The child poverty rate in the US has improved dramatically because of expansions of the social safety net during the Covid-19 pandemic, but experts are warning that allowing such measures to expire may reverse these historic gains.
While the pandemic put pressure on the wellbeing of millions of children, new measures greatly improved child welfare. The child poverty rate decreased from 14.2% in 2018 to less than 5.6% in 2021, and the rate of severe poverty was cut nearly in half, according to projections.
“Child poverty in the United States is not inevitable. It is a choice,” said Lisa Chamberlain, a professor of pediatrics at the Stanford School of Medicine and co-author of a perspective published on Monday in the journal Jama Pediatrics. “It’s not a question of how to do this – it’s a question of political will.”
The child tax credit, the primary driver of these changes, reduced child poverty by an estimated 40%. Starting in July, it provided monthly checks to families. The vast majority of these funds paid for basic necessities, including food, clothing, shelter, utilities and education.
Other safety-net expansions in the pandemic included three stimulus checks, a moratorium on evictions, increased unemployment benefits and more funding for food, through the Supplemental Nutrition Assistance Program (Snap), and housing.
“The expansion of all of those really caused a historic decline in child poverty,” Chamberlain said.
Without this support, nearly a third of children would be living in poverty, according to research.
The benefits “have made a huge difference – not just preventing what could have been the worst-case scenario in terms of poverty rises, but actually resulting in dramatically lower poverty rates than we’ve seen in decades”, said Megan Curran, policy director at Columbia University’s Center on Poverty and Social Policy.
The child poverty rate in 2020 was the lowest since the US Census Bureau started measuring in the 1960s, and 2021 may have been even lower, she said. “So that’s huge.”
But the child tax credit expired in January, plunging an estimated 3.7 million children into poverty – a 41% increase from December, according to the center’s analysis.
“There was essentially a cliff between December 2021 and January 2022,” Curran said. “Without the payments, families have definitely been hurting in the last two months.”
Families are again struggling to buy food, pay rent and keep the lights on, particularly as food and energy costs have risen. “It’s a double hit that they’re experiencing, which is the loss of the payments and increased prices for those essentials as well,” Curran said.
The Build Back Better bill would have extended the credit, but it stalled in the US Senate after opposition from the Democratic senator Joe Manchin, who cited the child tax credit as one of his reasons for quashing the bill.
There is an enormous economic benefit to reducing child poverty, research shows. Poverty can lead to hunger, poor health, poorer education and worse job prospects.
“Not having enough food, not having stable places to live – all of that disrupts their ability to really engage with school,” Chamberlain said. “The ability to engage in the classroom, to engage in their educational process, is what ultimately takes them to their final potential of being able to have a good job and contribute.”
Child poverty costs the US between $800bn and $1.1tn each year because of lost adult productivity and the increased costs of health and criminal justice spending, according to the National Academy of Sciences. Poverty reduction programs have strong moral and economic rationales, researchers say.
“Child poverty is actually costing us, as a country, an incredible amount every year,” Curran said. “Cutting child poverty dramatically not just helps kids on a personal level and a family level, but it also makes sense economically speaking.”
Some opponents have argued that the credit might discourage families from working, but research shows there was no discernible effect on employment.
In fact, the researchers said, the money could be used for childcare, which allows parents to work more – particularly during the pandemic, when many informal caregivers, like grandparents, were lost to death and disability.
“The number of incapacitations from Covid for that has been really, really difficult – and we have seen enormous numbers of women leave the workforce,” Chamberlain said.
With the expiration of the child tax credit, such progress is now threatened.
“I would not say it wipes out the gains,” Chamberlain said. “It eliminates our ability to keep getting those gains.”
For the months the families received the credit, they had more food, stable housing, less stress – and greater developmental benefits for children.
“If they can continue to extend this, we can continue to see that happen.”
The immediate success of the program is a proof of concept, especially because it’s unusual for a single policy to show such clear and stark gains, Curran said.
“We’ve shown now that all of this – high poverty, rising poverty – is completely reversible,” she said. “We know now what works, and we’ve seen it working.”