Incomes were up and poverty was down across America in 2019 — and then COVID-19 hit
Encouraging as it seems, the new Census report is a pretty picture of something that no longer exists.
Incomes were up and poverty was down in stunning numbers across the United States in 2019, according to a key annual federal report released Tuesday.
But the events of 2020 overshadowed many of the gains America enjoyed, as the pandemic dismantled a once-robust economy that was in its 11th year of recovery from the Great Recession.
The 2019 U.S. median household income had reached $68,700, an increase of 6.8% from the 2018 level of $64,324, the Census Bureau reported in its Current Population Survey.
At the same time, the number of people living in poverty in the nation fell from about 38 million to 34 million, the overall rate decreasing 1.3 percentage points from 11.8% to 10.5% — the lowest figure since records started being kept in 1959, the report showed. Low unemployment amid a powerful job market was a key, economists say.
As it happens, some officials question the poverty rate, and analysts are looking into it. The poverty threshold for a family of four in 2019 was $26,172 annually.
Encouraging as it seems, the new Census report is a pretty picture of something that no longer exists. Once more, it seems, 2020 has struck, reversing progress and forestalling hope.
“The year 2019 is in the rearview mirror now,” said Elizabeth Lower-Basch, a director at the Center for Law and Social Policy, an antipoverty nonprofit in Washington. “We obviously hit bumpy terrain. We have to pay more attention to where we are than where we were.”
Social scientists were quick to point out Tuesday that as encouraging as the low 2019 poverty rate is, there might be accuracy problems with it attributable to the pandemic.
While people think the Census Bureau’s only job is to count Americans every 10 years, it has other tasks, including asking questions every month of every year about topics like employment. Each February, March, and April, the bureau adds questions about income and poverty, asking individuals about their finances from the previous year. Often, the bureau sends out employees to talk to Americans face-to-face.
Obviously, questioning Americans in person during March and April 2020 was made impossible by the coronavirus.
Questioners tried to carry on from safer spots through phone calls, emails, and texts. The result was that the March response rate was 73%, about 10% or more lower than normal, officials said.
Typically, it’s harder to reach those in poverty than better-off Americans. Low-income people work multiple jobs, they may live doubled up with others, and many don’t have internet access, said economist James Ziliak of the University of Kentucky.
“Normally, 40% of the poor don’t respond at all,” he said. Layer in the coronavirus, which struck low-income people at disproportionately higher rates, and it’s not hard to see why getting in touch during the pandemic was problematic.
As a result, “that low 10.5% poverty rate could be pretty far off — too low,” Ziliak said. Some estimate the real poverty number was higher by one million or even two million people.
That COVID-19 reversed economic improvements from 2019 is a given.
In 2020, the country reached the deepest recession since the 1930s, with unemployment peaking in April at 14.7%, according to the nonprofit Center on Budget and Policy Priorities in Washington.
Ironically, the Census Bureau put out another survey, called Household Pulse, that was completed after the Current Population Survey. Centered on 2020, it shows a far more damaged country: Around 45% of households contacted said that someone in the home lost income since March.
So, does the 2019 survey, long superseded by the events of a wretched year, have any value?
Absolutely, said Deborah Weinstein, executive director of the Coalition on Human Needs, in Washington, a nonprofit alliance of national organizations focused on low-income Americans.
The survey studied the number of uninsured Americans and spotted what might be an alarming trend: The number of uninsured rose from 8.9% of the population in 2018 to 9.2% in 2019.
“That shows you that people were living with hard times even in the midst of good times,” Weinstein said.
Another lesson from the 2019 survey comes from Arloc Sherman, a vice president of the Center on Budget and Policy Priorities.
“In 2019, we had near full employment,” which helped raise incomes and lower poverty. In 2020, we face potentially catastrophic poverty levels. That’s why, he said, “we need to get money into the hands of low-income people," who spend dispersed government money more quickly than upper-income people. "That gets the economy moving.”
Sherman also said it’s important to dispatch more money to the states to improve moribund economies.
In another benchmark analyzed by the Census survey, the Supplemental Poverty Measure decreased from 12.8% in 2018 to 11.7% in 2019. Unlike the official poverty rate, the measure calculates poverty by taking into account a family’s major expenses and balances them against any federal benefits it may receive.
The Census survey depicted stark differences between the simpler time of 2019 and how we’re currently living under COVID-19, said Lower-Basch of the Center for Law and Social Policy:
“We now cope with the fear it could take another 10 or so years for us to get back to where we were.”