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Poverty Projections Illustrate Need for Federal Relief Package

A report from the Center on Budget and Policy Priorities (CBPP), “Weakening Economy, Widespread Hardship Show Urgent Need for Further Relief,” outlines the need for additional federal funding amid COVID-19. Many funding sources within the CARES Act have expired or run out of funding, and many of the lowest-income individuals were left out of the initial provisions. CBPP reports that despite recent modest economic growth, unemployment remains high and disproportionately affects low-wage workers and people of color. As a result, poverty is projected to increase from 10.5% in 2019 to 13.6% in late 2020.

The number of low-wage jobs was down 10.7% in October, compared to 5.9% of medium-wage jobs and 3.6% of high-wage jobs. Low-wage industries employ a disproportionately high number of workers of color. As a result, unemployment among Black and Latino workers has increased at a higher rate than white workers. Between February and October, unemployment rose 5.0 percentage points among Black workers, 4.4 percentage points among Latino workers, and 2.9 percentage points among white workers. Total payroll employment indicates there are 10.1 million fewer jobs today than in February at the start of the pandemic.

As relief funding runs out, an estimated 10 million people are expected to be pushed into poverty. After a historic low poverty rate of 10.5% in 2019, the poverty rate is expected to reach 13.6% by late 2020. Poverty is increasing at a higher rate for Black and Latino individuals. Between 2019 and late 2020, poverty rates are expected to increase from 18.8% to 22.5% for Black individuals and from 15.7% to 20.1% for Latino individuals. These projected rates are more than double that of white individuals, whose poverty rates are expected to increase from 9.1% in 2019 to 9.8% in 2020. Child poverty is also expected to increase, growing from 14.4% in 2019 to 19.1% in late 2020.

CBPP emphasizes that a premature end to relief during the Great Recession stunted economic growth, significantly slowing recovery. A new relief package is necessary to bolster recovery and should focus on serving those hardest hit by COVID-19, including Black and Latino households and households with children.

The report can be found at: