U-M public policy professors awarded Equitable Growth grant to study effects of expanded Child Tax Credit
By Lauren Slagter
ANN ARBOR – With support from the Washington Center for Equitable Growth, public policy professors at the University of Michigan’s Gerald R. Ford School of Public Policy will delve deeper into exploring the effects of the expanded Child Tax Credit on household economic well-being.
The expanded Child Tax Credit was a pivotal part of the pandemic safety net, contributing to a historically low child poverty rate in 2021 when families received the tax credit as monthly payments. A $70,000 grant announced last month will enable Natasha Pilkauskas and Katherine Michelmore, both associate professors of public policy; with H. Luke Shaefer, the Hermann and Amalie Kohn professor of social justice and social policy; to examine how the expanded Child Tax Credit impacted low-income households’ experience of material hardship, debt, savings, and employment, with a focus on racial disparities in receipt of the tax credit.
“Existing evidence reveals the monthly Child Tax Credit payments reduced poverty, and especially child poverty, despite the economic downturn related to the COVID-19 pandemic. Our research going forward will explore non-income outcomes related to the expanded tax credit, like the ability to afford basic necessities and get enough food to eat,” Pilkauskas said.
The U.S. Census Bureau credited the expanded Child Tax Credit with contributing to a 46% decline in child poverty, from 9.7% in 2020 to 5.2% in 2021 – the lowest Supplemental Poverty Measure child poverty rate on record. The Supplemental Poverty Measure, which takes into account safety net programs, tax credits, and regional differences in the cost of living, is broadly considered more accurate than the government’s Official Poverty Measure.
The expanded Child Tax Credit, which was distributed as monthly payments of up to $300 per child from July to December 2021, increased the amount of the credit and made it available to the poorest families, who previously were not eligible. In 2022, the Child Tax Credit returned to its previous form, providing families with a lump sum as part of their tax refund and excluding families with no income.
In 2021, Pilkauskas and Michelmore authored a series of policy briefs on receipt and usage of the monthly CTC payments among families with low incomes. They analyzed survey data from Propel, the creators of a Providers mobile application that helps over 5 million families manage their Supplemental Nutrition Assistance Program (SNAP) benefits.
“The survey data revealed parents were using their CTC payments to pay for basic needs and child-related expenses. We also found disparities in which families received the tax credit, with families making less than $500 a month and Hispanic parents being substantially less likely to receive the monthly payments for which they qualified at the end of 2021,” Michelmore said.
Shaefer has conducted ongoing analysis of material hardship levels during the pandemic. That research found a direct link between the level of hardship faced by U.S. households and the federal government’s response in the form of stimulus checks, expanded unemployment insurance, and the expanded Child Tax Credit. Shaefer is among a group of poverty scholars that have contributed significant research on the potential for an expanded Child Tax Credit that follows the design of a child allowance to reduce child poverty rates in the U.S.
“In the past two years, the United States made more progress in reducing child poverty than ever before as a result of smart, evidence-based public policies. A better understanding of the effects of the expanded Child Tax Credit can help policymakers make informed decisions about the best ways to support families struggling to afford basic necessities,” said Shaefer, who is the founding director of U-M’s Poverty Solutions, an interdisciplinary initiative that partners with communities and policymakers to find new ways to prevent and alleviate poverty through action-based research.
A forthcoming policy brief from Pilkauskas, Michelmore, and Shaefer will provide insights into how families spent the monthly CTC payments and how the payments affected their experience of material hardship and employment decisions.
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U-M’s Poverty Solutions collaborated with Detroit Phoenix Center’s Summer Leadership Academy to support youth-led communications projects
By Lauren Slagter
Since its launch in 2016, Poverty Solutions at the University of Michigan has built an action-based research program that has informed efforts to prevent and alleviate poverty in Michigan and across the country.
As the university-wide initiative celebrates five years of public policy impact, Poverty Solutions faculty and staff reflected on the partnerships with policymakers, service providers, nonprofits and community groups at the local, state and national levels.
“We know scholars don’t have all the answers, and yet we have an important role to play. We can bring data, evidence and analysis to identify critical issues and evidence-based solutions,” said H. Luke Shaefer, founding faculty director of Poverty Solutions, the Hermann and Amalie Kohn Professor of Social Justice and Social Policy, and a professor of public policy and social work.
“What we care most about is whether our work fosters change that empowers families. Our record on this is what I am most proud of.”
Poverty Solutions has leveraged the expertise of hundreds of faculty affiliates across the university, utilized staff-led research, and involved hundreds of students in its work to better understand and address the systemic causes of poverty.
Its five-year impact report, released this week, summarizes efforts to:
- Strengthen the cash safety net during the COVID-19 pandemic to reduce hardship.
- Build a path to safe and stable housing for all Detroiters.
- Address student homelessness amid the pandemic.
The report also gives an overview of:
- Cross-campus projects, including faculty grants and the annual Real-World Perspectives on Poverty Solutions Speakers Series.
- Washtenaw County initiatives, such as the SummerWorks youth employment program and the Opportunity Index.
- Detroit partnerships, like the Detroit Partnership on Economic Mobility and the Detroit Metro Area Communities Study.
- State-level collaborations, including advising the Michigan Department of Health and Human Services and addressing child poverty in Emmet County.
- National engagement, such as having four Poverty Solutions scholars testify at U.S. Congressional hearings.
“There is still much to be done to prevent and alleviate poverty. Poverty Solutions remains committed to analyzing how policies and systems affect poverty rates in the U.S. and addressing the connections between poverty and structural racism,” said Kristin Seefeldt, associate faculty director of Poverty Solutions and associate professor of social work and public policy.
“Structural racism and its effects are deeply embedded in both the causes and consequences of poverty, and we need to pay particular attention to this when designing and promoting solutions.”
Poverty Solutions will continue to foster an interdisciplinary approach to poverty alleviation, train the next generation of leaders working to eliminate poverty, and deepen partnerships with community organizations and policymakers to ensure the initiative’s research is responsive to real-world needs and has practical application.
“The pandemic put a spotlight on the underlying disparities in our society that contribute to poverty,” said Mara Ostfeld, associate faculty director at Poverty Solutions and assistant research scientist at the Gerald R. Ford School of Public Policy. “Our communities have faced profound challenges over the past few years, and we hope to expand our partnerships to address these challenges together.”
Contact: Lauren Slagter, email@example.com
Jared Wadley, firstname.lastname@example.org
Black History Month, which is celebrated every year in February, highlights the experiences and honors the achievements of Black Americans throughout history. Poverty Solutions at the University of Michigan highlights key data from its research that relates to Black Michiganders.
The percentage of Black Detroiters who were wearing masks early in the pandemic (March-April 2020). A representative survey from U-M’s Detroit Metro Area Communities Study demonstrates that Black Detroit residents adopted these safety measures earlier than other groups. While 59% of Black residents were wearing masks at that point in the pandemic, only 38% of White residents and 35% of Latino residents were doing so. This difference was no longer apparent by early May 2020, when widespread mask use was more common among all ethnoracial groups.
In June 2021, however, this ethnoracial gap in the use of protective measures reemerged. Black Detroiters (81%) were more than twice as likely as White Detroiters (38%) to report wearing masks all of the time when in public to keep themselves safe from COVID-19. Latino Detroiters (77%) reported wearing masks all of the time in public at a rate similar to their Black neighbors.
Percent of Detroit residents who voted yes on Proposal R in support of Detroit City Council creating a reparations taskforce “to make recommendations for housing and economic development programs that address historical discrimination against the Black community in Detroit” in Detroit’s November 2021 election.
The proposal stemmed from the work of Lauren Hood, the community fellow for a research project led by U-M’s Center for Social Solutions with support from Poverty Solutions and other university departments. This project, titled “Crafting Democratic Futures: Situating Colleges and Universities in Community-based Reparations Solutions,” will build on institutional and community-based partnerships to explore localized reparations solutions for African American and some Native American communities across the country.
U-M is supporting three community fellows in facilitating conversations about reparations in Michigan communities: Hood in Detroit, Alize Asberry Payne in Ann Arbor/Ypsilanti, and Asa Zuccaro in Flint.
The estimated number of Black American fugitives from slavery who found safe haven in Canada before 1865. By the mid-1830s, the Detroit River was the busiest transit point for freedom-seekers along the entire Canada-U.S. border. David Porter, Poverty Solutions faculty affiliate and professor of English and comparative literature at U-M, helped launch the Detroit River Story Lab to support narrative infrastructure projects along the Detroit River corridor. They use the term “narrative infrastructure” to refer to the fabric of shared stories that binds a community together. Investing in narrative infrastructure consequently entails elevating and celebrating community stories – especially those traditionally marginalized – and supporting projects that incorporate them into how people understand places and form attachments to them.
The Detroit River Story Lab focuses on three overlapping components of narrative infrastructure: place-based education, community heritage, and nonprofit journalism. In each of these areas, the researchers work alongside partner organizations to help gather, contextualize, and share out river-related stories in ways that align with community priorities and activate riverside locations as sites of connection, stewardship, and healing.
The average number of land contracts or memorandums of contract filed each year with the Wayne County Register of Deeds between 2009-2017, according to Poverty Solutions faculty affiliate Joshua Akers, associate professor of geography and urban studies at UM-Dearborn, and colleague Eric Seymour at Rutgers University.
In the wake of the Great Recession, land contracts have reemerged in Detroit and across the country as a prominent alternative pathway to homeownership for households with limited access to capital and lending. A form of seller financing, a land contract is a legal agreement in which a buyer purchases a home through installment payments made directly to a seller; the buyer does not gain equity in the house until the contract is paid in full. Historically, land contracts have carried high interest rates, yielded high rates of eviction, and property owners have used them to exploit Black communities, in part because federal regulations and mortgage lenders excluded Black people from traditional lending opportunities throughout much of the 20th century.
However, some mission-driven organizations in Detroit and Southeast Michigan — including nonprofits, community development organizations, and other community development practitioners — have employed an alternative type of land contact. These organizations use land contracts as a community development tool that provides credit-constrained buyers a viable alternative pathway to homeownership, with fair sales prices, clear terms and conditions, and supports for buyers. In a 2021 brief on the use of land contracts in Detroit, Poverty Solutions Senior Strategic Projects Manager Karen Kling and Evelyn Zwiebach, state and local policy director for Enterprise Community Partners, draw from an extensive literature review and qualitative data collected through interviews and survey research to outline best practices, interventions, and key common-sense reforms that would make land contracts a safer and more effective homeownership tool.
The average auto insurance premium in 2019 for the 37 ZIP codes in Michigan in which more than 50% of residents are Black. This is over $2,000 more than the $3,100 average annual premium for all ZIP codes in Michigan.
Michigan’s new auto insurance law started to take effect in July 2020. Between 2019 and 2020, average estimated rates fell by 18% statewide, the steepest decline of anywhere in the country over that time period. Despite this dramatic fall, Michigan’s auto insurance rates remain among the highest in the nation. In Detroit, in particular, the average rate remains twice as high as the statewide average, according to analysis by Poverty Solutions summarized in a December 2021 policy brief titled “Building on Michigan’s auto insurance reform law.” While these data are preliminary and we may see rates drop more dramatically in the next year, it appears the new law does not go far enough to protect non-White and low-income people from being discriminated against in the insurance market.
To address persistent racial disparities in auto insurance rates, Poverty Solutions researchers Amanda Nothaft and Patrick Cooney recommend more regulation of the factors used to set rates by establishing mandatory driving-related factors that must carry a certain weight in the calculation. The 2019 reform prohibited the use of certain non-driving factors, but insurance companies can still use proxies for those factors — like “territories” instead of ZIP code and insurance scores that include a credit score component — that reinforce insurance redlining.
Poverty Solutions partners with 4 Detroit organizations to fund, evaluate economic mobility projects
DETROIT—Four Detroit organizations will receive funding and support from the University of Michigan to enhance the economic stability of affordable housing residents, improve the accessibility of mental health services, teach youth wealth-building strategies, and scale on-the-job training and apprenticeship programs.
Poverty Solutions at U-M, an initiative that aims to prevent and alleviate poverty through action-based research, will provide technical assistance as well as grants of $10,000 to support economic mobility projects led by Church of Messiah Housing Corporation, Journey to Healing, Urban Neighborhood Initiatives, and Wayne Metropolitan Community Action Agency.
The projects build on findings from “Investing in Us: Resident Priorities for Economic Mobility in Detroit,” a report released by Poverty Solutions in 2020. The report includes analysis of hundreds of sources of information that captured the voices of Detroit residents over 10 years. It then draws on these perspectives to identify common priorities, note progress made in decreasing poverty, and identify opportunities for action to increase economic mobility. The research, and the economic mobility grants, are supported by the Ballmer Group.
“‘Investing in Us’ highlighted residents’ priorities for improving economic mobility, and the grants support the implementation of some of those ideas,” said Afton Branche-Wilson, assistant director of community initiatives at Poverty Solutions and lead author of Investing in Us. “Poverty Solutions is excited to work alongside these Detroit organizations to help them design and evaluate their services, so other service providers and anti-poverty organizations can learn from their efforts.”
Here’s a closer look at the economic mobility projects:
Church of Messiah Housing Corporation’s Economic Self-Sufficiency Initiative
Since 1978, Church of Messiah Housing Corporation (CMHC) has renovated and constructed more than 200 units of affordable housing in Detroit’s lower east side Islandview Village neighborhood. In 2020, the corporation received a grant from Enterprise Community Partners to launch an Economic Self-Sufficiency Initiative, and the economic support services largely took the form of helping residents in the housing corporation’s five housing developments apply for rent assistance during the pandemic.
Now, CMHC wants to focus on assessing residents’ other needs and helping them prepare Individual Action Plans to address them. The grant will help fund the program, and the technical assistance will consist of assessing program impacts, making program adjustments as needed to improve participant outcomes, and preparing a funding strategy to expand the program and serve more community residents in need.
“Messiah Housing Corp. is deeply grateful to have the opportunity to work with Poverty Solutions to help it incorporate best practices to improve resident economic stability outcomes and expand the program to serve more community residents. This is much needed to help reduce the wealth gap for households of color in Detroit,” said Richard Cannon, executive director of Church of the Messiah Housing Corp.
>> See more from “Investing in Us”: Investing in Economic Stability – Low Incomes, High Costs
Journey to Healing’s redesign of art therapy materials and case management system
Journey to Healing is a nonprofit dedicated to serving families who have experienced trauma related to grief and loss by connecting them with mental health support systems. Following the onset of the COVID-19 pandemic, Journey to Healing developed new tools to assist community members, including the development of a virtual hub that provides telehealth and Zoom services and shipping free art therapy materials to families. This year, the organization has served more than 275 youth and adults with low incomes in Wayne County.
Based on client surveys and other feedback, Journey to Healing wants to improve the design and delivery of materials for the art therapy kits as well as client intake forms and marketing and educational materials. Journey to Healing plans to use its grant and technical assistance to develop a new case management tool, hold focus groups on how to make materials more accessible, and hire community residents to help design new materials.
“We are delighted to be selected as a recipient of the Poverty Solutions economic mobility project,” said Shardaya Fuquay, founding executive director of Journey to Healing. “We believe that everyone deserves high-quality mental health services to better support their health and wellness needs. Our organization is dedicated to providing holistic services through art, play, and drama therapy methodologies. As a recipient of this grant, we will expand our reach to serve more families in the Detroit and Wayne metropolitan area.”
>> See more from “Investing in Us”: Investing in Resident Power – Centering Community Voices, Investing in Valued Communities – Health Care
Urban Neighborhood Initiatives’ youth workforce development curricula
Urban Neighborhood Initiatives has 24 years of youth development experience, working with Southwest Detroit’s Springwells neighborhood. The initiative aims to create a safe and thriving environment for the 5,000 youth ages 14 to 24 who reside in Springwells.
Support from Poverty Solutions will enhance Urban Neighborhood Initiatives’ youth workforce development and summer employment programs by exploring options for wealth-building curricula, identifying training resources so staff can implement the curricula, identifying target outcomes and data collection methods to measure the impact of the new curricula, and supporting a pilot of the new curricula with a small group of youth.
“We are honored to have been selected to partner with Poverty Solutions to continue to improve economic mobility strategies for youth in the Springwells neighborhood of Southwest Detroit,” said Christine Bell, executive director of Urban Neighborhood Initiatives. “We believe that all people deserve to live in a healthy, beautiful place, filled with opportunities. Opportunities to become financially secure are critical to a thriving people and neighborhood. We are grateful and excited to learn together!”
>> See more from “Investing in Us”: Investing in Economic Stability – Education Drives Success
Wayne Metro’s evaluation of workforce development programs
Wayne Metropolitan Community Action Agency (Wayne Metro) provides more than 70 programs aimed at eliminating poverty and empowering Wayne County residents to be strong, healthy, and thriving. The agency’s workforce development programming includes paid apprenticeships and on-the-job training opportunities in the areas of early childhood education, green jobs (such as energy efficiency and water conservation), and various other employment pipelines within the agency such as tax preparation and community resource navigation. All workforce development programs include coaching, soft skills training, digital literacy training, asset building, and wraparound supportive services for the entire family.
With support from Poverty Solutions, Wayne Metro plans to design a program evaluation system, collect data, and evaluate the value of its different workforce development training programs. The grant will be used to compensate participants in the on-the-job training program with Wayne Metro and the apprenticeship program.
“Wayne Metro uses human-centered design and data to innovate programs to best serve families,” said Sitara Govender, innovative programs director at Wayne Metro, whose team is leading the economic mobility project. “Partnering with Poverty Solutions as we launch our workforce development initiatives means that we’ll be able to evaluate our programming as we go along, identifying barriers and implementing solutions, and making design changes that best meet the needs of participants.”
>> See more from “Investing in Us”: Investing in Economic Stability – “We Need Jobs”: Employment and Training
Poverty Solutions Director Luke Shaefer to give inaugural Kohn lecture on using evidence to fight poverty
ANN ARBOR ― Poverty Solutions Director H. Luke Shaefer will discuss lessons in using evidence to fight poverty at the inaugural Hermann and Amalie Kohn Professorship in Social Policy and Social Justice Lecture on Nov. 3.
The lecture will take place at 4 p.m. at Weill Hall. The in-person event ― held in room 1120 ― is open only to current U-M students, faculty, and staff; doors open at 3:30 p.m., and advance registration is required. The public is welcome to watch via livestream on the Gerald R. Ford School of Public Policy’s website.
Shaefer is the Hermann and Amalie Kohn Professor of Social Justice and Social Policy, an endowed professorship supported by the Kohn Collaborative for Social Policy that Harold and Carol Kohn established at the Ford School to catalyze interdisciplinary research on policy that promotes social equity and inclusion for all U.S. residents. Shaefer also is a professor of social work, the Ford School’s assistant dean of research and policy engagement, and the founding director of Poverty Solutions, a five-year-old, university-wide presidential initiative that aims to prevent and alleviate poverty through action-based research.
In his lecture, Shaefer will share case studies in the use of data and evidence to address poverty, making the case that applied research should inform real change. He will discuss both the persistence of disadvantage over many generations in United States and the moments where dramatic change has occurred for the better.
Contact: Lauren Slagter, 734-929-8027, email@example.com
ANN ARBOR — A new website from Poverty Solutions at the University of Michigan offers step-by-step guidance for parents to ensure they receive the expanded Child Tax Credit, which is worth up to $3,600 per child, per year.
The American Rescue Plan Act of 2021 increased the Child Tax Credit to $3,600 per year for children under 6 years old and $3,000 per year for children 6-17 years old. That means a single parent with a 4 year old and 7 year old would receive $6,600. The tax credit does not count as additional income that could affect eligibility for public assistance. The expanded Child Tax Credit will be paid out in regular payments rather than once a year, with monthly payments from the IRS of $250-$300 per child expected to start in July.
The first step to receive the tax credit is to file taxes for 2020, and the tax filing deadline is extended to May 17 this year. Parents of children under 18 may be eligible to receive this money, even if they have not previously filed taxes and have low or no earnings. Visit the Child Tax Credit: What You Need to Know website to learn more about eligibility for the expanded tax credit and see answers to frequently asked questions.
A recent survey of more than 10,000 households with low incomes, fielded by Propel in partnership with Poverty Solutions, shows the need for user-focused information on how to access the expanded Child Tax Credit. Propel runs a smartphone application used by people who receive food assistance, and less than half of those surveyed know about the Child Tax Credit and feel like they understand it. Families who are aware of it and understand it call it life changing.
“The expanded Child Tax Credit provides significant support for families and promises to lift millions of children out of poverty. The Child Tax Credit: What You Need to Know website aims to provide clear information that parents and service providers can use to make sure families receive this money,” said Afton Branche-Wilson, assistant director of community initiatives at Poverty Solutions at U-M.
This new model for the Child Tax Credit moves the U.S. closer to a universal child allowance, similar to what is offered in the United Kingdom and Canada. A universal child allowance provides monthly cash support to all families with children, whereas the Child Tax Credit previously used in the U.S. was paid in an annual lump sum and families with no earnings were not eligible.
“Raising kids is expensive. We know that many families face challenges covering the costs of rent, utilities, child care, and food on a monthly basis, and the flexibility that a child benefit like this provides can enable them to use the money in the ways they view as most important in raising their families,” said Poverty Solutions Faculty Director H. Luke Shaefer, who is the Hermann and Amalie Kohn Professor of Social Justice and Social Policy and associate dean for research and policy engagement at U-M’s Gerald R. Ford School of Public Policy.
In this episode of Michigan Minds, Luke Shaefer explains the Child Tax Credit in President Biden’s stimulus plan and how the University of Michigan is helping families navigate the process through the Poverty Solutions presidential initiative.
Shaefer is among a group of poverty scholars who have contributed significant research on the potential for an expanded child tax credit that follows the design of a child allowance to reduce child poverty rates in the U.S. Recent estimates from Columbia University’s poverty center find that this expanded Child Tax Credit will reduce child poverty by 45% overall, by 52% among Black children, by 62% among Native American children, and effectively eliminate the most extreme forms of child poverty, such as Shaefer wrote about in his book co-authored with Kathryn Edin, $2.00 a Day: Living on Almost Nothing in America.
“The American Rescue Plan is the boldest vision for fighting child poverty in the U.S. in at least 50 years,” Shaefer said. “Research shows if we can intervene while kids are young, it’s going to pay dividends in terms of higher academic performance, lower engagement with the criminal justice system, and higher earnings over a lifetime.”
However, this expansion of the Child Tax Credit is temporary; the American Rescue Plan puts it in effect for one year. Shaefer said it is important to document and analyze how the expanded Child Tax Credit affects families’ experience of material hardship in the coming year in order to inform debates about permanently offering the benefit.
“A permanent child allowance would provide a base level of support for middle-class and low-income families to rely on, and it would create a stronger safety net for our country,” Shaefer said. “We are better off as a society if we invest in our kids.”
Contact: Lauren Slagter, 734-929-8027, firstname.lastname@example.org
ANN ARBOR—Material hardship in the United States rose significantly in the final months of 2020 and was particularly high for households with children, according to new research from Poverty Solutions at the University of Michigan.
The rise in hardship occurred at a time when the income supports from the first COVID-19 relief bill, the Coronavirus Aid, Relief and Economic Security (CARES) Act, had largely expired and the months-long economic recovery had stalled. Adults with children reported food insecurity and housing hardship at a rate 70% to 100% higher than adults without children, according to the research, which is outlined in a policy brief titled “Trends in Hardship and Mental Health in the United States at the End of 2020.”
These findings can help to inform the scope and scale of the next COVID-19 relief effort currently being debated in Congress. The authors—Patrick Cooney and H. Luke Shaefer—argue that based on the success of the CARES Act, Congress should expand and extend unemployment assistance and target support directly to households with children by expanding and making fully refundable the Child Tax Credit.
Shaefer, who is the Hermann and Amalie Kohn Professor of Social Justice and Social Policy and director of Poverty Solutions, and a number of other leading poverty scholars have proposed expanding the existing Child Tax Credit and transforming it into a monthly child allowance. The Biden administration and U.S. Sen. Mitt Romney (R-Utah) are now advancing similar proposals. Estimates suggest the Biden administration’s proposed expansion of the Child Tax Credit would reduce child poverty by 45%.
“Expanding the existing Child Tax Credit, making it fully refundable, and dispersing it on a monthly basis would bring immediate support to families struggling during the COVID-19 crisis and dramatically reduce child poverty over the long-term,” Shaefer said. “Children have long been among the poorest in our country. Now is the time to do something transformational for struggling families.”
This is the second brief from Poverty Solutions tracking hardship through the pandemic. The research includes reported food insecurity, housing hardship, financial instability and mental health symptoms from August 2020 to January 2021, through the U.S. Census Bureau’s Household Pulse Survey, a nationally representative survey deployed regularly since early in the pandemic.
The authors found hardship increased steeply beginning in November 2020, as COVID-19 cases rose, the economic recovery slowed, and CARES Act income supports may have been depleted. By December 2020, the unemployment rate had plateaued at 6.7%, there were still roughly 9 million fewer Americans working than in February 2020, and the number of long-term unemployed continued to rise, suggesting many were still unable to find work.
Household Pulse data from January suggests the relatively modest COVID-19 economic relief bill passed in late December 2020 may have provided a necessary lifeline for many households, though it is unclear if it will be enough to significantly reduce hardship.
“This data is consistent with other analyses that found monthly poverty rates have increased in recent months, after we initially saw poverty drop and hardship stabilize after the CARES Act,” said Cooney, assistant director of economic mobility at Poverty Solutions. “It’s possible those initial supports were able to sustain struggling households for awhile, but by late fall, it appears that money had been exhausted for many who still could not find employment.”