Analysts from Poverty Solutions at the University of Michigan have found that federal pandemic assistance helped close the persistent gap in material hardship for U.S. families with children and that the advances stuck even in the face of rising inflation.

“The concerns over rising prices have dominated the headlines, but those concerns need to be placed in conversation with the gains of low-income households,” Patrick Cooney, Assistant Director of Economic Mobility for Poverty Solutions, told this week’s Kids and COVID panel on the pandemic’s economic impact

In fact, Poverty Solutions found that stimulus payments and safety net improvements such as increased unemployment benefits placed the average U.S. household — and especially low-income households — in a better financial position in 2020 and throughout 2021 than in 2019. Material hardship persisted however for households with children — a gap that was narrowed by the improved Child Tax Credit. The improved CTC expired at the end of 2021.

“When we look at all the things we should be doing, that’s the piece that’s most obvious we need to get done,” Cooney said.

The perpetual caveat, of course, is that the recovery is uneven. Women, and especially low-income women and women of color, have borne the brunt of pandemic job losses, said Julie Vogtman, Director of Job Quality for the National Women’s Law Center. The stimulus measures helped children eat, go to school, and remain housed during the pandemic, she added, but they weren’t designed to combat the structural barriers to economic security that women faced long before the pandemic began, such as lack of child care and wage inequality.

“Care infrastructure investments are the thing we cannot give up on,” she said. “We need to finally treat child care like the public good that it is and invest in it accordingly.”

Older and former foster youth — often called transition-age youth (TAY) — benefitted from improvements to the Earned Income Tax Credit (EITC), said Anna Johnson, an associate director with John Burton Advocates for Youth, who called on Congress to make these changes permanent. These 18-24-year-olds experience the highest rates of unemployment, she said, and will take the longest to rejoin the workforce and recover income losses. Advocates helped 147 current and former foster youth claim nearly $370,000 in federal and state refunds in the filing cycle that ended this week, she said. The average return will be $2555 per person.

“This isn’t pocket change,” she said. “They go and pay off their debts, they buy food for their kids and they fix their car so they can go to work. We need this to be ongoing to recover.”

Resources referenced during the session:

University of Michigan:  Material Hardship and Well-Being of U.S. Households at the End of 2021

From NWLC/Julie Vogtman:

Resilient But Not Recovered

We Are the Backbone: Faces of Care campaign