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With stimulus factored in, US poverty rate declined in 2020

A homeless encampment set up along the boardwalk in the Venice neighborhood of Los Angeles. Stimulus checks saved 11.7 million people from poverty, according to the census.Jae C. Hong/Associated Press

The percentage of Americans in poverty fell last year to the lowest level on record as the federal government spent trillions of dollars to cushion the blow of the worst economic crisis since the 1930s.

The US Census Bureau said Tuesday that the supplemental poverty rate, which includes several forms of government assistance, declined to 9.1 percent from 11.8 percent the year before. The measure, which includes stimulus payments, Social Security, and housing subsidies, was introduced in 2009.

The official poverty rate, which doesn’t factor in major aid programs to assist low-income families, increased to 11.4 percent.

At the same time the poverty rate fell, however, the number of people across the country working full time dropped more sharply than at any time since the late 1960s, and median income declined for the first time in nearly a decade,


In Massachusetts, the poverty rate accounting for government aid is 9.4 percent, according to a three-year average, while the official rate, which doesn’t reflect geographic differences such as housing costs, is 8.2 percent. The median household income in Massachusetts last year was $86,725, down from $87,707 in 2019.

The stimulus checks, which provided $1,200 payments to millions of Americans last year, saved 11.7 million people from poverty, according to the census. Unemployment insurance, which was also expanded, kept 5.5 million out of poverty. Social Security continued to be the biggest antipoverty measure, preventing 26.5 million people from falling into poverty.

For the official poverty rate, the threshold for two adults and two children is $26,246.

“This really highlights the importance of our social safety net,” said Liana Fox, chief of the Census Bureau’s Poverty Statistics Branch.

Job losses last year were staggering. The number of people working full time and year-round dropped by about 13.7 million, and a disproportionate number of those experiencing cutbacks were lower-wage workers. Despite the massive drop in full-time work, real median earnings of all workers only decreased by 1.2 percent, while median earnings for those employed full time went up 6.9 percent — reflecting the large decrease in lower-wage employment across the economy.


“It was really concentrated at the bottom of the earnings distribution,” said Trudi Renwick, the Census Bureau’s assistant division chief for economic characteristics.

Part of the reason the supplemental poverty measure data looks so good is that workers were in such dire straits before, according to Susan Crandall, director of the Center for Social Policy in the McCormack Graduate School at the University of Massachusetts Boston.

“Poverty fell in 2020 because wages were extremely low prior to the onset of the pandemic,” she said in an e-mail.

More men than women lost full-time year-round employment last year — 7.5 million and 6.2 million, respectively. Overall, though, median earnings of all women decreased by 1.2 percent, while men didn’t experience a statistically significant drop, suggesting that more women cut back or gave up part-time jobs, possibly due to caregiving, Crandall said.

Median household income dropped across all racial and ethnic groups between 2019 and 2020, falling 4.5 percent for Asian households, 2.7 for non-Hispanic whites, and 2.6 for Hispanic households. The income difference for Black households was not statistically significant, though the Black population has the highest poverty rate among the major ethnic groups, at 19.5 percent.

In Massachusetts, the pandemic has had a significant effect on low-income workers. From January 2020 to June 2021, employment rates for people in Massachusetts making below the median wage, around $37,000 a year, fell 11.1 percent, while employment rates for those making more rose 2.6 percent, according to Opportunity Insights, a research organization at Harvard University.


At Economic Mobility Pathways in Boston, the low-income clients served by the antipoverty nonprofit have seen their struggles increase as the pandemic wears on. In the fiscal year that ended June 2019, more than half the agency’s 1,300 clients were able to increase their earnings from work by 10 percent or more. Last year, only 44 percent were able to do so. And in fiscal year 2021, just 23 percent managed to make 10 percent more.

With the high cost of living in Boston, which has some of the highest child care and housing costs in the nation, a family with one adult and one child needs an income of more than $80,000 a year to cover basic living costs, according to the MIT Living Wage Calculator, said Nicki Ruiz de Luzuriaga, vice president for institutional advancement at EMPath.

“You don’t think of somebody making $70,000 a year as needing a subsidy, but guess what? In Boston at least, they do,” she said.

The census data showing the impact of the stimulus payment points to the fact that assistance is key, Ruiz de Luzuriaga noted.

“Poverty is a policy choice,” she said. “When we invest more money in people, then we have fewer people in poverty.”


Katie Johnston can be reached at katie.johnston@globe.com. Follow her on Twitter @ktkjohnston.