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Poverty increased in 2020 amid pandemic even as stimulus payments helped some 11.7 million Americans avoid it

By Tami Luhby, CNN

The nation’s poverty rate rose to 11.4 percent last year, but the first two rounds of federal stimulus payments helped keep 11.7 million Americans out of poverty, Census Bureau data shows published Tuesday.

The payments, a key part of the unprecedented federal response to the economic devastation caused by the coronavirus pandemic, resulted in an alternative measure of poverty falling to 9.1% in 2020, the Census Bureau said.

Last year, for the first time, the supplementary poverty measure, which began in 2009, was below the official rate. This measure takes into account certain non-monetary government aid, taxes and necessary expenses.

Without the stimulus payments, the alternative measure would have increased by about 3.6 percentage points, the census said. In 2019, the additional rate was 11.8%.

The official poverty rate increased in 2020 from an all-time low of 10.5% a year earlier. This was the first increase in poverty after five years of decline. Some 37.2 million people lived in poverty in 2020, an increase of 3.3 million from the previous year.

Economic chaos

The pandemic shook the US economy early last year, cost millions of Americans their jobs as states have forced non-essential businesses to shut down and people to stay at home in an attempt to stop the spread of the virus. Although conditions have improved significantly since then, the economy remains more than 5 million fewer jobs from where he was in February 2020.

However, an unprecedented response from the federal government spared millions of people from the worst ravages of the economic downturn. Congress passed three major relief packages, sending $ 3,200 in stimulus payments in 2020 and 2021, expand the unemployment benefit system, increase food stamps and provide funds for low-income schoolchildren to buy food, defer student loan payments, imposing a moratorium on evictions, send relief funds to state and local governments and provide help to businesses.

The massive expansion of unemployment benefits lifted 5.5 million people out of poverty. Lawmakers increased both the number of people eligible for unemployment benefits and the generosity of benefits last year.

RELATED: More Children Faced Food Insecurity Last Year During Pandemic

Median income has fallen

Median household income fell to $ 67,500 last year, down 2.9% from 2019, which was the highest since 1967, the first year of record keeping, according to the Census Bureau. This is the first statistically significant drop in median income since 2011.

The number of people working full-time, full-year has declined by around 13.7 million people, the largest year-over-year decline since the agency began collecting comparable data in 1967 .

Food insecurity

Federal efforts to support those in need were successful in containing hunger last year for Americans as a whole, according to a recent report from the US Department of Agriculture.

Overall, the share of households struggling with food insecurity remained the same in 2020 as the previous year at 10.5%, or 13.8 million households, according to the report, which is released annually.

However, food insecurity for families with children increased last year, despite the federal response. Some 14.8%, or 5.6 million households, were in this situation last year, up from 13.6% in 2019.

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