U.S. Census says poverty declined in 2020 due to federal stimulus payments and unemployment aid

The official U.S. poverty rate rose to 11.4% in 2020, buoyed in large part by the unprecedented federal stimulus that helped support an economy ravaged by the coronavirus pandemic, which caused widespread suffering and the biggest job losses in 80 years.

The increase in the poverty rate, up from a record low of 10.5% in 2019, means 3.3 million more Americans fell into severe financial hardship last year, according to U.S. Census data. Poverty is defined as having an income of less than $26,200 a year for a family of four.

However, poverty actually fell once all the government aid payments are taken into account, according to the U.S. Census. The so-called supplemental poverty measure declined to 9.1% in 2020 from 11.8% in 2019.

Extensive federal relief assistance passed during the coronavirus pandemic - stimulus payments, $600 in weekly unemployment benefits, more generous food assistance, among others - is widely credited by economists and policy experts for preventing another Great Depression.

Median income declined by 2.9% in 2020 to $67,500 as a result of the pandemic fallout, one of the largest declines in a single year. The Census Bureau attributed this to so many people losing jobs.

President Joe Biden is urging Congress to enact more programs to help the poor and working class as part of a $3.5 trillion package that would make significant investments in many parts of the economy. Top White House aides point to the success of the pandemic aid as an example of how additional resources can make a dramatic difference in lowering poverty and hardship.

The poverty rate spiked to 15.1% in 2010 during the aftermath of the Great Recession and did not begin to decline much until 2013 - six years after the recession began. Many economists fault the U.S. government for not providing enough aid after that deep recession to help prevent widespread hunger, job loss and foreclosures.