By Rose Frech
Imagine working a job for a low wage, while raising two children, in a state like Ohio where $16.64 is the rate required to afford an average two-bedroom rental. Consider the multiple other costs that are involved with making ends meet — including clothing, school supplies, transportation expenses, child care, and food. According to the federal definition, there’s a good chance you would not be considered to be living in poverty, in spite of the fact that making ends meet on your salary alone would be nearly impossible. Now consider how supports such as refundable tax credits, SNAP (food stamps) and Medicaid could provide a lifeline — allowing you to afford the basics and take care of your family.
Last week, the US Census Bureau released their annual findings on poverty and income inequality for 2020. While the official poverty rate increased by 1 percent, the Supplemental Poverty Rate decreased by 2.6 percent. This seemingly innocuous variance is significant for an important reason. The Supplemental Poverty Rate takes into account expenses like child care, as well as income from social safety net programs, stimulus payments, and tax credits, while the official rate does not. Without taking into account this government assistance, the poverty rate would have increased by 2.8%.
This clearly demonstrates that poverty decreased during a period of significant economic uncertainty due to a robust government response that provided direct support to individuals. This included stimulus payments, expanded nutrition benefits, paid leave, expanded unemployment, and other important reforms that allowed people to keep their health insurance. These programs prevented many people, including many working families in our region, from falling into poverty. In short, the social safety net was there when we needed it the most.
As an organization tackling poverty in the region, I can say with certainty that we can’t do this alone. We need investments in public benefits, alongside the programs we offer like Head Start, job training, and public transportation. But further action is necessary so that we don’t see a swift rebound. With the cancellation of the eviction moratorium and the expiration of pandemic unemployment compensation, many individuals in our region will again face the risk of severe economic hardship.
Congress is currently at a turning point as they consider both a massive infrastructure bill as well as multiple other reforms that could have a once-in-a generation impact on working families. This most recent data is clear evidence that government aid works to reduce poverty, including for millions of working families. Continued investments, including making permanent the expanded Child Tax Credit and “human infrastructure” like support for child care, affordable college, and paid leave, can help us to build a system that works for all of us, during good times and hard times.
Rose Frech is development director for Hocking Athens Perry Community Action