain divided over future safety net
spending, a bipartisan group of senators agreed Wednesday on about
$550 billion in new spending for roads, bridges and physical
infrastructure projects, and the Senate advanced the package
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an initial vote.

Measuring poverty is contentious, and some conservatives accuse the
left of exaggerating the recent poverty reduction to justify more
spending. They say the government’s methodology undercounts the
benefits people receive and overstates what it takes to meet basic
needs. The Urban Institute modified the government’s approach to
correct for undercounting, but Ms. Wheaton said methodological issues
did not change the conclusion that poverty fell since “we are
applying a consistent measure to both years.”

If there are biases in the institute’s methodology, they lean in
offsetting directions. Using a 2018 baseline may modestly overstate
the recent poverty reduction, since poverty was lower when the virus
hit. But the study, which was funded by the Robert Wood Johnson
Foundation, also understated the poverty reduction by omitting several
large new programs, including $45 billion in rental aid.

Robert Doar, the president of the conservative American Enterprise
Institute, warned that the poverty numbers were being used to attack a
successful social compact established a quarter-century ago with the
overhaul of the welfare system. Under a new system of time limits and
work requirements, payments to poor people without jobs fell, but
subsidies for low-wage workers grew. Mr. Doar noted that while
liberals warned child poverty would grow, by 2019 it had hit a
prepandemic low.

“We required work, we rewarded work, and poverty rates were lower
than had ever been,” he said. “The Democrats want to ignore all
that and just send everybody a check.”

The evidence of falling poverty in 2021 may seem at odds with reports
of increased hunger and other pandemic-era hardships. But the trends
can coincide, as Ms. Goodwin’s experience shows. That is because
poverty is based on annual income, and help has fluctuated greatly
from month to month as a result of policy changes and administrative
bottlenecks. Many families have swung between moments of surplus and
desperation.

After six years on the job, Ms. Goodwin was shocked to find herself
laid off (“that was really a slap in the face”) and distraught
when her request for unemployment benefits went unanswered for a
month. Fearing she might lose the children to foster care, she drove
them 800 miles to Niagara Falls with thoughts of them all jumping in.

“Mentally, I was not in a good place,” Ms. Goodwin said.

A biblical verse on a mural (“Love one another, as I have loved
you”) reminded her of how precious their lives together were.

She drove back to Missouri, sought help for depression and joined a
support group at a Pentecostal church.

Since then, her jobless benefits swung from a high of $920 a week
(much more than she had received on the job) to a low of $320 (much
less) as federal policy changed. She lost food stamps for several
weeks and fed the children smaller portions. She waited months for
stimulus aid after the payment went to a closed bank account.

“It was all very unreliable,” she said.

A low point came last fall, when her jobless benefits bottomed out.
The trailer park where she once had worked evicted her.

Ms. Goodwin said she had been looking for work but it was harder than
the “Help Wanted” signs would suggest. Fast-food chains say she is
overqualified, and the pandemic-era closure of child care centers
complicates her logistics. (She previously worked at home.) She
started a sideline making church T-shirts and is an apprentice at a
nail salon, where she hopes to get hired.

At once a beneficiary and critic of aid, Ms. Goodwin said the safety
net, however imperfect, had lived up to its name. “It enabled us to
stay out of poverty — that’s absolutely safety,” she said.

 

_Jason DeParle, a reporter in the Washington bureau, has written
extensively about poverty, class, and immigration. He is a two-time
finalist for the Pulitzer Prize and the author of “A Good Provider
is One Who Leaves: One Family and Migration in the 21st Century.” _

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