Expiring Government Covid Programs Causes Decreasing SPM

The United States already had the highest rate of child poverty compared to other wealthy, developed nations. According to the most recent data from the Organization for Economic Co-Operation and Development (OECD). The U.S. child poverty rate was 20.8 percent, and the average for similar countries excluding the United States was 11.2 percent using data from 2022 (or the most recent data available for a country).

Expiring government programs has caused the SPM for children to return to pre-Covid levels

The supplemental poverty measure (SPM), accounts for many federal programs designed to assist low-income families. It slightly increased over the past year for Americans under the age of 18. 

Child poverty exceeded the poverty rate of adults in the United States. The poverty rate in 2023 was one percentage point higher for children compared with those 18 years or older. Prior to the COVID-19 pandemic, child poverty was also above that of the adult population. Compared with the 2010 to 2019 average poverty rate of 16.1 percent for children, the average poverty rate for those 18 years or older was 14.1 percent over that same decade.

Child poverty then dipped below the rate for adults during the pandemic due to targeted federal assistance for children. However, the expiration of that aid caused child poverty to rise above the rate for adults, returning to the pre-pandemic narrative. Generally, children experience higher rates of poverty than adults in the United States because of factors such as the cost of caregiving and its responsibilities, transitions to a single parenthood household, unemployment of parents, and disabilities of family members.

Child Poverty is Higher in the United States than in Other Wealthy Countries

Not only does the rate of U.S. child poverty fare poorly when compared to the poverty rate of U.S. adults, but it also compares poorly to child poverty rates of peer countries. The United States has the highest rate of child poverty compared to other wealthy, developed nations, according to the most recent data from the Organization for Economic Co-Operation and Development (OECD). The U.S. child poverty rate was 20.8 percent, and the average for similar countries excluding the United States was 11.2 percent using data from 2022 (or the most recent data available for a country). Belgium’s last recorded data was from 2021 and was the lowest rate in the comparison group at 7.9 percent. While OECD’s methodology for the child poverty rate is different from the SPM, it also accounts for governmental taxes and transfers.

The Economic Costs of Child Poverty

High levels of child poverty can impose a substantial economic cost to the United States. In 2018, a study by Michael McLaughlin and Mark R. Rank of Washington University in St. Louis measured the economic cost of child poverty by quantifying the costs of lower economic productivity, higher healthcare costs, and costs associated with crime, homelessness, and child maltreatment. The authors acknowledge that other important costs exist — such as emotional harm to children — but they are not easily quantifiable.

The largest economic cost of child poverty is the reduced future earning potential of children born into poverty. For adults who experienced poverty during childhood, earnings were reduced by a total of $294 billion compared to adults who did not experience poverty during childhood in 2015. The next largest costs are related to street crime and poor health. In all, child poverty reduced the size of the economy by an estimated $1 trillion, or 5.4 percent of gross domestic product, in 2015.

For each dollar spent to reduce poverty, McLaughlin and Rank estimated the government saves at least $7 on the future economic costs of poverty — making it a worthwhile investment from purely a budgeting standpoint.

What Are the Economic Costs of Child Poverty?