The Story
The annual check in on Americans’ finances is in.
Go on.
Yesterday, the US Census Bureau delivered its 2020 review of income and poverty in the US. (Note: Last year, the average poverty threshold for a family of four was about $26,000. It jumps down to around $13,000 for a single individual.) Early last year, America lost 22 million jobs as the pandemic rattled and closed entire industries. And saw a record high of unemployment applications (over 6 million in one week). Now, the gov’s providing a clearer picture of just how big of an impact the pandemic and gov aid has had on Americans’ wallets.
Good or bad?
Both. The US poverty rate rose to 11% last year. That’s more than 37 million people struggling to make ends meet. (For reference, that’s about 3 million more Americans than 2019.) It marked the first time poverty increased, instead of a steady decrease like the last five years. But once you factor in the five relief bills under then-President Trump, poverty actually dropped to just over 9% – the lowest on record. Stimulus checks and weekly federal unemployment boost kept over 17 million people from poverty. But it’s important to note that Black and Hispanic Americans reportedly experienced more poverty regardless of gov aid.
What are people saying?
Experts say this shows that gov aid helps. Democrats hope this report highlights the importance of passing the $3.5 trillion spending bill that could include child care, parental leave, and an extended child tax credit. Last month, Congress passed the blueprint for the spending bill along party lines. But conservatives have remained wary about high gov spending, saying it increases the federal debt and keeps people from working.
theSkimm
The pandemic made it clear that millions of Americans were living paycheck to paycheck. Now as the country’s economy faces a shaky recovery, it’ll be up to lawmakers to decide how to best carry Americans out of a once-in-a-century pandemic.
PS: If you’ve lost income, here’s theSkimm on how to make a new financial plan.
