Poverty Rate Reaches All-Time Low, Even Among Children

The poverty rate across the United States reached a record low in 2021 thanks to federal measures taken to improve the quality of life and boost the income of families, thus cutting the number of poor children almost by half.

“Americans wonder if the government can shape successful policies that address poverty, states Luke Shaefer, who runs a center on poverty at the University of Michigan. “[The expanded child tax credit] offers incontrovertible evidence that it can.”

According to the Supplemental Poverty Measure, a baseline that includes wages, taxes, and the entire account of government aid, the poverty rate fell to 7.8%. It was at 9.2% in 2020. The share of children in poverty dropped to 5.2% in 2021, down 4.5% from the previous year. Thanks to the American Rescue Plan, the poverty rate is decreasing in an accelerated way, reflecting what appears to be a long-term trend. The injection of trillions of stimulus dollars – $570 billion to Americans’ income, $339 billion to unemployment insurance, and $128 billion to the child tax credit expanded to include parents with minimal or no earnings – removed millions of people from poverty. In 2021, 25.6 million people experienced poverty, down from 30 million in 2020, and 50 million in 2011.