Poverty increased in 2022 as wages fell and inflation rose: Census

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A measure of poverty tracked by the Census Bureau rose in 2022, as COVID era benefits expired and average income fell, according to a Tuesday report.

Why it matters: Child poverty saw a sharp increase in 2022 following a record low the year prior.

Driving the news: While the official poverty rate (considered an outdated measure) didn’t see a significant change from 2021 to 2022, the supplemental poverty measure (SPM), which takes government aid into account, saw a sharp increase.

The SPM was 12.4% in 2022, an increase of 4.6 percentage points from 2021. It had not increased since 2010, per the Census Bureau.

State of play: The poverty rate went up because most pandemic-era support systems went away.

Key changes include federal tax policy changes like the expiration of temporary expansions to the Child Tax Credit and Earned Income Tax Credit, and the end of pandemic-era stimulus payments, according to the Census Bureau.

Social Security was the most important antipoverty program in 2022. It moved 28.9 million people out of SPM poverty.

Threat level: The SPM child poverty rate more than doubled from 2021, up to 12.4% in 2022 from 5.2% in 2021.

Last year, child poverty was at a record low.

Our thought bubble, from Axios’ Emily Peck: The historic increase in the supplemental poverty measure, almost all attributable to the pullback in government aid like the Child Tax Credit, is a sign of how much power policymakers have to significantly impact the poverty rate, particularly among children.

Advocates for the poor like to say that “poverty is a policy choice.” The data out today is a stark illustration.

Meanwhile, median household income fell by 2.3% from 2021 to 2022, adjusting for inflation.

Average income was $76,330 in 2021 and $74,580 in 2022.

Income decreased in white and non-Hispanic white households. It remained similar in Black, Asian and Hispanic households.

Inflation rose 7.8% — the largest annual increase in cost-of-living adjustments since 1981, per the Census Bureau.

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