Monthly Poverty to Spike After Expiration of the CARES Act Unemployment Benefits

This analysis provides monthly poverty rate estimates for January 2021 amidst the ongoing COVID-19 pandemic. This is a continuation of our work estimating poverty rates based on a family’s monthly resources, in contrast to measures of poverty based on a family’s annual resources, and our earlier work examining the impact of the federal response to the current economic crisis under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

As of December 2020, two unemployment provisions of the CARES Act remain in place until the end of the year: Pandemic Unemployment Assistance (PUA), which expands eligibility for unemployment benefits, and Pandemic Emergency Unemployment Compensation (PEUC), which extends the duration of unemployment insurance coverage. If the PUA and PEUC expire, we find that the number of individuals in poverty in January 2021 will increase by approximately 4.8 million.

We estimate monthly poverty rates for January 2021 under three policy scenarios:

1. An expiration of the CARES Act PUA and PEUC
2. A continuation of the PUA and PEUC into 2021
3. A continuation of the PUA and PEUC plus the introduction of a temporary $300 per week national supplemental unemployment payment.

We provide poverty estimates for the US population as a whole, children, and across racial and ethnic groups. Black and Latino workers and their families have been disproportionately impacted by job loss and poverty amidst the COVID-19 crisis. Poverty among families with children also remains high. A restoration of the CARES Act unemployment provisions–specifically, the PUA, PEUC, and a $300 per week PUC supplemental payment–would make a particular difference for these families.

Measuring Monthly Poverty 

In 2020, we established a novel method to estimate monthly Supplemental Poverty Measure (SPM) poverty rates. Using a monthly framework, we are able to track poverty amidst changing economic circumstances, for example as the COVID-19 pandemic and federal policy responses to it evolved. Visit our data page to see monthly poverty information for the US population as a whole, as well as by race/ethnicity and age groups. 

Suggested Citation:

Parolin, Zachary and Megan A. Curran. 2020. Monthly poverty to spike after expiration of the CARES act unemployment benefits. Poverty and Social Policy Fact Sheet. New York: Center on Poverty and Social Policy, Columbia University.

Published on December 15, 2020