The problem

Even after substantial post- COVID economic recovery, 38 million individual Americans (11.6 percent) live in poverty according to the federal measuring-stick, known as the Federal Poverty Level (FPL). This measuring- stick overlooks key aspects of food insecurity but is nevertheless consequential in determining how poverty funds are distributed.

Food is the most basic need for families. The origin of the FPL, described in this chapter, recognized this fact. But the FPL incorporated two flawed assumptions. The first assumption was that food prices would inflate at the same rate as all other goods and services. The second assumption was that poor people would spend a constant fraction of their income on food, paying the same prices for food as better- off Americans do. In fact, food prices have recently inflated faster than other goods, and people in poverty are likely to have more trouble finding food and to pay higher prices for the food they find.

The FPL affects families’ eligibility for social safety net programs. All federal agencies are expected to use the FPL or a modification of FPL to qualify individuals and families to receive Medicaid, free school lunches, Head Start, and other safety- net programs.

Entire communities qualify for federal poverty funding based on the proportion of their residents earning less than the FPL. Persistent poverty counties have smaller populations and higher proportions of under-represented minorities, and they are more likely to be rural. The 409 persistent- poverty counties, so designated by the application of the FPL, are eligible to receive billions of dollars from 247 different federal programs. These programs support local infrastructure such as public works and technology upgrades. The flaws in the FPL make it likely that additional counties might qualify under a revised measure. By underestimating poverty, the FPL results in inadequate funds that are inequitably distributed among communities.

Potential solutions include strong leadership from the White House, cooperation among a dozen federal agencies, changes in federal law, action by state and local leaders, and voter vigilance. This chapter outlines the origin of the problem and the steps that will improve it.

The Problem

When George Floyd died at the hands of Minneapolis police, he had been laid off from his job at a restaurant closed by COVID-19. Massive job loss is a second-order epidemic that followed the COVID-19 epidemic because worksites closed. And just as with the disease itself, the epidemic of unemployment disproportionately affected African-American workers. The exact counts of job loss and displacement cannot be described as precisely as the hospitalizations and deaths, but clues to their magnitude can be found in US government employment statistics. These statistics must be examined carefully for what they show and for what they conceal. Even with incomplete statistics, however, the high unemployment of African Americans reveals a broader picture of racial inequality and health disparities.

The COVID-19 epidemic ended months of politicians’ jubilation over a booming economy, but in fact the boom had been unequally shared and the bust intensified inequities existing before the pandemic. African Americans had relatively high unemployment levels even during the boom, and the economic dislocation caused by the pandemic made their employment situations worse. Historically, African Americans have suffered the highest unemployment rates in America, followed by Hispanic/Latinx populations (who may be of any race, including Black) and then by majority Whites and Asian Americans. By 20 April 2020, with over 40,683 COVID-19 deaths already recorded and emergency orders in place nearly everywhere in the United States, the Black unemployment rate was 16.7% and the overall rate was 14.7%.

The May 2020 unemployment rates were released on 5 June 2020, and by that date the number of deaths from COVID-19 had reached 95,608. Politicians were quick to trumpet a 1.4% drop in the overall unemployment rate. Less frequently noted was that the Black unemployment rate increased from 16.7% to 16.8%.

This disastrous loss of work for 3.3 million Black workers intensified financial inequalities. Unemployment is a serious issue for any family, but especially for African-American families because they have few income sources besides wages and salaries. They have little financial cushion because their median net worth is only $17,600. (This compares with $171,000 for White families.) Employment loss is also a serious issue for the society, because fringe benefits and payroll taxes constitute a major funding source for what remains of the American safety net.