September 26, 2020

U.S. Poverty Hit a Record Low Before the Pandemic Recession

“The initial consensus when the law passed was the mandate was a critical feature,” said Benjamin Sommers, an assistant professor of health policy and economics at Harvard. “Over the years of implementation, the studies that have come out have been less convincing in terms of its importance.”

The census figures showed a slight increase in Americans receiving health coverage at work and a decrease in those buying their own policies, suggesting that a stronger labor market could be driving the better coverage numbers. Enrollment in Medicaid, the program that covers low-income Americans, declined slightly. That could reflect more Americans gaining coverage at work and many states tightening their eligibility rules.

The report highlights how strong the job market and economy were ahead of the pandemic, following a record-long expansion that began in 2009. Yet it underscores how, despite those gains, many families remained vulnerable to such a major shock.

Unemployment was hovering at around 3.5 percent before the crisis took hold, the lowest in 50 years, and wages were steadily rising. Yet at the end of 2019, three in 10 adults said they could not cover three months’ worth of expenses with savings or borrowing in the case of a job loss, according to a Federal Reserve survey.

Minority groups experienced bigger declines in poverty in 2019, the census report showed, but also have much higher poverty rates. The poverty rate for whites dropped 1 percentage point to 9.1 percent; for Asians it was down 2.8 percentage points to 7.3 percent. Black poverty dropped 2 points to 18.8 percent, and Hispanic poverty decreased by 1.8 percentage points to 15.7 percent.

“The very groups who need a stronger economy to pull them back are the ones getting disproportionately hit by the downturn we’re in now,” Ms. Shierholz said.

The figures suggest that many families were still on edge as state and local lockdowns prompted the sharpest job losses on record, pushing the unemployment rate up to 14.7 percent in April. While unemployment has declined to 8.4 percent as employers call back their temporarily furloughed workers, that left about 10 million fewer people employed in August than in February.

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