Why Did Official Poverty Rate Rise if COVID Relief Took More Out of Poverty Than Ever?

America's official poverty rate jumped to 11.4 percent in 2020, up nearly a full point from the 10.5 percent rate posted in 2019, according to the U.S. Census Income and Poverty in the United States: 2020 report.

Children were hit particularly hard by the economic downturn as the poverty rate for people under 18 rose from 14.4 percent in 2019 to 16.1 percent in 2020.

According to the report, which was posted by the Census on Tuesday, it's the first increase in the official poverty rate over the last five years, as approximately 3.3 million new people found themselves living in poverty, bringing the total to 37.2 million.

Despite levels of official poverty experiencing a rise, stimulus payments were able to offset some of the damage with pandemic relief checks helping to carry 11.7 million individuals out of poverty, the report said. However, that figure isn't calculated into the Census' official measure.

The Supplemental Poverty Measure (SPM), which gauges poverty levels seen after the distribution of government relief, experienced a drop. In 2020, the SPM rate fell to 9.1 percent, down from the 11.8 posted in 2019. The number shows that relief measures played a key role in keeping a number of people out of poverty. When assessing efforts over the last year, some see this as the true measure of America's success.

"This year's Census Bureau's report that poverty increased one percentage point further demonstrates that the official poverty measure is outdated and cannot be used to examine public policy," David Johnson, director of the Panel Study of Income Dynamics and a public policy professor at the University of Michigan, told Newsweek. "Many of the poverty reduction policies are excluded from the (official) poverty measure and their impact cannot be evaluated."

Johnson brought up that the official measure has not been updated since the Census started publishing poverty estimates in the 1960s. Because the official measure only accounts for cash income, it includes income from social security and unemployment insurance but negates refundable tax credits, nutrition assistance benefits, and women infant and children benefits. Further, the official measure does not include last year's stimulus payments.

It wasn't until 2009 that the Census introduced the supplemental measure. Analyzing the American poverty through the SPM paints a different picture of America's situation. According to the SPM rate, poverty in the U.S. posted its lowest rate since the measure's introduction in 2009.

"This is what I meant by the official poverty measure cannot be used to examine policy since many of the poverty reduction policies are excluded from the poverty measure and their impact cannot be evaluated," Johnson told Newsweek.

With President Joe Biden aiming to introduce universal pre-K, allow two years of free community college, lower prescription drug prices, and expand Medicare through his $3.5 trillion budget plan, the official poverty measure could become less reflective of the government's role in America's social safety nets if Democrats unite in passing the measure.