The country’s poverty rate increased to 11.7% in November from 9.6% in June as the coronavirus pandemic pummeled the economy, CBS News reports.
Over a six-month period, about 8 million Americans found themselves in poverty. The 2.4 percentage point jump from June to November is the biggest one-year bump in the 60 years that the government has been keeping track of numbers, according to new research released by three universities.
James X. Sullivan, a professor of economics at Notre Dame, and Bruce D. Meyer, an expert in poverty and inequality and professor at the University of Chicago's Harris School of Public Policy, are tracking data on a nearly real-time dashboard that logs the economic impact of COVID-19. The study also included research from economist Jeehoon Han of China's Zhejiang University.
According to their research, poverty declined at the beginning of the pandemic due to federal stimulus payments, boosted unemployment benefits, small-business loans, and other aid. But the lack of additional aid has caused the number to rise since June.
As the economy starts to recover from the 14.7% unemployment peak in April, the findings show that millions of people fell into poverty, which is defined as $26,200 for a family of four.
To track current poverty levels, professors used Census data and a question about monthly household incomes.
"We realized when the pandemic hit there was all of a sudden an urgency to what's happening to poverty right now, and there was a pretty reasonable way to measure that," Sullivan told CBS MoneyWatch.
He said the federal benefits were greater than the coronavirus-induced loss in earnings, which contributed to a decrease in poverty.
"Even though unemployment rates were rising and households lost a primary source of income, at least in the short term the stimulus households received exceeded what they lost. Twelve hundred dollars is a pretty big bonus for someone near the poverty line," Sullivan added, referring to the $1,200 stimulus payments provided to more than 160 million Americans.
But once the aid expired, poverty began to rise. "The CARES Act and additional government relief went a long way to staving off a rise in poverty, but those benefits have expired or will soon expire, so it's not surprising we see poverty creeping up again," Sullivan said.
Meyer said there is likely another 5 million in addition to the reported 10 million unemployed Americans who are still looking for jobs.
"A lot of people have left the labor force, so, while officially about 10 million Americans are unemployed, there's another 5 million people that have left the labor market and are still looking for jobs," Meyer said.
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