Stimulus only thing that kept millions of Americans out of poverty: study

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By , Audacy

If the U.S. had not distributed $400 billion in stimulus payments during the COVID-19 pandemic, the supplemental poverty rate would have gone up by nearly 4 percentage points, according to the U.S. Census Bureau.

A Supplemental Poverty Measure report released Tuesday shows that the two rounds of stimulus payments helped lift 11.7 million people out of poverty in last year – around the same size as the entire population of Ohio. Included in this figure are: 3.2 million children under 18, 6.4 million adults between 18 and 64 and 2.1 million people over 65.

Stimulus payments significantly decreased the number of children experiencing poverty across several race and Hispanic origin groups, said the bureau.

Poverty rates for Black children dropped by 6.8 percentage points which is equal to 756,000 Black children lifted out of poverty by stimulus payments. The Hispanic child poverty rate fell by 6.8 percentage points, representing 1.3 million Hispanic children. Another 1 million white, non-Hispanic children and 153,000 Asian children were lifted out of poverty by stimulus payments.

The U.S. Census Bureau publishes the Supplemental Poverty Measure an alternative to the official poverty measure. Unlike the official measure, it incorporates the value of noncash government transfers, taxes and necessary expenses into the resources a family has available to meet its basic needs, according to the Census Bureau.

In last year’s report, each of these elements impacted the number of people in poverty in addition to stimulus payments, which were included as resources. Without the payments, the supplemental poverty rate would have increased by approximately 3.6 percentage points.

According to the Census Bureau, the widespread impact of stimulus payments – which were distributed to people both above and below the poverty line – can be observed by examining income-to-poverty ratios. This type of ratio represents how much income a household receives in relation to its poverty level.

Analysis of these ratios shows that stimulus payments “significantly reduced the proportion of people in the lowest income-to-poverty ratio category,” by 1.2 percentage points, said the bureau. It also reduced the proportion of individuals with resources between 50 to 99 percent of the poverty threshold by 2.4 percentage points.

Most individuals lifted out of poverty were between 18 and 64, including 2.6 million white and 1.3 million Black individuals. With the stimulus payments, even more individuals fall into higher income-to-poverty ratio categories.

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