Poverty in the United States is increasing.
(Photo: AP)
Washington In the USA, the poverty rate has risen again for the first time in two years. The American census office published new figures for 2022 on Tuesday, some of which show dramatic shifts.
Accordingly, the inflation-adjusted median household income in the USA was $74,580 last year. That is 2.3 percent less in 2021 – and almost five percent than before the outbreak of the corona pandemic.
The so-called poverty rate – the proportion of households that earn less than $35,000 a year – rose from 7.8 percent in 2021 to 12.4 percent. According to the census office, this was the largest increase in a year to date. Child poverty doubled to 12.4 percent after falling to a record low of 5.2 percent in 2021.
During the corona pandemic, the US Congress passed several aid packages worth billions. Millions of households were able to receive emergency aid and direct payments, and unemployment benefits, food subsidies and rent support were increased. Families in particular benefited from this, because an expanded child tax credit, a type of child benefit, offered families with children a guaranteed additional income for a short time.
US President Joe Biden originally wanted to maintain this child benefit permanently, but there was no majority in Congress for this. In 2022, a large part of the Corona aid expired and was not extended, and the additional safety net during the pandemic was scaled back. The effects are now reflected in the current poverty report.
The job market in the USA is actually booming and economic growth is at a high level compared to other countries. But at the same time, as in Europe, the cost of living has risen. The upswing doesn’t seem to be reaching many people – which could explain why Biden is a rather unpopular US president. One lesson that can be derived from the report: Inflation, which has been rising rapidly in the meantime, appears to be torpedoing the positive effects of the job boom and higher wages.
Inflation hits the middle class
According to the report, the higher prices not only affect people who were already at risk of poverty before the rise in inflation, but also the American middle class, which is a particularly important group of voters for Biden.
In August, people in the city in California tried to protect themselves as best they could from Tropical Storm Hilary.
(Photo: AP)
The White House spoke on Tuesday of the “terrible consequences” of the decision to let Corona aid expire. “Last year, Republicans in Congress insisted on raising taxes on families with children,” Biden said.
“The rise in child poverty is no coincidence – it is the result of a conscious policy decision by Republicans to block aid to families with children while pushing for massive tax cuts for the richest and largest corporations,” the president said.
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