What Census Poverty Estimates May Miss

[Celerity]

Pandemic unemployment programs are significantly underreported, giving a misimpression about their effectiveness.

https://prospect.org/economy/2023-09-20-what-census-poverty-estimates-may-miss/



Last week, the Census Bureau released new data showing that poverty spiked in 2022 following the expiration of prominent pandemic programs. The supplemental poverty rate—a measure that integrates taxes paid, cash and in-kind benefits received, and basic costs like medical expenses—rose from a record low of 7.8 percent in the prior year up to 12.4 percent. All the progress made in reducing poverty over the previous several years was officially confirmed undone.

In particular, the increase in child poverty due to the expired 2021 Child Tax Credit expansion drove media reports, leading to strong responses from lawmakers. Members of Congress and the Biden administration correctly identified the need to make the CTC fully refundable again (i.e., guarantee the full credit amount to children regardless of their household income level). But missing from the conversation, notably, was just how effective the pandemic unemployment benefit programs were at preventing poverty.

For much of 2021, unemployment insurance (UI) benefit eligibility was expanded to more adequately cover gig workers, self-employed individuals, and those refusing hazardous work conditions. Claimants also saw their weekly benefit sizes topped up by an additional $300, down from a $600 boost in 2020 at the height of the pandemic but still significant (and much more than the expanded CTC). Well over ten million claimants received these benefits in 2021. One might expect the expanded UI in 2021 to have a greater impact on poverty than the expanded CTC, given that several hundred billion dollars in UI benefits were distributed to workers who would have otherwise seen dramatic drops in their income.



But the Census numbers show that the pandemic unemployment insurance benefits produced a smaller reduction in poverty. The Census Bureau found that stimulus payments and the expanded CTC prevented 8.9 million and 5.3 million people, respectively, from falling into poverty in 2021. Unemployment insurance, in contrast, kept only 2.3 million people out of poverty, under half of the CTC’s determined impact. These Census estimates may understate the full effect of unemployment insurance. The reason is technical: The Census Bureau may be undercounting the pandemic benefits sent to Americans.

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