Federal spending reduced overall poverty last year despite the pandemic-recession
But in Hawaiʻi, tens of thousands of residents below the poverty line still struggled to make ends meet.
On Tuesday, September 14, the Census Bureau released data from 2020 that confirms the critical role government programs have in alleviating poverty in our communities.
Analysis from the Center on Budget and Policy Priorities (CBPP) shows that government aid protected 53 million people from poverty in 2020 (up from 35 million in 2019). With income from government assistance excluded, the poverty rate would have increased substantially (by 2.8 percent), reflecting in part that many people saw their private incomes fall because of the pandemic. However, with government assistance factored in, poverty, instead, fell by 2.6 percent.
Social Security continued to be the most important anti-poverty program, moving 26.5 million individuals out of poverty. Stimulus payments kept the annual incomes of nearly 12 million people above the poverty line in 2020. Unemployment insurance (UI) benefits kept 5.5 million people out of poverty (5 million more than in 2019) and monthly nutrition assistance kept 3.2 million out of poverty.
“As impressive as these figures are, we need to keep in mind that they are based on total annual income,” says Danilo Leandro Trisi, Director of Poverty and Inequality Research at CBPP. “They miss the wrenching ups and downs that many experienced in 2020. They obscure the weeks and months of hardship families waiting to receive aid, or who never received it, faced.”
The Census Bureau releases two sets of data annually: the Official Poverty Rate (OPR) as well as its Supplemental Poverty Measure (SPM). For both measures, people are considered to be “in poverty” if the resources they share with others in the household are considered insufficient to meet basic needs. However, the SPM is the more accurate measurement because it includes factors such as cost of living in making that determination.
In Hawaiʻi, the SPM threshold during 2020 was:
$32,487 for a renter;
$32,266 for a homeowner with a mortgage; and
$26,701 for a homeowner without a mortgage.
This means that, despite federal government relief, roughly 166,000 Hawaiʻi residents struggled with poverty last year, or 12 percent of the population. When our residents struggle to pay for their basic needs, our economy suffers greatly.
We must continue to expand government investment in individuals and our communities at both the federal and state levels. We must continue to work on tax reform to equitably pay for these investments, and we have to do things like raise the minimum wage—a policy that would especially help working women and parents in low- to middle-income households.
A minimum wage worker in Hawaiʻi only makes $21,000 a year. That’s just two-thirds of the bare minimum a typical low-wage worker needs to live at or just above the poverty line here. We need to address these issues to create an economy that leaves no one behind and helps us thrive together.
