7.4c Political Explanations

Political explanations of poverty draw attention to how social policy influences poverty that is associated with behaviors such as single motherhood (Brady, 2019). Brady (2023) argues that generous social policies for welfare programs are necessary to reduce poverty, and that only nations with such policies have reduced poverty. During 2020 and 2021, amid the COVID-19 pandemic, a natural experiment presented itself. The U.S. government increased spending to combat poverty through stimulus payments, increased SNAP benefits, and expanded the Child Tax Credit. As a result of these efforts, childhood poverty (as measured by the Supplemental Poverty Measure) declined by 46% from 2020 to 2021 (see Figure 7.14) (Burns et al., 2022). Between 3 and 4 million children aged 17 and under were lifted out of poverty due to these measures (Parolin et al., 2022a). The Child Tax Credit and most other COVID-19 stimulus spending ended in 2021, causing poverty rates for children to more than double between 2021 and 2022 (Shrider & Creamer, 2023).

Contrary to popular belief, households receiving these benefits spent their money on necessities. As Figure 7.15 shows, almost everyone (91%) spent some of it on essentials like food, utilities, rent or mortgage, clothing, and education expenses (Center on Budget and Policy Priorities, 2022). The expanded 2021 Child Tax Credit reveals that political policy can influence changes in poverty rates, and that people spend such assistance on basic needs.