American families have reported struggling throughout the COVID pandemic on a variety of economic indicators. Recent trends in inflation reported by the Bureau of Labor Statistics in June threaten to further reduce the purchasing power of American households and exacerbate current financial difficulties and inequalities. Prior to this period of inflation levels not seen in decades, many families were already struggling to pay regular household expenses, pay rent or mortgage payments, and get enough food to feed their families. These challenges have always been more acute for families with a child in the household than for families without children, especially for low-income families.
Federal policy makers have taken many measures to mitigate the economic impact of the pandemic on families and children by providing state subsidies, increasing food assistance, Medicaid funding, the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC); However, some of this assistance has expired or will expire. This brief examines hardship across three metrics—difficulty paying regular household expenses, food sufficiency, uncertainty in paying rent or mortgage payments for families with children and income.
How does family income affect children’s health and well-being?
Family income has historically been associated with children’s education and health outcomes. Even before the pandemic, families with children living near or below the federal poverty line had higher rates of undernourishment, worse infant health outcomes, and worse academic achievement than their higher-income peers. In 2020, 33.7% of families with children with incomes below 185% of the poverty threshold were food insecure, more than double the national average of 14.8%. Evidence also shows that family income affects children’s health as well as their cognitive and social development. A 2020 report from the US Department of Education found that students considered economically disadvantaged were one and a half times more likely to graduate from high school within four years of entering 9The tenth rank. Financial instability can also lead to stress and mental health challenges for parents which can negatively affect the emotional and mental health of children.
Economic stability is also The social determinant of health And the Addressing social determinants Health is important to improving health outcomes and reducing health disparities. For this reason, recent policies, such as the Counter-Terrorism Committee, target subsidies for families with children. Addressing child poverty is associated with improved child health outcomes such as increased healthy birth weight, reduced maternal stress, better nutrition, and reduced drug and alcohol use. Cash transfers have been associated with improved health outcomes, and a recent study found that increased brain activity in children of low-income workers provided cash assistance.
How have families with children been during the pandemic?
Families with children have consistently performed worse than families without children throughout the pandemic. The challenges facing all families peaked early in the pandemic and had improved by the summer of 2021; However, adults living with children consistently reported having more difficulty paying daily household expenses, providing adequate food for their families, and were less secure in their housing payments compared to other families (Figure 1).
Improvements in hardship measures in 2021 are likely related to improved economic conditions and many of Federal policies implemented during the pandemic that provided financial relief to individuals and families. After the outbreak of the pandemic, national employment indicators rapidly worsened, leading to one of the deepest recessions on record. While this slump was deep, it was also the shortest on record in two months. Federal financial benefit to individuals and families, including direct stimulus payments, extended unemployment benefits, the Emergency Assistance Program, and Enhanced Supplemental Nutrition Assistance Program (SNAP) benefits, as well as the availability of COVID vaccines have led to improvements in employment indicators and metrics. Hardship in 2021. Federal support is likely to be the driving force behind lower overall poverty rates in 2020, and the Child Tax Credit (CTC) included in ARPA is expected to contribute even more to lower child rates. Poverty in 2021. Early data shows that the monthly rate of child poverty decreased by about 30% after the start of CTC payments in July 2021. A recent report also found that food shortages decreased by 26% in families with children who received advance care Cale children. payments. The expanded Anti-Terrorism Act applied to families previously too poor to qualify and gave families in the bottom quintile an average income increase of $4,470.
However, recent data indicate that measures of hardship are on the rise again, particularly for families with children. All families reported the highest rates of difficulty paying for usual household expenses and food shortages since early in the pandemic, with families with children facing more challenges across measures. In the most recent data, food security has also increased among families with children, a trend not seen in families without children. Although hardship rates have worsened in other metrics, the shares of households with and without children reporting a lack of confidence in their ability to pay rent or a mortgage have remained stable in recent months.
The recent increases in hardship are likely due to rising inflation and commodity costs as well as the expiration of the children’s tax credit. The US Bureau of Labor Statistics reported that inflation accelerated to 9.1% in June 2022, with gasoline and food being the biggest contributors. In the absence of a school that provides free, low-cost lunches to children through the National School Lunch Program, the summer months can be a difficult time for families to make ends meet. The recent rise in inflation and the increase in food costs can increase the food insecurity of children. The increased costs reduce a family’s purchasing power and limit the amount of benefits SNAP can cover, making it more difficult to buy food and pay bills. The recent shortage of infant formula has increased the costs of formula, and some Women, Infants, and Children (WIC) beneficiaries report that they have paid out of pocket to get the formula they need. Furthermore, the expanded benefits for the Child Tax Credit expired at the end of 2021, and a recent report found that there was a 12% increase in food shortages after CTC advances expired.
Do low-income families with children face disproportionate levels of hardship compared to other families?
In general, families with children experience higher rates of economic hardship than families without children. 49% of adults with children in the household reported difficulty paying expenses in the past week, 16% reported insufficient food in their homes, and 8% reported not being confident in their ability to make housing payments for the following month (Fig. 2). Families with children were more likely to report difficulty paying their usual expenses, lack of food and lower confidence in their ability to make housing payments in the next month than families without children.
Of all families with children, families with incomes less than $25,000 are more likely to report economic hardship than higher-income families. Among lower-income adults living with one or more children, 78% (about 7.2 million adults) reported having difficulty paying their usual household expenses, 40% (about 3.6 million adults) reported having a food shortage, and 19% (about 1.4 million people). adults) reported their lack of confidence in making housing payments in the next month (Figure 2). Despite higher earnings, more than 1 in 3 adults earning $50,000 and above reported having difficulty paying their usual household expenses as well.
I look ahead
With the increasing financial difficulties of families, some of the financial benefits provided to families throughout the pandemic period have expired or are expected to end soon. The Extended Child Tax Credit expires at the end of 2021. When the Public Health Emergency (PHE) ends, many of the Extended SNAP benefits will also expire. Recent inflationary pressures may amplify the effects of ending federal assistance as well as other economic and health issues from COVID-19 as children return to school in the fall.