Without Additional Support, Nearly Four Million Children Younger Than 6 Will Experience Poverty This Fall

By Ilham Dehry, Urban Institute

The COVID-19 crisis is taking a huge toll on families’ economic security, particularly for families of color and families with children. Early childhood poverty can shape health and social outcomes for decades, which makes supporting families with young children urgent and critical.

Though federal aid earlier in the year provided some much-needed relief, the benefits were short-lived, and several of the key provisions have since expired. Many families spent through their initial stimulus payments, and the $600 weekly supplement to unemployment insurance benefit ended in July.

Without additional action to support families with young children, we project 3.9 million children younger than 6 years old will experience poverty in August to December of this year.

By our measure, adopting just three provisions from the Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act could have kept 1.5 million young children from poverty over this period. We measure poverty using the official poverty threshold but count the value of Supplemental Nutrition Assistance Program (SNAP) benefits, as well as the value of proposed stimulus payments beyond the payments enacted in spring. As such, our poverty measure is somewhat lower than the official poverty measure. Those policies include the following:

  • extending the supplemental $600 per week unemployment benefit
  • increasing SNAP benefits
  • providing and expanding eligibility for a second stimulus payment

Adding a third stimulus payment (which aligns with initiatives to provide greater financial assistance during this economic crisis) could have kept an additional 700 thousand children out of poverty, for a total of 2.2 million fewer young children in poverty in the last part of the year.

These provisions could have benefited families across racial and ethnic groups. Combined, they could have reduced young child poverty by half.

Additional pandemic aid could have provided critical support to families with young children

Legislators’ failure to pass preventative policies translates to more children in poverty through the end of the year. The projected poverty rate for young children could have dropped from 16.8 to 10.4 percent through December of this year had HEROES Act policies been implemented in August. The combined HEROES policies and additional stimulus payment could have reduced poverty to 7.5 percent during the same period.

Further pandemic aid could have helped families feed their children and keep up with their bills. Instead, families with young children will continue to face significant financial hardship, on top of concerns over their families health and well-being (PDF).

Young Black and Hispanic children are suffering disproportionately during the pandemic

Inaction has had the greatest consequences for young Black and Hispanic children. Without further support at the end of the summer, 30.5 percent of young Black children and 23.6 percent of young Hispanic children are projected to experience poverty from August to December. If HEROES policies had been adopted in August, those shares would have been 19.9 and 14.6 percent. And in all policy scenarios, young Black and Hispanic children are projected to experience poverty at a significantly higher rate than the national total.

These disparities are part of a larger context in which families of color have faced harsher economic conditions, both before and during the pandemic. The pandemic’s effects and barriers to equal wealth accumulation from decades of racist policies and practices leave Black and Hispanic parents more likely to struggle to make ends meet during an economic crisis. And systemic occupational segregation has increased the likelihood that parents of color are the ones working essential jobs. During a time when child care centers are closing, families will likely be forced to choose between income security and their child’s well-being.

Additional aid will be necessary to alleviate young child poverty

Families need continued support as they navigate employment, child care options, and ways to ensure the health and well-being of their young children. Absent additional federal pandemic aid policies at the end of the summer, about one in six young children is expected to experience poverty in August through December of this year, with harsher outcomes for Black and Hispanic children. And without additional aid, the prospects for 2021 are dire. To alleviate young child poverty, policymakers will need to quickly consider new aid packages that will support families with children and should explicitly address the challenges facing people of color, who face the highest rates of economic disadvantage.

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