Why child poverty spiked in the US

Thursday, September 21, 2023:

Hi everyone,

Once again, it's Future Perfect fellow Rachel, and today I am excited to share with you a piece from one of the other great Future Perfect fellows, Oshan Jarow.

Here's what we're talking about:

Up first: Child poverty's historic drop and resurgence in the US

In other news: Murdoch, GoT v. ChatGPT, and free Covid tests

UP FIRST

We cut child poverty to historic lows, then let it rebound faster than ever before

Alex Wong/Getty Images

A pandemic-era policy expansion kept millions of children out of poverty until Congress let it expire. In 2021, expansions to the child tax credit (CTC) allowed parents, regardless of whether they had an income or not, to receive monthly payments intended to help them support their household. In 2022, Congress did not extend the program.

The lowdown: In 2021 (when the policy was in effect), the child poverty rate dropped to its lowest point on record: 5.2 percent, meaning 3.8 million American children lived below the federal poverty line. Then, in 2022 (when the policy expired), the rate experienced the steepest rise in its history: 139 percent. This means 9 million American children were living in poverty.

The 2021 policy expansion contained a key innovation. In the 2021 update, Congress did away with the income requirements that kept full benefits from reaching 19 million of the poorest American children whose parents had little or no earnings.
Congressional critics of the expansion said parents were spending the money on the wrong things and that it made people lazy. Sen. Joe Manchin (D-WV) cast the swing vote that ended the policy; he claimed (incorrectly) that poor people spend extra cash on drugs. Other critics in Congress said giving poor people money without making them also work leads to people quitting their jobs (despite evidence saying otherwise).
In the absence of federal action, states are stepping up. Since the expanded CTC expired two years ago, 11 states have passed versions of the program that do not carry income requirements.

The stakes: Who loses when fewer parents have access to this federal support? American children. In 2021, parents receiving money through the expanded CTC were found to have primarily spent it on food, clothes, utilities, rent, and education costs. Households left without this money leave children without baths, school supplies, and food.

While the success of the expanded CTC may have been short-lived, it does show that federal welfare programs that include everyone (and not just the working poor) can make a difference in American poverty rates, writes Oshan.

And there's some hope that the CTC could be expanded once more, at least at the state level. Oshan told me, "There are already plenty of Republicans at the state level on board with the idea, and with poverty numbers like those just released, the urgency is staring us in the face."

Read Oshan's full story here »

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NEXT UP

Rupert Murdoch steps down

Victoria Jones/PA Images via Getty Images

This morning, Fox Corporation and News Corp announced their founder, 92-year-old billionaire and media tycoon Rupert Murdoch, will be stepping down as chairman of the board come November. He will hold the title of chairman emeritus at both companies.

"Our companies are in robust health, as am I," Murdoch wrote in his note to employees. [CNBC]
Despite this claim, Murdoch's decision comes on the heels of a tumultuous time for Fox. Under Murdoch's leadership, Fox News echoed costly falsehoods about election fraud, which ultimately culminated in Fox Corporation paying $787 million in a defamation settlement with Dominion Voting Systems. And more lawsuits are on the horizon. [CNN]
Rupert's son, Lachlan Murdoch, will become sole chairman of News Corp and will continue as Fox Corporation's executive chair and CEO following his father's departure. Lachlan rejoined his father's business in 2014 after abruptly resigning from News Corp in 2005. [BBC]
It's not clear how much or how little will change following Murdoch's stepping down. In the same memo where Murdoch announced his departure, he also indicated he'd still be keeping a critical eye on the company's output, Vox senior correspondent Peter Kafka writes. [Vox]

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