Nearly 8 million Americans fell into poverty since June: study
Nearly 8 million Americans have fallen into poverty since June due to a combination of rising coronavirus cases and dwindling federal support, according to a study released Wednesday by economists at the University of Chicago and the University of Notre Dame.
The national poverty rate rose by 2.4 percentage points from 9.3 percent in June to 11.7 percent in November, putting 7.8 million people below the poverty line, according to the paper from Notre Dame’s James X. Sullivan, Chicago’s Bruce D. Meyer, and Jeehoon Han of Zhejiang University.
The researchers pinned the rise in poverty on households exhausting stimulus checks and the July 31 expiration of enhanced unemployment benefits, both issued through the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act passed in March.
Those stimulus checks and enhanced unemployment benefits helped reduce poverty from 10.9 percent before the pandemic to 9.3 percent through March, April and May. But the expiration of that aid and the subsequent slowing of the U.S. economy have thrown more households into poverty even as the unemployment rate declined, the researchers said.
“The entire decline in poverty through June can be accounted for by the one-time stimulus checks the federal government issued, predominantly in April and May, and the expansion of unemployment insurance eligibility and benefits. In fact, in absence of these programs, poverty would have risen sharply,” they wrote.
The troubling new data comes as the White House and Congress race to strike a deal on a follow-up to the CARES Act and prevent millions more Americans from falling into poverty or deeper financial hardship.
Senate and House leaders are closing in on a package based on a bipartisan, bicameral $748 billion relief bill released earlier this week, but with the addition of another round of stimulus checks.
Without a deal, an additional 13 weeks of unemployment insurance after the expiration of state benefits, an expanded unemployment benefit program for contractors and gig workers, and other crucial CARES Act jobless aid measures are set to expire on December 31.
Roughly 9.4 million Americans will lose their unemployment benefits by the end of the month without action from Congress, according to another study released Wednesday by the JP Morgan Research Institute. An earlier estimate from progressive non-profits The Century Foundation and Employ America projected that 12 million Americans will lose jobless benefits before 2021.
More than 10 million U.S. households are also facing eviction or foreclosure when other federal protections issued through the CARES Act and Centers for Disease Control and Prevention (CDC) also expire in 2021.