New Census data show government relief efforts helped keep millions out of poverty

RALEIGH (Sept. 14, 2021) — New Census data on poverty and income show the power of public investments to address poverty during the COVID-19 pandemic. Economic losses and hardship stemming from COVID-19 and its new variants continue to harm North Carolina communities — particularly North Carolinians of color and those with low incomes. The need for strong public investments that grow the economy, protect families, and reduce racial and economic inequalities remain as critical today as they were a year ago.

According to new national data from the U.S. Census Bureau’s Current Population Survey, the median household income fell by 2.9 percent in 2020, to roughly $67,500. This decrease, the first since 2011, was caused by the COVID-19 recession, one of the deepest and the most unequal in US history. The official poverty rate in 2020 was 11.4 percent, an increase of 1 percentage point since 2019. However, the Supplemental Poverty Rate, which provides a more comprehensive picture than the official poverty rate by including non-cash benefits, stimulus payments, and taxes, fell by 2.6 percentage points to 9.1 percent in 2020.

The fact that poverty fell in the face of an unprecedented economic downturn is a testament to the critical role of the federal government’s historic relief efforts. In particular, expanded unemployment insurance, nutrition assistance, paid sick leave, and stimulus payments — made possible primarily through the Families First Coronavirus Response Act, the Coronavirus Aid, Relief, and Economic Security (CARES) Act — were crucial for preventing millions of people from living in poverty in 2020. Unemployment insurance benefits prevented 5.5 million people from falling into poverty, while stimulus payments moved 11.7 million people out of poverty. Without federal stimulus payments, the Supplemental Poverty Rate would have been 12.7 percent for all people in 2020, rather than 9.1 percent.

“These data show the power of public policy to address poverty when we invest directly in people and families. We know that the COVID-19 recession created historic income losses, and that North Carolinians are not out of the dark yet, particularly given the impacts of the delta variant,” said Logan Rockefeller Harris, Senior Policy Analyst with the NC Budget & Tax Center. “Our federal and state policymakers must build on these investments to make systemic changes that don’t just lift more people out of poverty but support thriving families and equitable communities, with a focus on Black, Latino, Indigenous, and immigrant communities that have been hit hardest by COVID-19.”

In addition to the national data that was just released, the Census Bureau’s Household Pulse Survey continues to provide real time data on hardship in North Carolina. Among adults in North Carolina in the month of August 2021:

• 29 percent had difficulty covering usual household expenses
• 22 percent of those living in rental housing were not caught up on rent payments
• 12 percent of those living with children reported that children weren’t eating enough because their household couldn’t afford enough food

“The pandemic is not over. Too many North Carolinians still face difficult choices about how to put food on the table, pay rent, and meet the needs of their families as COVID cases surge,” said Heba Atwa, Senior Policy Advocate with the NC Budget & Tax Center. “Our state policymakers still have an opportunity to create a budget that expands safety-net programs that are proven to alleviate hardship and get money directly to the families that need it.”

In the months ahead, federal and state lawmakers can put forward meaningful and lasting policy solutions:

Federal: Lawmakers have the opportunity to fundamentally improve North Carolinians’ lives and build a fairer, more equitable economy with the Build Back Better legislation currently under consideration in Congress. The NC Budget & Tax Center is urging North Carolina’s delegation to ensure the final bill strengthens the nation’s weak unemployment insurance system, closes the Medicaid coverage gap, invests in affordable housing, makes the full Child Tax Credit permanent for families with low or no earnings, and supports a path to citizenship for undocumented immigrants in our communities. The Build Back Better investments should be funded by closing loopholes that allow the wealthiest individuals and corporations to pay little or no federal income tax, and by strengthening IRS enforcement ensure those at the top pay what they owe.

State: Lawmakers must meet the demands of the moment by passing a state budget that paves the way to an antiracist economic recovery that extends to all people. North Carolina’s legislators must expand Medicaid and invest in affordable housing, child care, and equitable educational opportunities for everyone in our state. State legislators must ask the wealthiest corporations and families in North Carolina to pay their fair share in taxes for the well-being of all our communities.

The nonpartisan Budget & Tax Center is a project of the NC Justice Center, which works to eliminate poverty in North Carolina by ensuring every household in the state has access to the resources, services and fair treatment it needs to achieve economic security. 

FOR MORE INFORMATION, CONTACT Logan Rockefeller Harris, Senior Policy Analyst with the Budget & Tax Center, at 919-856-2153 or logan@ncjustice.org; or Mel Umbarger, Senior Communication Specialist, at mel@ncjustice.org.