WHAT'S THE SKINNY ON THAT STIMMY?

In an earlier post, I noted that a recent report by the Census Bureau revealed that, between 2019 and 2020, the number of people living below the official poverty line had increased by 3.3 million, and that the poverty rate had jumped a full percentage point, rising from 10.5 to 11.4%. All told, we closed out 2020 with 37.2 million of our siblings trying to make do with incomes that fell below that official poverty line. That 37.2 million is just a couple of million shy of the total number of people residing in California. So, we're talking pretty big numbers.

Often overlooked, however, is another report that the Census Bureau released while it publicized the one referenced above. That other report--The Supplemental Poverty Measure:2020-- indicates that between 2019 and 2020 the poverty rate actually declined from 11.8 to 9.1 percent. What we've got, then, are two reports: One indicating that the poverty rate rose from 10.5% to 11.4% and another-- the Supplemental Poverty Measure (SPM)-- showing a decline from 11.8% to 9.1%.

So, what's the deal? Did it go up or did it go down? Well, it depends on how poverty is measured. And one of the measures--the SPM-- considers something that the other one does not: The first two rounds of the stimulus payments, and the beefing up of the unemployment insurance system (UI) that took place toward the end of 2020.

In other words, one of the reports--the SPM-- helps us to answer a critical question: What's the skinny on the stimmy?

THE CENSUS BUREAU'S OTHER REPORT

Here's the basic deal:

The report that recorded that increase from 10.5% to 11.4%, estimates the "official" level of poverty by looking at a household's pre-tax income and then comparing it various poverty thresholds adjusted for household size. For a one person household the 2020 threshold is $12,760. Fall below that threshold and you're "officially" poor. A four person household--to cite one more example-- is officially poor it its income drops below $26,760.

The SPM, in contrast, builds upon and extends the "official" rate by, among other things, using post-tax income and 1) subtracting such things as work related expenses, child support paid to another household and health care costs and then 2) adding in the monetary value of a wide range of government benefits designed to aid lower income families. Included in the 2020 additions were the first two rounds of the stimulus payments and the expansion of unemployment insurance benefits.

So, here's the skinny on that stimmy: The stimulus payments pulled 11.7 million out of poverty. What's more, the expanded unemployment benefits prevented an additional 5.5 million from plunging into poverty. And this is the primary reason that the SPM poverty measure declined between 2019 and 2020. Had these policies not been fought for and enacted, 17 million more people would have been caught up in poverty.

The bad news is that all the pandemic related assistance is now history. In the absence of a robust anti-poverty policy, a return to "normal" will include an increase in the numbers of people in poverty and a ramping up of the poverty rate.

The good news is this: We have yet another example that public policy possesses the potential to abolish penury. We need to continue to fight for a generous economic floor beneath which no one is allowed to sink. We need to draw upon the tradition of human rights to aid in the assessing of our economic policies. We need to put the work in to fight for a world in which everyone has access to economic security and freedom from the fear of want. We need to lift our sight high enough to envision the complete abolition of poverty and not simply getting it down to a tolerable level. We need to be done with the privatization of public pain. Poverty is a public issue and will can be abolished through public policies.

That's the skinny on the stimmy.