Stimulus Payments Kept Poverty in Check, Census Says

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11.7 Million

The Balance

That’s how many people were lifted above the poverty line by the stimulus payments of 2020, according to newly released Census data.

The two stimulus checks the federal government sent to most Americans last year, one for up to $1,200 per person, the second for a maximum of $600 per person, were the most effective anti-poverty measure the government took in 2020 besides Social Security payments, the U.S. Census Bureau said Tuesday in a report. (A third stimulus payment, for up to $1,400 per person, went out in 2021.)

The report, which focused on poverty and income, showed that, by one measure, poverty actually decreased last year amid the pandemic’s economic downturn. Besides the stimulus payments, unemployment benefits, which were greatly enhanced in response to the pandemic, had a big impact, preventing 5.5 million people from falling into poverty. That’s according to the Census’s supplemental poverty measure, which took into account the stimulus payments and taxes, which are left out of the so-called official poverty rate calculated by the government.

The stimulus checks reached a broad range of households, with an estimated 85.5% receiving the first round, according to a Census survey from June 2020.

“This really shows the importance of the social safety net,” said Liana Fox, branch chief of the poverty statistics branch of the Census Bureau, in a press conference Tuesday.  

Indeed, while the official poverty rate rose from 10.5% to 11.4% in 2020, the more detailed supplemental poverty rate fell from 11.8% to 9.1%—the first time since the SPM was created in 2009 that it was lower than the official rate. The Census report was based on data from an annual survey of more than 75,000 households. 

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