Poverty in the United States showed very sharp increases in 2022 based on Census Bureau data on income, poverty and health insurance. With the “inflationary shock” of 2022 came median household income decline with an overall Supplemental Poverty Measures poverty rate increase.
According to the data, median household income declined by 2.3 percent despite the “benefits of a strong labor market (more hours worked and relatively fast nominal wage growth),” while Supplemental Poverty Measures (SPM) showed sharp increases as the overall poverty rate rose by 4.6 percentage points to 12.4 percent, Economic Policy Institute reported.
The data also showed that childhood poverty more than doubled from 5.2 percent to 12.4 percent.
Experts believe the driving factor for the sharp increase in poverty in the United States was due to policy change. Since Congress allow the pandemic-era expansions to the safety net to expire, notably the Child Tax Credit (CTC) expansions, it was particularly damaging to child poverty.
A sharp reduction in child poverty in 2020 and 2021 “engineered even in the face of a pandemic-damaged economy show the importance of policy decisions,” Economic Policy Institute said in a press release.
“If policymakers were willing to maintain the pandemic-era CTC expansions, a much smaller share of children would be living in poverty. More ambitious—but economically sustainable—expansions of our generally stingy welfare state could essentially eliminate poverty completely.”
Economic Policy Institute predicts that the current strong labor market and the inflationary shock of 2022 abated, there are reliable gains for 2023 and the future, which will increase income growth for the majority of working families.
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