New census data reveals that poverty is often a policy decision. Between 2019 and 2021, new federal policies pulled millions of people out of poverty across the West. Now that those pandemic-era programs have expired, poverty has again skyrocketed, particularly for children, according to this year’s census data. Caroline Danielson, a senior fellow and poverty researcher at the Public Policy Institute of California, a nonprofit, nonpartisan think tank, said that the census data shows that “if there’s a political will, there’s definitely a way of crafting a policy that can dramatically change the picture of child poverty.”
Danielson said that the poverty rates held steady for years, but things shifted in 2020, when the Biden administration provided stimulus payments and expanded two federal tax credits: the earned income tax credit and the child tax credit.
Note: The supplemental poverty rate measure, used in all of our charts and maps, is the sum of cash and non-cash benefits minus necessary expenses. It is a comprehensive measure of families’ resources. Census data contain several standard errors. Individuals should be cautious when interpreting differences between groups such as race and ethnicity, as these groups average across a large number of diverse groups. Source: 2021 and 2022 Annual Social and Economic Supplements of the Current Population Survey.
After the credits expired, poverty rates overall increased nationwide, from a historic low of 7.8% in 2021 to 12.4% in 2022. Child poverty showed a similar trend, dropping from 9% to 5.2% between 2020 and 2021, but rising more than two-fold in 2022. All of the Western states experienced drastic increases in poverty.
Given the expiration date on those policies, Danielson had suspected that poverty rates would increase in 2022. But she didn’t expect the rise to be so sharp. “It’s pretty dramatic,” she said.
Across the West, many individuals and households also saw their incomes drop, but not substantially. Inflation rose by a historically high level of 7.8%, likely influencing the sharp increase in poverty nationwide. Danielson believes that rising inequality also played a role in increasing poverty rates.
The data comes from the Current Population Survey Annual Social and Economic Supplements, a monthly in-depth survey of more than 75,000 households that provides demographic information on the labor force conducted jointly by the Census Bureau and the Bureau of Labor Statistics.
The survey measures poverty in two ways: the official poverty rate, which is based on cash resources, and the supplemental poverty measure (SPM), which, according to Danielson, is “a better, more comprehensive set of family resources.” The official poverty line is the same across all states except Alaska and Hawai’i, and it doesn’t scale based on location. “But the SPM does account for that. It adjusts for how much it costs to buy a house across metro areas.” The supplemental poverty measure is calculated by family unit and is the sum of cash income plus refundable tax credits, minus other taxes and child support payments, along with other discretionary spending for critical goods not included in the thresholds, such as medical and work expenses.
Individuals in Western states who identified Native American/Alaska Native saw higher poverty increases than Asian or white individuals. And overall, women faced larger poverty increases than men.
Southwestern states, especially in Nevada, California and Arizona, experienced sharp increases to their poverty rates. “Although California is a high-wealth state, it also has high inequality,” Danielson explained.
Idaho, Wyoming and Utah, in contrast, had some of the lowest poverty rates in the nation. “I think part of the story is in lower cost of living,” Danielson said. A social safety net and job availability both greatly influence the poverty rate in any given state, she added.
Poverty rates may continue to rise nationwide in 2023, as the effects of the expanded tax credits and stimulus payments continue to diminish.
Here’s how the Western states compared:
Note: Household median incomes are weighted and adjusted for inflation.
Natalia Mesa is an editorial intern for High Country News based in Seattle, Washington, covering the Northwest. Email her at natalia.mesa@hcn.org or submit a letter to the editor. See our letters to the editor policy.
Republish our articles for free, online or in print, under a Creative Commons license.
