On Tuesday, the U.S. Census Bureau released its annual report on the state of poverty in the United States. Every year, this is the biggest moment in poverty statistics as we get a snapshot of what poverty looked like in the previous year.
While statewide information is forthcoming, with the national numbers we can come away with some important takeaways.
Household incomes are down in 2022
Inflation took a bite out of household incomes as their real value dropped compared to 2021. The silver lining on this measure is that incomes were steady for Asian, Black, and Hispanic households, though they were still substantially lower for Black and Hispanic households than for non-Hispanic whites.
Inequality is down in 2022
For the first time since the Great Recession, the U.S. Gini coefficient, a measure of inequality across the income distribution, decreased in 2022. This could be because inflation pressures hit upper-income households harder than they hit lower-income households.
Poverty before counting benefits is steady
The Census Bureau estimates 38 million Americans lived in poverty in 2022, 12% of the total population. Neither of these numbers was substantially different from the 2021 numbers.
Black poverty dropped to a historic low
The official poverty rate for Black households dropped from 2021 to 2022. This was its lowest rate on record.
Poverty after counting benefits shot up
2021 was an important year because poverty after counting taxes and public benefits hit a record low. This was due to the expansion of the Child Tax Credit and other income supports put in place during the COVID-19 pandemic.
After Sen. Joe Manchin decided he would not support making the Child Tax Credit permanent, the program expired at the end of 2022. This led to the largest, single-year increase in poverty after counting benefits, a 4.6 percentage point increase.
Child poverty after counting benefits more than doubled
The decision to end the child tax credit expansion unsurprisingly fell hardest on children. Child poverty after counting taxing benefits lept from 5% in 2021 to 12% in 2022 largely due to the expiration of the child tax credit expansion.
So what can we do with this information? Policymakers at the state level have tools to fight poverty.
They can expand the earned income tax credit. The earned income tax credit is the largest anti-poverty program in the country after social security and Ohio has a state-level version of the credit. By expanding the amount of cash this gives to low-income working households, this could take a bite out of state-level poverty.
Lawmakers can ensure access to food assistance. The federal government gives states significant leeway to control eligibility for SNAP (formerly “food stamp”) assistance and eligibility for free or reduced breakfast and lunch programs in schools. Both of these are programs paid for by the federal government that keep millions across the country out of poverty. By allowing access to these programs, Ohio can help keep people out of poverty.
If lawmakers really want to tackle poverty, the way to do that would be through basic income. Programs like a negative income tax have been considered in the United States for half a century and were utilized during the pandemic. The most straightforward way to fight poverty is to provide people with income.
Poverty is a policy choice and one that can be made at the state level. Let us hope that someday policymakers will see it as a priority.
This story was originally published in the Ohio Capital Journal and republished here with permission.