The pandemic marked a sea-change in the way the federal and other local governments responded to national calamities. For the first time, the federal government moved in with massive stimulus checks and unemployment aid. These poverty alleviation measures led to an overall fall in poverty levels in 2020.
After accounting for pandemic relief aid the poverty rate fell below 10% to 9.1% in 2020. This surprising decline was largely due to the swift and substantial federal relief that Congress, enacted at the start of the pandemic to prevent widespread financial hardship. This helped control the worst economic crisis that the US has faced since the Great Depression almost a century ago.
Over 8.5 million people emerged out of the clutches of poverty in 2020. This came even as federal, state, and local government relief continue for the next couple of years till 2022. Poverty in the US is defined as a family of 4 surviving on less than an income of $26,250.
While it was recognized universally as a phenomenal result, a lot of the aid that made the difference was not extended. And it has hit families with children, especially hard.
The abrupt withdrawal by the federal government after 2021 was troubling and stalled the recovery process. Hispanic and Black women continue to lag behind the most in the recovery process along with Americans who lack college degrees.
A strong job gain thanks to the economic recovery led to better-paid jobs in 2021. But this progress was largely negated as rising prices as indicated by record inflation figures led to negative wage growth in real terms in 2022.
Federal Government Fails To Deliver After 2021: State And Local Stimulus Checks Prove Inadequate
The extensive federal relief measures enacted immediately after the pandemic is widely credited by policy experts and economists with preventing a second Great Depression and another Great Recession. Studying the individual program, the stimulus checks alone have succeeded in lifting 11.7 million out of poverty, according to census figures.
And along with that, enhanced unemployed aid prevented 5.5 million people from falling into poverty. For the first time in years, hunger did not rise during 2020, the peak pandemic year.
The most spectacular progress was seen thanks to the enhanced version of the Child Tax Credit stimulus check in the last two quarters of 2021. For the first time, the CTC payments were given as an advance in the tax year itself, and they came in as monthly stimulus checks from July through December 2021.
But all federal payments stopped after 2021. While the inflation relief payments enabled by around twenty-one states helped to arrest the extent, it was not able to manage the scale of help enabled by the federal agencies.
2023 Marked By Local Poverty Alleviating Measures
The federal government responded significantly and sharply in 2020 and 2021. And it remains clear that such efforts prevented a substantial rise in poverty. But 2022 was different and in the present year, the concern remains that there would be a rise in poverty for the second time as relief packages have expired.
California has been at the forefront of pandemic aid, and it was the first state to give out stimulus checks to residents even when the federal programs were active in 2021.
In 2023, it again enabled the Middle-Class Tax Refund that gave residents up to $1,050 as inflation relief to around 26 million residents, or around 65% of the state population.
But the payments were in 2022, and it was extended to March 2023 because of delays in debit card payments. But Los Angeles is among the few cities that have taken a major step forward and launched BREATHE, LA County’s Guaranteed Income Program which is part of the Californian city’s Poverty Alleviation Initiative.
A thousand residents were selected and are set to receive a stimulus check of $1,000 a month for the next three years. The programs include residents who speak various languages and are from all over the country in the age group of eighteen to ninety-one.
Holly Mitchell, the Chairperson of the LA County Board of Supervisors said that she looks forward to the lessons learned about the way public investments that trust constituents can keep residents fed and housed and in a position to invest in the future of themselves and their community.
Over 180,000 residents of Los Angeles County applied, and one thousand residents were selected randomly from the Pennsylvania University’s Center for Guaranteed Income. The center has stated that his opportunity will enable to make further research in guaranteed income programs across America.
With such a huge number of applicants, it is apparent that guaranteed basic income is an idea that has immense possibility. Such stimulus checks regularly can give people financial breathing room. It permits them to stabilize their lives and that of their family.
Authors Of Program Believe That The La Stimulus Check Can Be Scaled Up Across The US
The authors of the program are confident that in a space of three years, the stimulus check program will serve as a stepping stone that will lead to expanded aid programs. It is slated to provide economic opportunities and bring stability to every eligible household across the US.
A first-hand account of the life-changing impact of such stimulus checks has shown that many had been able to reach their financial and personal goals and improve the quality of their life for themselves and their families.
The cooperation between the LA administration and the grassroots organization involved in the program has helped bridge the gap that exists between residents and the opportunity to apply for the BREATHE program using their strong ties to the communities.
Such partnership between non-profits and the administration has made the onboarding and enrollment process more accessible and has enabled access to various communities and residents across Los Angeles County.
This is especially evident among the Black and Hispanic communities and single mothers. The authorities and the Board of Supervisors and LA County have committed to helping more county residents and extricating them from poverty.