Community Solutions’ early analysis of the 2022 data released by the U.S. Census Bureau last week was mixed. Most of the good news came on Tuesday with the release of the Current Population Survey. This source includes statistics on poverty for states and the country as a whole, including both the Official Poverty Measure (OPM) and the Supplemental Poverty Measure (SPM).
The official poverty rate for Black Americans was the lowest ever recorded, at 17.1 percent, and the drop from the previous year was statistically significant. Even though disparities persist, the gap between non-Hispanic white people and Black, Indigenous, or People of Color (BIPOC) lessened. Things moved in the right direction. The race and gender income gaps also appeared to have shrunk between 2021 and 2022.
What does poverty data actually measure?
As we’ve written about in the past, official poverty metrics leave out the impact of many government programs designed to help struggling families. The SPM is a broader measure that counts non-cash assistance for families including housing vouchers, food assistance, and tax credits. The SPM increased by 4.6 percentage points between 2021 and 2022 and stands at 12.4 percent. The Census Bureau noted, “This was the first significant increase in the SPM rate since 2010.” SPM poverty rate more than doubled for children, from 5.2 percent in 2021 to 12.4 percent in 2022.
Data show that tax credits effectively moved 3.2 million fewer Americans out of poverty in 2022 than in 2021.
The dramatic increase in the U.S. poverty rate according to the SPM can largely be attributed to public policy. The enhanced Child Tax Credit (CTC), which benefited over 90 percent of Ohio families in 2021, was allowed to expire. Data show that tax credits effectively moved 3.2 million fewer Americans out of poverty in 2022 than in 2021, a drop of about one third. This was a deliberate policy choice.
The data for 2022 confirmed, yet again, that refundable tax credits and SNAP and school lunch are most effective at reducing the impact of poverty on children, but neither counts in official poverty statistics. During the time of data collection, additional hunger assistance via SNAP and universal free school lunch and breakfast were still in place. They have since expired, and we are likely to see another increase in Census data before 2023 is released next year.
Detroit and Cleveland were worst and second worst respectively among large cities in overall poverty rate, child poverty rate, and working age (ages 18-64) poverty rate.
Poverty rates increased in Cleveland for every age group
Local data for all geographies with population greater than 65,000 was released on Thursday as part of the American Community Survey (ACS) 1-year estimates. Five-year estimates for smaller areas will be released in December. Cleveland was yet again the second poorest large city in the U.S., among all cities with populations of 300,000 or more. Detroit retained the bottom spot. Detroit and Cleveland were worst and second worst respectively among large cities in overall poverty rate, child poverty rate, and working age (ages 18-64) poverty rate. Cleveland was second worst just ahead of Miami in poverty rate of older adults (ages 65 and over). Unfortunately, while child poverty at the state and national level improved between 2021 and 2022, in Cleveland it got worse. These estimates show an additional 2,200 Cleveland children falling into poverty last year. As in past years, our youngest neighbors were most likely to be poor. Over half of Cleveland children under age 5 were living in poverty in 2022. Ohio was one of only 19 states where poverty grew for older adults. While none of the changes are statistically significant, they are reason for concern.
Policies informed by the Supplemental Poverty Measure could lift thousands of Ohioans out of poverty
These new data demonstrate that broader economic and labor market trends are not enough to lift Clevelanders out of poverty. In fact, more than 80,000 Ohioans, including 5,000 adults in Cleveland alone, worked full time for the full year in 2022 and still did not earn enough for them, or their families to be above poverty. The SPM data clearly demonstrates the transformative impact government action and sound public policy can have on reducing child poverty, improving economic opportunity, and catalyzing thriving communities. We have the evidence and a roadmap. It is time for policymakers to act.
