The Covid-19 pandemic caused tremendous economic and personal hardship in Louisiana in 2020. Devastating job and wage losses due to the pandemic would have driven tens of thousands of our neighbors into poverty. Instead, robust government aid and a strong safety net actually lowered poverty during the pandemic, according to the latest data from the U.S. Census.
While the pandemic disrupted data collection making state level statistics unreliable, national data paints a compelling picture of how targeted and timely government assistance can help struggling families put food on the table, pay rent and weather difficult times. It also shows longstanding inequities – in income, housing, health insurance and more – that must be addressed if we are to build a more fair and equitable economy that works for everyone. The time for Congress to act is now – and we have effective policy tools that work.
In a dramatic and severe loss during the pandemic, national annual median income decreased to $67,500 in 2020, a decline of 2.9% from 2019. This is one of the steepest declines in history and was born unequally among Americans as low income households experienced the greatest loss.
Income inequality remained at an historic high in 2020 as wealth and poverty continued to concentrate and middle income households struggled to stay above water. Going into the pandemic, Louisiana had the fourth-highest level of income inequality in the nation. This wasn’t due to concentrated wealth, but concentrated poverty. We can do better.
The official poverty rate, which doesn’t account for all government aid, was 11.4% in 2020, an increase of 1 percentage point from 2019 representing 37.2 million people. While it is the longest running measure of economic hardship reported by the Census Bureau, it is also a flawed measure that routinely undercounts the number of people unable to meet their basic needs. Following a recommendation from the National Academies of Science, a new, more robust measure was introduced in 2009.
At 9.1% the Supplemental Poverty Measure, which accounts for government assistance, actually decreased by 2.7 percentage points from 2019 to 2020, falling below the official poverty measure for the first time in its history. Targeted aid, like enhanced unemployment insurance, nutrition assistance, housing assistance, and pandemic stimulus checks, played a critical role in mitigating some of the extreme harms of the pandemic.
What those numbers show is that federal safety-net programs did their job. They lift millions of Americans out of poverty every year, and last year they played a vital role in helping families through the unprecedented economic hardships caused by the pandemic. Louisianans received a total of 6.9 million stimulus checks worth $11.7 billion over three rounds of federal stimulus payments distributed between 2020 and 2021. Without these direct payments, the Supplemental Poverty Measure would have increased instead of decreasing.
Louisiana has made progress. We closed historic gaps in health insurance coverage by expanding Medicaid eligibility to low income adults in 2016. It’s an investment that continues to pay dividends. While the national health uninsured rate held steady at 8.6% in 2020, the adult uninsured rate among Medicaid Expansion states (8.9%) was about half that for non-expansion states (17.6%) continuing a trend from 2019.
We can build on our successes and the tremendous ability of targeted federal assistance to lift families out of poverty through the Build Back Better plan. We can help low- and moderate-income families make ends meet by making permanent the enhanced Child Tax Credit and Earned Income Tax Credit. We can finally deliver on the promise of family medical leave by making it paid so people can afford to take time off to care for themselves and their loved ones when they need it most. We can strengthen the nation’s weak unemployment insurance system, invest in more affordable housing, reduce food hardship and more. Together we can Invest in Louisiana and ensure every family has what they need to thrive.
-by Stacey Roussel