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Published: Friday, September 25th, 2020 @ 11:34 am
By: John Locke Foundation ( More Entries )

Publisher's Note: This post appears here courtesy of the John Locke Foundation. The author of this post is Mitch Kokai.

Scott Winship writes for the Spotlight on Poverty website about the significance of new poverty numbers.

The new poverty estimates indicate lower levels of hardship in 2019 than ever before, a fact that seemed to surprise even the Census Bureau. The pandemic caused some measurement problems that may have produced a slightly too-rosy picture, but even those are not enough to change the conclusion.

The most important declines have come among children. According to the official poverty rate, 14.4 percent of children were poor last year. You have to go back to 1973 to find a poverty rate that low, when single parenthood was much rarer. The increase in single parenthood has made it more and more difficult to reduce poverty. Indeed, last year's poverty rates were at 60-year lows for both children of married parents and children in single-parent households. (Published poverty rates go back only to 1959, but these are almost surely all-time lows.)

If those conclusions are surprising, it will be even more surprising to hear that the official poverty measure understates the extent to which hardship has declined over time. Two careful studies have poverty falling fairly steadily since the early 1980s, which itself involved a temporary interruption of an earlier decline. Those studies improve on the official poverty measure by accounting for income and inflation measurement issues, falling taxes, rising noncash benefits, and increased cohabitation.

The long-term poverty trend has to be regarded as cause for celebration. Of course, 2019 feels like a long time ago thanks to the novel coronavirus. But — surprise again — the evidence suggests that poverty actually continued to fall in the initial months after COVID-19 forced us out of workplaces, schools, and the public square. That decline happened despite unemployment rising to levels not seen since the Great Depression. How is that possible? The CARES Act, passed by Congress and signed into law in March, bolstered the safety net. ...

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