Income inequality rose last year, but child poverty nearly halved – NBC Chicago

Income inequality rose last year, but child poverty nearly halved - NBC Chicago
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Income inequality in the United States rose last year for the first time in more than a decade, but child poverty was cut nearly in half due to the expansion of the child tax credit. federal government children and stimulus payments made in response to the COVID-19 pandemic, according to new survey results released Tuesday by the US Census Bureau.

The income inequality index rose 1.2% from 2020 to 2021, the first time the measure known as the Gini index has risen since 2011, according to a report on survey results on the current population.

Falling household incomes among the poorest US residents appear to have caused the income inequality gap to widen. Households in the 90th percentile of the income distribution, the richest, had an income 13.5 times higher than households in the 10th percentile, the poorest. This is a 4.9% increase from 2020.

“He’s sensitive to extremes on either end,” said Liana Fox, a Census Bureau official. “This suggests that the decline in real income at the bottom end has caused the Gini index to rise.”

In most cases, there was little year-over-year change in median household income based on demographic characteristics such as race or ethnicity.

However, people in households headed by someone aged 65 or older, those with only a little college education, and households where family members did not live together saw their income decline from 2020 to 2021. One reason was that the fixed income many seniors did not keep pace with rising inflation in 2021, and many “non-family” households were headed by women with lower incomes. to those run by men.

Households headed by people with at least a university degree saw their overall income rise last year.

Broken down by race and ethnicity, Asian households in 2021 had the highest median income at $101,418, followed by non-Hispanic whites at $77,999 and Hispanics at $57,981. Black households had a median income of $48,297.

Median incomes were highest in the West at $79,430 and the Northeast at $77,472, followed by the Midwest at $71,129 and the South at $63,368.

The current population survey period covered the third round of pandemic-related stimulus payments and extensions to the Child Tax Credit, Earned Income Tax Credit and Child Care Credit. children and dependents. The survey period also saw a 4.7% increase in consumer prices, the largest annual increase in the cost of living adjustment since 1990.

Inflation rose 0.1% in August despite a sharp drop in gasoline prices, according to the Consumer Price Index report released on Tuesday. Although it may not seem like much, inflation affects our daily lives. Lori Bettinger, president of Bancalliance and former director of TARP, joins LX News to discuss the exact impact of this increase in inflation on your daily expenses.

The expansion of the Child Tax Credit has helped reduce child poverty, as measured by the bureau’s Supplementary Poverty Measure, from 9.7% in 2020 to 5.2% last year. This is the lowest since the new measure was introduced in 2009.

“The new data show the significant impact that the expansion of anti-poverty programs during the COVID-19 pandemic has had on reducing child poverty,” the Census Bureau said in a report.

The pandemic-related stimulus has also helped the general population.

The Census Bureau calculates poverty in two ways: the “official” poverty rate and the Supplemental Poverty Measure, which incorporates government programs designed to help low-income families. Last year, the official poverty rate was 11.6%, or 37.9 million people, and it was not statistically different from what it was in 2020. The supplementary measure of poverty last year was 7.8%, a drop of 1.4 percentage points from 2020 and the lowest in the dozen years it has been calculated.

The differences between the two rates are attributable to the federal government’s pandemic aid, with extensions of refundable tax credits keeping 9.6 million people out of poverty and stimulus payments doing the same for 8.9 million. of people, according to the Census Bureau report.

NBC Chicago

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