The number of people living in poverty has grown by six million people in the United States in the past three months, Notre Dame and University of Chicago researchers found in a recent study.
While the $2 trillion COVID-19 stimulus bill signed in March aided millions of Americans as the economy began to shut down, the benefits of the CARES Act have now run out, and more Americans are in poverty now than before the pandemic began.
Dr. James Sullivan, professor of economics, has been studying poverty measurements and the well-being of the poor for over a decade with Dr. Bruce Meyer, a professor at the University of Chicago.
When the pandemic hit, they both saw an increased need to develop a method to measure poverty in a real-time basis. Sullivan said poverty rates were falling before the pandemic hit, but when businesses began to close in March, Americans saw a huge decline in employment. Then, the CARES Act was signed.
“The benefits that came in through the relief package, more than offset the loss in earnings, and as a result poverty fell,” Sullivan said.
The data shows that the relief package sustained Americans through April, May and June, but then poverty levels began to rise.
“The recent rise in poverty rates completely wiped out the decline in poverty than we saw shortly after the pandemic,” Sullivan said.
While almost every demographic group in America saw a decline in poverty immediately after the pandemic began, there has been a much sharper rise in poverty in the last few months for Black people, children and less educated people than other groups.
“The impact of the pandemic is disproportionate — it's not equal across groups — and it seems to be that some of the most vulnerable groups are bearing the brunt of the pain,” Sullivan said.
While the study does not directly look to explain why certain demographics of people have suffered the most during the pandemic, Sullivan mentioned how the pandemic has affected different sectors of the economy very differently. While online sales and home renovation stores have enjoyed a boom, smaller retail business have been hit the hardest.
The study uses monthly data on the distribution of family income, comparing the levels to previous years and to the official estimates of poverty to measure monthly poverty levels on a real-time.
Senior Josie Donlon, an undergraduate research assistant in Sullivan’s lab, said she was surprised to learn that official poverty statistics in the U.S. are only published on an annual basis in September. Over the past few months, she said she has better learned how to use public data to create certain measurements they are interested in.
“I never really thought that it was possible to get these measures almost ahead of time by being creative and using the available resources,” Donlon said.
Sullivan sees this research as essential as policymakers consider how they can best serve struggling Americans in the pandemic.
“For deciding whether or not, or the extent to which, we should issue another round of federal relief, having this kind of information is critically important,” he said.
