By Lydia DePillis
The nation’s poverty rate rose last year even as incomes improved, the government reported earlier this week, reflecting higher prices and the expiration of the last pandemic relief programs.
The share of Americans living in poverty as defined by the Census Bureau’s “supplemental” measure, which takes into account a broader range of benefits and expenses than the official poverty rate, rose to 12.9% in 2023, from 12.4% in 2022. The median household income, adjusted for inflation, rose to $80,610, finally regaining its prepandemic level.
Poverty levels have risen anew in recent years after a wave of pandemic relief aid — and an exceptionally strong labor market that lifted the wages of many at the bottom of the pay spectrum — collided with the most rapid inflation in a generation.
Stimulus checks, extra unemployment insurance and expanded tax credits for low-income families cut child poverty in half in 2021, to the lowest rate since record keeping began, in 1967. But the expiration of those supports, along with the jump in prices for food and other necessities, reversed the gains in 2022.
“You need two kinds of strategies to keep poverty down: One is the economic strategy, and one is the investments in core programs and the safety net,” said Olivia Golden, interim executive director of the Center for Law and Social Policy, a progressive advocacy group. “To me, the idea that policies have high stakes in terms of the lives of families and their material hardship is very vivid as you look over the last few years.”
The income gains were particularly pronounced for low-wage households, rural households and men, with the gap between male and female earnings rising for the first time since 2003. Census officials say that may have been because of an increase in the labor force participation of Hispanic women, who tend to earn less.
Extra federal money for nutrition assistance and free school lunches also ran out in late 2022 and early 2023, leaving millions of families with more limited options at the grocery store. That had a particular impact on children; the poverty rate for people under 18 rose 1.3 percentage points, to 13.7%.
The most powerful anti-poverty program continues to be Social Security, which lifted 27.6 million people above the threshold; the poverty rate for people over 65 was stable at 14.2%.
How to measure poverty has always been disputed. Over the past few years, fluctuations in prices, policies and incomes have highlighted how methodology shapes the headline numbers.
For example, the factor most responsible for the increase in the supplemental rate was that the thresholds for poverty rose significantly, to $37,482 for a household with two parents and two children who live in an apartment, meaning that more people fall under the new line. The official poverty rate uses a different method for measuring inflation, resulting in a dip in 2023 rather than an increase.
Those thresholds, however, also change in relation to what median-income people are spending on certain goods, which went up a lot in 2021 and 2022.
“The thresholds are a very odd animal — they move the goal posts in very peculiar and very opaque ways,” said Bruce Meyer, a senior fellow at the right-leaning American Enterprise Institute. “So it’s not really a measure of, ‘Can you afford basic housing?’ It’s looking at what the average person spends.” A left-leaning think tank, the Center on Budget and Policy Priorities, also called the supplemental threshold jump a “temporary quirk.”
Other indicators offer evidence of increasing hardship. Credit reporting data shows more people behind on their credit card bills. Another survey, administered by the Agriculture Department, showed that the share of families who were unable to secure enough food at some point during the year rose in 2022 and 2023. The fluctuations in aid have been perhaps most visible at food banks, which serve as the first line of defense when families come up short.
In Ohio, a statewide network of food banks noticed that while visits sank in 2021 as people had enough cash and food stamps coming in to keep food on the table, they exploded in 2023 — rising 42% above 2019 levels — when the extra subsidy ran out. Other pandemic-era programs that supplied food purchased from farmers and ranchers have also been exhausted.
Julie Chase-Morefield, the president of Second Harvest Food Bank of North Central Ohio, said the rising demand means she can now distribute only 26 meals’ worth of food at a time, rather than the 46 meals she could supply in 2019. She thinks an aging population, spiking rents and lack of public transportation have together left people worse off, even though much of the economy has returned to its pre-COVID state.
“It really speaks to a deeper need that’s settling in to the community,” Chase-Morefield said, noting that her clients used to come in only a few times a year. “You know what the tendency is, so what’s happening that you’re seeing these numbers continuously going up, month after month?”
The numbers come during the final weeks of a presidential campaign in which the economy ranks at the top of voters’ concerns. Both campaigns have signaled support for making the child tax credit more generous.
But the similarities end there. The Democratic Party platform proposes a suite of improvements to services aimed at helping low-income people. The Republican platform, by contrast, does not mention poverty. Project 2025, a compendium of plans produced by former Trump administration officials and allies, focuses on tightening eligibility for federal aid programs.
Had Congress passed a permanent expansion of the child tax credit proposed by Democrats, an additional 3.6 million children would have been lifted above the poverty line, according to calculations by the Columbia University Center on Poverty and Social Policy.
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