Massachusetts was one of 11 states in which an alternate measure of poverty that accounts for government stimulus and the costs of housing, commuting and medical care was higher over the last three years than the poverty rate as traditionally measured, the U.S. Census Bureau said Tuesday.
Going by the three-year average of the bureau’s official poverty rate from 2018 through 2020, about 565,000 people in Massachusetts were in poverty — equal to about 8.2 percent of the population. But going by the bureau’s supplemental poverty measure (SPM), roughly 649,000 people or 9.4 percent of the state’s population were in poverty over the same time period, according to data released Tuesday.
While the official poverty rate uses gross pre-tax cash income as its resource measurement, the SPM looks at the sum of cash income plus the value of government stimulus checks and benefits that can be used to pay for food, clothing, shelter and utilities. The SPM also subtracts taxes paid (or adds the value of tax credits), work expenses, medical expenses and child support payments.
“The SPM extends the official poverty measure by taking into account many of the government programs designed to assist low-income families and individuals that are not included in the official measure,” Liana Fox, chief of the Census Bureau’s Poverty Statistics Branch, said. “Non-cash benefits such as housing and nutritional assistance are added to pre-tax cash income, and necessary expenses such as taxes, work and medical expenses are subtracted.”
The other states in which the SPM was higher than the official poverty rate were California, Colorado, Delaware, Florida, Hawaii, Maryland, New Hampshire, New Jersey, New York and Virginia. Thirty states had SPM rates that were lower than official poverty rates and the differences in nine states were not statistically significant, the Census Bureau said.
“Higher SPM rates by state may occur for many reasons,” the Census said. “Geographic adjustments for housing costs, as well as different mixes of housing tenure, may result in higher SPM thresholds. Higher nondiscretionary expenses, such as taxes or medical expenses, may also drive higher SPM rates.”
Higher housing and medical costs are perennial topics of policy debates in Massachusetts and tax burdens here also remain a major focus, with calls for higher taxes from the left and tax reductions from the right. Gov. Charlie Baker this month flagged high housing costs as an “existential challenge” facing Massachusetts.
Nationally, the three-year average poverty rate from 2018 through 2020 was 11.2 percent by the official measure and 11.2 percent using the SPM, the Census Bureau said.
In 2020 alone, the nation’s overall SPM rate was 9.1 percent — 2.6 percentage points lower than the 2019 SPM rate of 11.8. The official poverty rate for 2020 was 11.4 percent, up 1 percentage point from 2019, and the first increase after five consecutive annual declines. However, for the first time since the SPM was put into use, its measure of poverty was lower than that of the official poverty rate.
The bureau reported Tuesday that median household income in the United States was $67,521 in 2020, a decrease of 2.9 percent from the 2019 median of $69,560.
The stimulus payments that were part of the federal government’s 2020 response to the COVID-19 pandemic played a big role in helping to drive down the SPM by moving 11.7 million people out of poverty, the Census Bureau said. Two rounds of direct cash payments went out to households in 2020, together averaging $2,400 for the 20 percent of families with the lowest incomes and $2,890 for middle-income families.
“[N]ot including stimulus payments in resources, the poverty rate for all people would have been 12.7% rather than 9.1%,” the bureau said.
The Institute on Taxation and Economic Policy also pointed to the stimulus payments as a reason why there was no commensurate spike in poverty in 2020 to go with the deepest unemployment spike since the Depression era.
“At the start of the health and economic crisis, we knew that we needed deep government investments to alleviate widespread hardship,” Aidan Davis, a senior policy analyst at ITEP, said. “Census data likely will reveal that stepped-up government investment significantly alleviated poverty … The last year and a half demonstrates that the nation can make a significant dent in poverty and improve economic livelihood for families across the country.”
On Thursday, the U.S. Census will put out local-level population and demographic data from the 2020 count of the nation’s population in an easier-to-use format. The bureau made the data available in August, but not in a user-friendly format. The data expected Thursday is said to be exactly the same as what was released more than a month ago and will be crucial as lawmakers in Massachusetts and around the country prepare to hammer out new Congressional and legislative district boundaries.
The Special Joint Committee on Redistricting, led by Assistant House Majority Michael Moran and Senate President Pro Tempore William Brownsberger, held more than 18 hearings on the redistricting process this year and could move relatively quickly to propose new district maps after the final publication of the data.
The 2020 Census counted 7,029,917 people living in Massachusetts, a 482,288-person or 7.4 percent increase over the last decade that outpaced the 4.1 percent average in the Northeast and equaled the growth rate of the country as a whole, according to the initial publication of the data.
“We’ve had significant changes within our state. We’ve seen cities grow dramatically … Many of the suburban communities grow as well,” Secretary of State William Galvin, the state’s liaison to the Census, said in August. He added, “Particularly gratifying was seeing some of the communities that we were most concerned about, where we knew there were significant populations of non-native born persons, being fully counted.”
The new population data means that Congressional districts will include 781,000 people, state Senate districts will include more than 175,000 people and state House of Representative districts will include almost 44,000 people. Galvin said meaningful changes in districts are likely, specifically mentioning the possibility of Boston gaining an additional seat in the Massachusetts House of Representatives.