Here & Now

Noon Wednesday: How 2020 Income and Poverty Shape Policy

Marisa Wojcik:

Welcome to “Noon Wednesday,” I’m Marisa Wojcik, multimedia journalist with Here & Now on PBS Wisconsin. Today is September 29. Recently released census date on income and poverty in the pandemic sheds light on how the impact of safety net programs and how some lawmakers are shaping future policies. Joining me today to discuss this further is Tamarine Cornelius, research analyst for children’s advocacy nonprofit, Kids Forward, and Tamarine, thank you so much for joining us.

Tamarine Cornelius:

Thanks for having me.

Marisa Wojcik:

So, to start, the census bureau reports that even during this volatile economic time, the stimulus checks, for example, sent to people during 2020 brought 11.7 million people out of poverty nationwide. So, do we have an understanding of what that translates to in Wisconsin?

Tamarine Cornelius:

So, the census bureau just released some new numbers on poverty nationwide. This particular data release doesn’t have good statewide numbers because of the size of the survey, but we still know what the national numbers look like, and there’s no reason to think that Wisconsin would look different in trends than the national trend, and so the national trend is that the vigorous and extensive government support that was provided in 2020 to cushion the worst economic effects of the pandemic made a really significant difference in people’s lives and well-being. What the numbers show is that government aide, including things like the stimulus checks and refundable credits and snap and housing assistance, they lifted 53 million people out of poverty last year, and, in fact, when you count these types of government support that were put in place during the pandemic, the poverty rate actually decreased from 2019 to 2020. If you don’t count allthat aide, then the poverty rate really increased, and, what this is showing is that these substantial investments that the government made lifted people up out of poverty.

Marisa Wojcik:

So, what you’re saying is technically the numbers do show, in some ways, that poverty increased, but those rates don’t reflect aide included from the temporary government programs enacted in the wake of the pandemic, so overall, millions were lifted out of poverty when those programs were factored in, is that right?

Tamarine Cornelius:

Right. The official poverty measure, which is pretty flawed, it doesn’t count a lot of types of government assistance, and so in 2020, that meant it was, you know, almost irrelevant because it didn’t — it — or less relevant because it didn’t count these very important lifelines for families, so when we do include those, there’s an alternate ways of measuring poverty that does include those, and when we do include those, we can see that, you know, how that translated, and so you mentioned that between 11 million and 12 million people were lifted out of poverty through the stimulus tax, and another 5 million to 6 million people are lifted out of poverty based on unemployment benefits, so those policies that were put in place in 2020 translated into, you know, millions of people doing better last year.

Marisa Wojcik:

And additionally, hunger did not rise in 2020, which some are saying is another marker. So, all of this seems to imply that these short-term safety net programs, which are now expiring, were effective for their purposes of keeping the economy stable, so now democrats in congress are currently trying to pass permanent versions of these programs. Do these permanent programs make sense given that even just for one year, they had trillions of dollars in price tags?

Tamarine Cornelius:

Let me actually go back one second first and then answer this question, which is the other point I want to make about these poverty rates is they are one annual figure, and they do not reflect the rollercoaster of a year that a lot of families had. You know, waiting maybe months to see if their unemployment checks would clear or if their stimulus checks were going to come. That’s not to say there was not hardship. There was a lot of hardship in 2020. The other thing is that even though the government support lifted a lot of families out of poverty, we still have much higher rates of poverty for Black and Latino families due to historic and current discrimination in our workplaces and our schools and our communities also. For the question, you know, does the price tag make sense? Is it worth it, basically, as we go forward, to try to make some of these policies permanent? So, I think there’s two answers to that. One is that, you know, can we look for offsets to lower the costs? So, in the build back better package, which is before congress right now, and this is a package of investments in the work force and in our schools and communities and families, and it includes, for example, a long-term extension of the expanded child tax credit that many of us are benefiting from right now. That package wouldn’t add to the deficit very much, even though it is very significant, because it also includes things that reduce the costs by increasing taxes on the very wealthy and profitable corporations, asking them to pay their fair share in taxes. That’s a way to lower the cost, but I think the bigger answer to the question, is it worth it, is, you know, how can we not do it almost? Because we know that growing these — especially when it comes to investments in children. If a kid grows up in poverty, that is stressful, and that stress has long-term effects on that kid’s life, and if we make a target investment that lifts that kid up out of poverty, there’s a whole host of positive benefits. The kid is more likely to graduate from high school, get better grades, go to college, hold down a better paying job as an adult, be healthy, contribute to their community in other ways, and so when we say, “is it worth it to make this investment,” the investment that we make, especially in children in lifting them up out of poverty, it really has fabulous long-term, positive returns, and so if we don’t make that, then we’re really cheating ourself out of a better future.

Marisa Wojcik:

And that part about taxing people who are wealthier, taxing corporations, that is controversial and why many conservatives and republicans are pushing back against that way of balancing that budget. Overall, median income fell as many jobs were lost. Republicans, incoming Wisconsin lawmakers, are arguing that economic aid and extensions of unemployment insurance, for example, are disincentivizing people from working, including now, and is that true, and can we expect income levels to rise as jobs are coming back?

Tamarine Cornelius:

So, we had a little bit of a natural experiment here because some states — so during the pandemic, there were three ways the federal government expanded unemployment benefits. Number one, they put more in each check, so you got more money in your pocket. They added more weeks, longer duration, and they also expanded the type of workers who could get unemployment benefits. Many — some states ended their expanded benefits early. So, researchers have looked at states that ended their expanded benefits early and states that didn’t end their expanded benefits early to see what the difference is in terms of whether it made a significant difference in the labor force, and it made only a small difference. It wasn’t a significant — it was not the biggest factor. So, I think that — and we can see that in Wisconsin because our expanded benefits have ended now as well, and we’re not — I don’t think that’s really translating to employers having an easier time finding people right away, right? So, there’s a couple things that we can do to help ease that pinch. I mean, one is to beat the pandemic. We’re still in a pandemic, and there’s still dangerous jobs that people don’t want to go to. Another thing is to make sure that we strengthen our childcare system because a lot of people — the childcare system was significantly disrupted during the pandemic, and if people don’t have childcare, people can’t go to work, and also to make sure that we have, like, public transportation systems that can connect people to work. In terms of, you know, our — where our incomes will be probably over time, I think that is still shaking out in terms of what the recovery of the pandemic is going to look like. To some extent, you know, the job losses were among lower paid workers, and they — those have been a little slower to recover, and so we have a little bit of, like, a k-shaped recovery happening where the people at the top, their incomes continue to go up, and the people on the bottom, you know, they are not making the same type of recovery, and so — and with so much uncertainty still about where — how the pandemic is — where the pandemic is going, I don’t think there’s a solid answer on, you know, what we can expect people’s incomes to look like in the future.

Marisa Wojcik:

When we last spoke, it was about the expanded child tax credit under the American Rescue Plan, and democrats want to make that permanent. This is a popular addition to the American Rescue Plan, and repeatedly, democrats said this would lift children out of poverty significantly, and when you talk about, you know, people not being able to go back to work because of childcare issues or Black and Latino populations being impacted disproportionally, would things like an expanded child tax credit or more support for children make a longer-term impact and also help people more at the bottom levels of the income scale?

Tamarine Cornelius:

Those types of improvements would help everybody. You know, everybody needs childcare, and nearly everyone is benefiting — or many people are benefiting from the child tax credit expansion. It also especially helps people with lowest incomes. There was an improvement to the child tax credit in addition to the part where you actually get the checks, that it used to be that people with the lowest incomes actually did not qualify for the child tax credit at all, and so — and that was changed as part of this improvement, and so, you know, if we can make that change permanent, then we can help families get food on the table, and while it benefits everybody, it especially benefits those who need it the most.

Marisa Wojcik:

So out of everything that’s in the reconciliation bill, this Building Back Better bill, it does have a lot of extremely progressive policies, which is making some more moderate democrats and especially conservatives a little less interested in participating or voting for it. Is something like supporting expanded child tax credit or other things that are going to help childcare, child longevity, are those things a little bit more politically viable?

Tamarine Cornelius:

Well, the Build Back Better is definitely a bold move, right? I mean, it’s a bold, ambitious package. You know, is it possible to pull out pieces? I mean, I have not heard a lot of republican support for this expanded child tax credit. I don’t know if pulling things out would really be a successful strategy because of the limited support so I haven’t heard a lot of effort to do that, and I don’t know whether it would work. Yeah.

Marisa Wojcik:

Also, in the congressional sight line is ways to fill gap for states that have not expanded Medicaid, and this includes Wisconsin. There re 12 GOP Controlled states that have not expanded Medicaid, and so this bill would try to bridge those gaps with maybe expanding Medicare. Could this have an impact on long-term rates of poverty?

Tamarine Cornelius:

Well, it could definitely reduce hardship in Wisconsin and in other states that have an expanded Medicaid. So, congress is looking at creating a federally run Medicaid-like insurance program that people living in states that haven’t expanded Medicaid could access. That’s states like Wisconsin, which despite billions in financial incentives and also the ability to give more people access to health insurance, have declined that option. What this proposal would do would give people who, through the actions of the state legislature, have been denied access to affordable, quality insurance a new route to get there, and that could help their, you know, economic well-being by reducing medical costs by just giving them better access to healthcare.

Marisa Wojcik:

And in the midst of a pandemic, have we learned about how much that is needed given greater need for access to healthcare?

Tamarine Cornelius:

Right. I think the pandemic, you know, showed the limitations of a lot of our systems, including our healthcare systems so that you had to be working, or for many people, you have to be working to get access to healthcare. That’s the primary way people get access to health insurance, and if you’re not working, then that’s more difficult to get access to that. And, also, our lack of paid leave, although we temporarily had paid leave during the pandemic, but a lack of permanent paid leave, so when people were out of work because they had COVID or, you know, caring for somebody with COVID, without a permanent paid leave, you know, policy in place, those people risk losing their jobs and risk financial hardship as well.

Marisa Wojcik:

So, when you were looking at the data, and as a research analyst when youre look at more data that will be coming, in terms of trends and how this will illuminate policy choices and policy approaches, what are you specifically looking for, especially when we kind of consider the very unique time of the pandemic and ways it has showed us how these systems interact with different circumstances?

Tamarine Cornelius:

Well, the pandemic throughout the data collection processes timeline for these surveys for the census bureau, so that’s a little out of whack. Hopefully, temporarily, but I think that we’ll know — we’ll have Wisconsin specific figures, hopefully, later this fall, which we usually get right now, so that will — could show us what — how Wisconsin is fairing, and then I think another thing to keep an eye on is the changes in well-being for Black and Latinx and Native American and white and Asian families compared to each other so we can be sure as we put policies into place, they are getting to who needs it the most. You know, they can help everybody, but make sure we are also targeted, and then the other thing is that we — the child tax credit really has been an enormous success in lifting kids out of poverty, and in Wisconsin alone, we lifted more than 40,000 kids out of poverty, and so that’s more — you could fill every seat in American Family Field and more with the number of kids lifted out of poverty in Wisconsin, temporarily, and so, you know, what do we do with that information? That we temporarily made a really significant difference in the lives of these children and these families that is very positive, but that change is going to end, and how do we take that information and use it to shape our future policies?

Marisa Wojcik:

All right. We need to leave it there. Tamarine Cornelius of Kids Forward, thank you so much for joining us.

Tamarine Cornelius:

Thanks.

Marisa Wojcik:

For more from “Here & Now” and PBS Wisconsin, you can visit pbswisconsin.org, and thank you so much for joining us on “Noon Wednesday.”