During the Pandemic, Child Poverty Rate Plummeted

More than 5M people emerged from poverty thanks to enhanced child tax credit
By Jenn Gidman,  Newser Staff
Posted Sep 14, 2022 8:45 AM CDT
During the Pandemic, Child Poverty Rate Plummeted
Stock photo.   (Getty Images/eric1513)

In 1993, the US child poverty rate came in at almost 28%, but last year, it fell to just 5.2%—a "stunning stat" that equates to a more than 80% drop over those three decades, per Axios. According to Census Bureau data released Tuesday, the 2021 figure also nearly halved the 2020 rate of 9.7%. These numbers were arrived at using the agency's 13-year-old Supplemental Poverty Measure, which includes noncash government aid, needed expenses, and tax credits in its formula, reports CNN. But it was one particular tax credit—the child tax credit, which was enhanced for 2021—that played an especially major part in slashing the child poverty rate. As part of 2021's American Rescue Plan, families in that year received a larger-than-usual credit of $3,600 for each child younger than 6, and $3,000 for each child between the ages of 6 and 17.

About $93 billion was distributed to up to 36 million families across the country, according to the IRS. CNN notes that without the enhanced child-tax credit last year, the child poverty rate would've fallen only to 9.2% over the past year, not 5.2%. It wasn't good news across the board, according to the supplemental measure. Poverty among the elderly inched up to 10.7%, from 9.5%, and the 10% of households that bring in the least money saw their incomes fall 4.4%. We also won't likely see a repeat of the child poverty rate's low numbers this year, as the enhanced credit is no longer in effect. Meanwhile, other measurements, including the official poverty rate and real median household income, were not "statistically different" year-on-year.

But even this limited boost to kids and their families can have an indirect ripple effect, including lower crime rates and health care costs, as well as increased tax revenue, notes Axios, which adds that stimulus checks during the worst of COVID also helped drive down the child poverty rate. And even though the enhanced credit is kaput for now, other factors have also contributed to keeping the child poverty rate on the downswing over the long haul, including more single moms in the workforce, minimum wages going up in some states, and the expansion of government aid in the form of safety net programs, per the New York Times, which cites a new Child Trends report on the matter. "Fewer children growing up in poverty is good for the future," Renee Ryberg, co-author of the report, tells Axios. "It's as simple as that." (More poverty rate stories.)

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