US poverty levels have skyrocketed during the coronavirus pandemic this year, with 7.8million Americans falling into financial hardship since this summer.
The poverty rate rose to 11.7 per cent in November, up from 9.3 per cent in June – the biggest spike in a single year since the 1960s, according to a new study by economists at the University of Chicago, Notre Dame and Zhejiang University.
The data, illustrated in a near real time ‘COVID-19 Income and Poverty Dashboard‘, shows poverty levels have fluctuated since January, with a sharp increase in the five-month period after federal unemployment benefits expired.
The study also showed that poverty rose more in states with ‘less effective unemployment insurance systems.’
‘Our estimates imply that about 39million individuals are [currently] in poverty,’ James Sullivan, an economics professor at the University of Notre Dame, told DailyMail.com on Wednesday.
‘The jump in poverty is very significant. The 2.4 percentage point rise in the five months since June is nearly double the largest annual increase in poverty since the 1960s,’ Sullivan added.
US poverty rose to 11.7% from June to November – an increase of 7.8M people, according to a new report
A ‘COVID-19 Income and Poverty Dashboard ‘shows poverty levels have fluctuated in the past 11 months, with a sharp increase in the five-month period after federal unemployment benefits expired
The researchers say the surge has ‘raised concerns about future increases in poverty’ now that unemployment aid is set to expire in December, with no clear plan for an additional economic stimulus package from the federal government.
The estimated rates illustrated on the dashboard could guide government policies and programs that help prevent people from slipping into poverty during sharp economic downturns, the authors say.
It comes after negotiations on COVID-19 relief intensified this week after months of futility.
The top four leaders of Congress met twice on Tuesday in hopes of finally cementing an agreement that would revive subsidies for businesses hit hard by the pandemic, help distribute new coronavirus vaccines, fund schools and renew soon-to-expire jobless benefits.
Both sides in Congress have shown interest a new relief package, but they’ve been unable to reach an agreement and time is running out.
House Minority Leader Kevin McCarthy gave an upbeat assessment, saying lawmakers were ‘moving in the right direction.’
Senate Majority Leader Mitch McConnell said he was ‘optimistic that we’re gonna be able to complete an understanding sometime soon,’ after ‘making significant progress.’
Adding to the poverty rate are the millions of jobs lost since the start of the pandemic. Pictured: A man wearing a mask eats part of a hot meal at the Holy Apostles Soup Kitchen on December 15, 2020
The COVID-19 pandemic has driven homelessness in NYC to record levels
The uptick in activity could be a sign that an agreement is near, though COVID-19 relief talks have been notoriously difficult.
Adding to the poverty rate are the millions of jobs lost since the start of the pandemic, during which more than 86 million people filed claims for unemployment insurance.
Currently, there are more than 10.7million Americans who are officially unemployed as well as millions of others who have not been counted, according to the report.
Early stages of the study showed the US did see a decline through June due to the one-time stimulus check issued between April and May, as well as the expansion of unemployment eligibility benefits.
‘In fact, in absence of these programs, poverty would have risen sharply,’ researchers said.
Still, the weekly unemployment claims have remained high since July, with more than 1million claims each week – five times the pre-pandemic rate.
Pressure for a COVID relief deal is intense as unemployment benefits are set to run out December 26, which will affect more than 10million Americans.
Both sides in Congress have shown interest a new relief package, but they´ve been unable to reach an agreement and time is running short
Early stages of the study showed the US did see a decline through June due to the one-time stimulus check issued between April and May
People who have exhausted their state’s unemployment benefits have been able to seek an additional 13 weeks of payments through the Pandemic Emergency Unemployment Compensation program.
Someone who uses up both of these payments may be able to apply for extended benefits, which states make available during times of high unemployment.
All states enabled extended benefits during the pandemic, but some have since ceased them because of an improvement in employment.
Additionally, the Pandemic Unemployment Assistance program – known as the PUA – allows self-employed, part-time workers and others who aren’t typically eligible for unemployment to receive payments.
It has enabled millions to get aid but those who have exhausted their PUA payments have no alternative.
The Century Foundation estimates that 12million people will be on PEUC or PUA when it expires on December 26.
The nonpartisan think tank estimates that 2.9million of those running out of PEUC will be able to collect extended benefits in 2021.
Beyond that, the foundation estimates 4.4million workers will have already exhausted benefits under the federal virus relief package before this cutoff, sending into the new year with little or no aid.
Federal eviction protection will expire as well. And student loan payments, which had been paused since March, are scheduled to resume in January.
Meanwhile, the pandemic shows no signs of abating and broad distribution of any vaccine is likely months away.
Both sides in Congress have shown interest a new relief package, they’ve been unable to reach an agreement and time is running short.
A moratorium put in place by the Centers for Disease Control in September that protects certain renters from eviction expires at the end of the year.
It only applies to renters who earn less than $99,000, or $198,00 for couples, who are unable to pay rent because of COVID-19 hardships and can affirm they would become homeless if they are evicted.
A patchwork of federal, state and local eviction moratoriums has not kept everyone from being kicked out of their home, however. The Eviction Lab at Princeton University has been tracking evictions in 27 cities and says more than 151,000 evictions have taken place during the pandemic.
Experts are expecting a wave of evictions ahead as moratoriums expire and back rent becomes due.