Rising Poverty Rates Despite Increased Incomes: A Discrepancy in Economic Recovery

Rising Poverty Rates Amid Improved Incomes

The latest report from the government reveals a concerning trend: the nation’s poverty rate increased last year, despite an overall rise in incomes. This shift can be attributed to escalating prices and the conclusion of the last of the pandemic-era relief programs.

According to the Census Bureau’s “supplemental” measure, which considers a wider array of benefits and expenses than the official poverty rate, the proportion of Americans living in poverty climbed to 12.9 percent in 2023, up from 12.4 percent in 2022. In contrast, the median household income, when adjusted for inflation, rose to $80,610, finally returning to its pre-pandemic level.

The recent surge in poverty levels can be traced back to the winding down of pandemic relief aid, alongside an exceptionally robust labor market that had previously bolstered wages for many at the lower end of the pay scale. While stimulus checks, enhanced unemployment benefits, and expanded tax credits for low-income families successfully halved child poverty in 2021—bringing it to the lowest level since records began in 1967—the expiration of these supports, coupled with rising prices for essential goods and services, has reversed these significant gains.

Olivia Golden, the interim executive director of the Center for Law and Social Policy, a progressive advocacy organization, emphasized the need for dual strategies to combat poverty: “You need two kinds of strategies to keep poverty down: one is the economic strategy, and one is the investments in core programs and the safety net,” she stated. “The idea that policies have high stakes in terms of the lives of families and their material hardship is very vivid as you look over the last few years.”

Notably, the income increases were particularly significant for low-wage households, rural families, and men. Interestingly, this period also marked the first rise in the earnings gap between males and females since 2003. Census officials suggest this may be linked to a rise in labor force participation among Hispanic women, who traditionally earn less.