Sep 12, 2023 - Economy

Poverty increased in 2022 as wages fell and inflation rose: Census

Illustration of two people standing at edge of line graph one high, one low

Illustration: Eniola Odetunde/Axios

A measure of poverty tracked by the Census Bureau rose in 2022, as COVID era benefits expired and average income fell, according to a Tuesday report.

Why it matters: Child poverty saw a sharp increase in 2022 following a record low the year prior.

Driving the news: While the official poverty rate (considered an outdated measure) didn't see a significant change from 2021 to 2022, the supplemental poverty measure (SPM), which takes government aid into account, saw a sharp increase.

  • The SPM was 12.4% in 2022, an increase of 4.6 percentage points from 2021. It had not increased since 2010, per the Census Bureau.

State of play: The poverty rate went up because most pandemic-era support systems went away.

  • Key changes include federal tax policy changes like the expiration of temporary expansions to the Child Tax Credit and Earned Income Tax Credit, and the end of pandemic-era stimulus payments, according to the Census Bureau.
  • Social Security was the most important antipoverty program in 2022. It moved 28.9 million people out of SPM poverty.

Threat level: The SPM child poverty rate more than doubled from 2021, up to 12.4% in 2022 from 5.2% in 2021.

Our thought bubble, from Axios' Emily Peck: The historic increase in the supplemental poverty measure, almost all attributable to the pullback in government aid like the Child Tax Credit, is a sign of how much power policymakers have to significantly impact the poverty rate, particularly among children.

  • Advocates for the poor like to say that "poverty is a policy choice." The data out today is a stark illustration.

Meanwhile, median household income fell by 2.3% from 2021 to 2022, adjusting for inflation.

  • Average income was $76,330 in 2021 and $74,580 in 2022.
  • Income decreased in white and non-Hispanic white households. It remained similar in Black, Asian and Hispanic households.

Inflation rose 7.8% — the largest annual increase in cost-of-living adjustments since 1981, per the Census Bureau.

Go deeper: Why poverty rates are likely to rise this year

Go deeper