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8 million Americans slipped into poverty amid coronavirus pandemic, new study says

Researchers looked at the devastating financial effect the pandemic has had on Americans, with Blacks, Latinos and children faring the worst.
Image: Evictions Continue Despite CDC Moratorium As COVID-19 Ravages U.S. Economy
A Maricopa County constable escorts a family out of their apartment after serving an eviction order for non-payment on Sept. 30 in Phoenix.John Moore / Getty Images

The number of Americans living in poverty grew by 8 million since May, according to a Columbia University study, which found an increase in poverty rates after early coronavirus relief ended without more to follow.

Although the federal Cares Act, which gave Americans a one-time stimulus check of $1,200 and unemployed workers an extra $600 each week, was successful at offsetting growing poverty rates in the spring, the effects were short-lived, researchers found in the study published Thursday.

After aid diminished toward the end of summer, poverty rates, especially those among minorities and children, rebounded, they said.

“The Cares Act, despite its flaws, was broadly successful in preventing large increases in poverty," said Zach Parolin, a postdoctoral researcher at Columbia University and one of the study’s authors.

The federal stimulus saved about 18 million Americans from poverty in April, he said, but as of September, that number is down to 4 million.

A family of four earning $26,200 a year or less is considered living below the poverty line, according to the U.S. Department of Health and Human Services. The total number of people in the U.S. living in poverty is 55 million, including the 8 million who joined their ranks since May, according to the Columbia researchers.

The study comes as negotiations for a new coronavirus stimulus package have stalled and Americans continue to be without relief for the foreseeable future.

Columbia researchers tracked monthly poverty rates in the U.S. between February and September, or before and throughout the coronavirus pandemic.

“We find that the monthly poverty rate increased from 15% to 16.7% from February to September 2020, even after taking the CARES Act’s income transfers into account,” wrote the researchers. “Increases in monthly poverty rates have been particularly acute for Black and Hispanic people, as well as for children.”

The results of the Columbia study are underscored by another recent study published by the University of Chicago and the University of Notre Dame, which found that within the last three months alone, 6 million Americans entered poverty.

Those researchers also found that poverty rates temporarily stabilized amid federal economic intervention, but are now getting worse, particularly for certain groups.

Moreover, the Columbia study found that poverty levels were somewhat improving in the last month, while the joint study said they were worsening.

“The big takeaway is that for a while the unprecedented government expansion of unemployment insurance and the stimulus payments kept families out of poverty,” said Bruce D. Meyer, an economist at the University of Chicago and an author of the joint study.

Negotiations between Senate Republicans and House Democrats for a new stimulus package remain at a standstill as Americans grapple with the fallout from the pandemic and millions remain unemployed.

“The gains in employment throughout the summer have not been enough to offset the dwindling income support,” said Columbia's Parolin.

Both groups of researchers said that unless more relief comes, the federal government runs the risk of more people falling into poverty.

“In this time of crisis, it is important for policymakers to respond as quickly as possible to address the needs of those hit hardest by the pandemic,” wrote the researchers in the University of Chicago-Notre Dame study.

The group will continue to track poverty in real time in an effort to “determine what additional support is called for” as the pandemic continues and government aid lingers, the researchers said.

“High levels of poverty, food insecurity and hardship will likely intensify in the absence of further income support,” Parolin said.