New census data show Ohioans still need a robust federal recovery package
The COVID-19 pandemic recession proved that government can be the most effective tool in making sure all people are cared for, no matter their race or what’s in their bank account. With the economic loss and hardship of COVID-19 and its new variants far from over, many Ohioans — particularly those of color and those with low incomes — are still struggling to make ends meet. New data from the U.S. Census Bureau confirm that the need for strong public investments to increase shared prosperity, protect families and reduce racial and economic inequalities remains as critical today as it was a year ago.
Federal legislation such as the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security (CARES) Act softened some of COVID’s impact. By strengthening programs such as unemployment insurance, nutrition assistance, Medicaid coverage and paid sick leave, federal leaders used our shared resources to alleviate some pandemic-related economic suffering. Now, we need more federal action to tackle long-standing economic hardship and inequity that predated COVID-19.
Poverty across the nation and in Ohio
The official national poverty rate increased in 2020. This is not unexpected given the hardships people endured. Last year marks the first increase in the overall national poverty rate after five consecutive years of decline.
Yet when the relief and recovery supports from the federal government are considered, measured through the Supplemental Poverty Measure (SPM) — which broadens the official poverty measure by accounting for the value of non-cash government transfers, taxes and necessary expenses into the reported resources a family has available to meet its basic needs — poverty actually fell in 2020, by 2.6 percentage points. Had it not been for government action, far more Americans wouldn’t have been able to make ends meet.
Government action made the difference
- When accounting for government aid, the national SPM dropped to 9.1%, 2.6 percentage points lower than in 2019, and the lowest recorded SPM since 2009. The SPM was also lower than the official poverty rate by 2.3 percentage points in 2020.
- In Ohio, the 2020 SPM was 9.3%, 3.1 points less than 12.4% in 2019.
- Federal economic relief legislation such as stimulus checks helped to propel an estimated 11.7 million people out of poverty. Without it, the SPM would have increased by 3.6%.
- Other programs such as social security — one of the most crucial anti-poverty programs — helped to keep an estimated 26.5 million out of poverty. Expanded unemployment insurance benefits helped keep 5.5 million people out of poverty in 2020.
- Work expenses such as childcare, and medical expenses exacerbated by the pandemic pushed more people toward poverty but the effects were mitigated by substantial federal relief.
Without government action, suffering would have been worse
- Last year, not accounting for government aid, 11.4% of Americans lived below the official poverty line ($26,496 for a family of 4) — an increase of 1 percentage point over 2019, when the poverty rate was 10.5%.
- In 2020, an estimated 37.2 million Americans were in poverty, 3.2 million more than in 2019 (34 million).
- Poverty rates for white people and Latinx Americans rose last year. In 2020, 8.2% of white people lived in poverty, as did 17% of Latinx Americans — referred to in official census data as “Hispanic.”
- Poverty rates held steady for Black Americans and Asian Americans. Black people experienced the highest poverty rate of any racial group: 19.5%. Asian Americans had a poverty rate of 8.1%,
- Children 18 and under (16.1%) and those between the ages of 18 and 64 (10.4%) both experienced increased poverty rates from their 2019 numbers.
Ohioans still need relief
Typically, the Census Bureau releases state level poverty and income data through the American Community Survey (ACS), a tool used to provide information on the economic conditions of people living in states and communities. This year, however, due to overwhelming data collection issues as a result of the pandemic, the bureau said the data are too unreliable to release.
To get a better idea of what’s happening in Ohio, I examined data from the Census Bureau’s Household Pulse survey, which asks adults about their households. According to Ohio data from July 21-August 30, 2021:
- Twenty-nine percent of adults in households with children reported having some difficulty paying for usual household expenses.
- Eight percent of adults in households with children reported sometimes or often not having enough to eat in the last week.
Government aid boosted incomes
Since the pandemic pushed so many people out of the workforce, incomes took a hit. Yet again, government aid helped people get by, even during an extremely challenging time.
- According to national data from the Current Population Survey, the median U.S. household income fell from $69,560 in 2019 to $67,521 in 2020 (a 2.9% drop). It was the first real (inflation-adjusted) decline since 2011, a result of the COVID-19 recession, which was one of the deepest and most unequal in U.S. history.
- Families experienced slightly larger losses in income compared to their household counterparts without children. Real median income decreased by 3.2% compared to 2019 for family households and decreased by 3.1% for nonfamily households.
- Nationally, the 2020 real median incomes of non-Hispanic white (-2.7%), Asian (-4.5%), and Hispanic (-2.7%) households decreased from their 2019 levels, while Black Americans saw no significant change from their 2019 incomes.
- COVID-19 relief funds, like Pandemic Unemployment Compensation, helped keep households across the country out of poverty. The SPM of real median household incomes, which accounts for this type of government aid, increased by 4.0% from 2019 to 2020. Unemployment compensation allowed individuals and families to maintain household expenses and provide for necessities such as food.
COVID’s impact on working people
Data painted a contradictory picture, showing mass layoffs as well as an increase in median wages. However, in this case, an increase in the median wage does not mark an improvement in wellbeing. Low-paid workers were disproportionately laid off due to COVID-19, so the higher median wage is actually a troubling indicator that represents a different and better-paid group of Ohioans. The pandemic dealt a harsh blow to people who already weren’t paid enough to get by.
- Overall, the number of those who worked full-time, year-round decreased by 13.7 million from 2019 to 2020, the largest yearly decline since 1967, the first year when comparable data were kept.
- Real median earnings of those who worked full-time, year-round in 2020 rose 6.9% from 2019, due to low paid workers being taken out of the wage pool.
- Real median earnings for men increased by 5.6% ($61,417) from 2019.
- Women’s real median earnings increased by 6.5% in 2020.
In Ohio, as in the nation, 2020 wages were distorted upward due to low-income earners suffering disproportionate job loss. Workers in industries hardest hit by the pandemic — leisure and hospitality industries, and food service — lost their jobs at high rates, and experienced hardships that were exacerbated by COVID-19. Ohio had 269,000 fewer jobs by July 2021 than in February 2020. Ohio women lost progress toward equal workforce participation and pay equity, and COVID-19 disproportionately destroyed jobs held by Ohioans of color.
Government can build an inclusive recovery
Before the pandemic, the wealthiest people were hoarding more and more of the resources while wages for most were held flat or pushed down. Years of longstanding policies and practices exploited the labor of Black and brown people while excluding them from opportunities. The shock of the COVID-19 recession moved elected leaders to use the power of the government to care for people, instead of further enriching the wealthy few and corporations. But now, the sudden end of federal jobless benefits has left millions out of work with no income. These benefits lasted less time than those after the Great Recession. In the months ahead, federal and state lawmakers can put forward meaningful and lasting policy solutions.
So far, federal lawmakers have done the most to support people during COVID, but they can do much more by passing the Build Back Better legislation. The final bill must strengthen the nation’s weak unemployment insurance system, close the Medicaid coverage gap, expand affordable housing, and make the full Child Tax Credit permanent for families with low or no earnings. Congress can fund the Build Back Better plan by closing loopholes that allow the wealthiest individuals and corporations to pay little or no federal income tax, and by strengthening IRS enforcement to ensure those at the top pay what they owe. Lawmakers must meet the demands of the moment by advancing bold policies. They can create an economic recovery that extends to all people by targeting aid efforts and directing public resources to those individuals and communities who have been traditionally excluded from opportunity and are most in need due to COVID-19 and the subsequent economic crisis.
Even though federal aid helped Ohioans overcome many of these pandemic-related hardships, many state lawmakers chose to take steps backwards during the pandemic. The legislature stripped Gov. Mike DeWine and local counties of their power to issue public health orders to protect Ohioans from the spread of COVID-19, which this month surged to pre-vaccine levels of January. Gov. DeWine blocked Ohioans whose jobs were destroyed by COIVD-19 from receiving $300 weekly federal unemployment benefits, which will cost Ohio an estimated $1 billion. The DeWine Administration chose to misspend stimulus dollars by directing $1.5 billion to bail out the unemployment trust fund that was never adequately funded. This bailout will allow businesses to avoid a small tax increase in 2023, at the expense of vital direct support that is needed by working people and their families now
Last week’s census data confirm that in the face of historic challenges, we can use good government and policy to overcome such setbacks, if only policymakers are willing. Federal, state and local policymakers must meet this moment with policies to grow our economy, restore jobs, protect Ohioans at work and drive a robust recovery that includes everyone.