The end of the pandemic-era investments in the Child Tax Credit and other federal policies that help families make ends meet led to a huge increase in poverty in 2022 in California.
Nationally, 2022 marked the biggest increase in poverty in over 50 years, and California showed a similarly distressing trend. This increase marks a huge step backwards given the historic drop in child poverty in 2021 spurred by pandemic-era public investments in the Child Tax Credit (CTC) and other policies that help families make ends meet. The facts highlighted in the proceeding narrative draw on an analysis of the US Census Bureau’s Supplemental Poverty Measure to compare poverty rates from 2021 to 2022 and show how federal policy decisions have pushed more families into poverty.
Poverty Rose Dramatically, Exacerbating Racial Inequities
From 2021 to 2022, the poverty rate across all Californians increased from 11.0% to 16.4%. Among age groups, child poverty (under age 18) rose the most, with the 2022 rate over twice the rate of 2021. This increase comes after two years of declines in child poverty, illustrating a step backward in policies that support child economic well-being.
The increase in poverty was especially striking for Black and Latinx Californians whose poverty rates nearly doubled from 2021 to 2022. Since the expiration of key pandemic-era policies, recent analyses highlighted that Black and Latinx Californians have been more likely to struggle with paying basic expenses, underscoring that the end of pandemic supports have furthered racial inequities. Specifically, in 2022, nearly one in five Black Californians and more than one in five Latinx Californians are back in poverty.
Rise in Poverty Reflects End of Anti-Poverty Investments
Major pandemic-era federal policies that lifted many Californians out of poverty in 2021 — including the expanded CTC — ended in 2022. This severely weakened our system of public supports that helps families and individuals meet basic needs, pushing more Californians — particularly children as well as Black and Latinx Californians — into poverty.
Specifically, public supports cut California’s child poverty rate by more than two-thirds in 2021 when major pandemic-era policies like the expanded CTC were in place. This helped push the child poverty rate down to 7.5%. But in 2022, when those policies ended, public supports reduced the child poverty rate by only one-third, contributing to a more than doubling of the child poverty rate to 16.8% that year.
Similarly, the end of major pandemic-era federal policies also helped drive up the poverty rate for Black and Latinx Californians. While public supports cut the poverty rate for Black Californians by three-quarters to 9.5% in 2021, they only reduced poverty for Black Californians by well under half the following year, contributing to a near doubling of the poverty rate to 18.6%. For Latinx Californians, public supports cut the poverty rate by about 60% in 2021 when major pandemic-era policies were in place, but by only about 30% in 2022 after those policies ended, contributing to a substantial rise in the poverty rate from 12.6% to 21.6%.
Policymakers Can Reverse the Rise in Poverty
The dramatic rise in poverty following the end of major pandemic-era investments shows that policymakers play a significant role in determining the economic well-being of Californians. This means they can reverse the spike in poverty by investing in policies that help families and individuals meet basic needs and thrive in their communities. At the federal level, these include:
- Restoring the enhanced federal CTC and allowing all children, regardless of immigration status, to benefit;
- Strengthening SNAP nutrition assistance (CalFresh in California), including by ending harsh and arbitrary time limits that prevent certain individuals from accessing the nutrition and health benefits of the program, and ensuring equitable college student access;
- Continuing pandemic-era child care relief funds that supported providers with keeping their doors open and families with accessing affordable care.
California policymakers can also do more to cut poverty across the state, including by:
- Expanding refundable tax credits, such as California’s Earned Income Tax Credit (CalEITC) and Young Child Tax Credit;
- Ensuring that all Californians, regardless of immigration status, can benefit from supports that help families and individuals meet basic needs, such as nutrition assistance and unemployment benefits; and
- Strengthening vital supports that improve families’ economic well-being, such as by increasing the minimum CalFresh nutrition benefit and reimaging CalWORKs as a family-first, anti-racist program.