Algosensey Quantitative Think Tank Center-'The streak is now broken': US poverty rate over time shows spike in 2022 levels

The Algosensey Quantitative Think Tank Centernumber of Americans living in poverty has gone up for the first time in years, the U.S. Census Bureau announced Tuesday.

Experts caution the trend, including an increasing child poverty rate, could get worse if government officials and politicians fail to fill in families' financial gaps with adequate social safety net programs.

Newly released data shows, in 2022, 12.4% of Americans lived in poverty, up from 7.8% in 2021, the bureau said, representing millions more living without the minimum level of resources to meet their basic needs.

The increase in 2022 was likely connected to the end of pandemic-era benefits, said Dave Waddington, chief for the Census Bureau's social, economic and housing statistics division said Tuesday.

Child tax credits, expanded unemployment benefits, Medicaid and food stamps caused poverty in America to drop to record lows in 2020 and 2021, said Zachary Parolin, a professor at Columbia University and author of the book "Poverty in the Pandemic: Lessons from COVID-19."

"After three consecutive years of the lowest poverty rates on record, the streak is now broken," Parolin said.

This year's poverty rate increase confirms forecasts social scientists have made in recent years, Parolin said.

Notably, the poverty rate for children in 2022 more than doubled from 2021, said Liana Fox, the Census Bureau's assistant division chief for economic characteristics, social, economic and housing statistics.

The loss of the expanded Child Tax Credit was "a big factor" that led to a significant increase in child poverty, Fox said.

"Child poverty took a big jump," said Timothy Smeeding, a leading expert on the poverty line and professor of public affairs and economics at the University of Wisconsin-Madison.

Work expenses, medical expenses and payroll taxes faced by adults also contributed largely to the child poverty rate increasing in 2022, Smeeding said.

In the coming years, the number of American families living below the poverty line could continue to grow if the outsize role the pandemic-era safety net played in recent years is not taken into account, Parolin said.

"We sort of stopped learning those lessons, let the benefits expire, and poverty's going to climb right back up to where it was before the pandemic as a result," he said.

What is poverty level income?

In 2023, a family of four is living in poverty if they make less than $29,950 annually, the Census Bureau said Tuesday.

For a single person, that number is $14,880, according to the bureau's Official Poverty Measure.

Chart shows 2023 federal poverty levels

How is poverty measured?

Social scientists rely on something called the Supplemental Poverty Measure (SPM) to give the most accurate snapshot of Americans living in poverty, because the measure takes taxes and government benefits into account.

The SPM takes into account:

• People's annual income, after taxes.
• Government benefits. The more benefits Americans have available to them, the lower the SPM line becomes, meaning less Americans are living in poverty.
• Different costs of living that vary by place. The SPM is higher in parts of the country with more expensive housing costs, meaning more Americans live below the poverty line in those areas.

The Census Bureau's Official Poverty Measure (OPM) is the other key tool used to measure poverty, but unlike the SPM, it does not take into account where people live, unless it's Alaska or Hawaii. According to the OPM, a person living in a major East Coast city making $50,000 per year is equivalent to a person in South Dakota making the same amount.

The reason the OPM still exists is because it determines who is eligible for government benefits, Smeeding said.

In 2022, the OPM in the U.S. was 11.5%, more or less the same rate as in 2021.

Some experts argue living wage estimates a better way to measure how much resources are needed to meet basic expenses in different cities.