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

This report projects monthly poverty rate estimates for January 2021 amidst the ongoing Covid-19 pandemic. This is a continuation of our work projecting 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 project monthly poverty estimates 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.