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Government assistance lifts Vermonters out of poverty, but the work is far from done

Ashley DeLeon & Lana Cohen (VTDigger)

Photo by Glenn Russell/VTDigger

Stimulus checks, unemployment insurance and SNAP food benefits are just some of the government programs that kept about 77,000 Vermonters out of poverty this year, according to a study published by the Urban Institute last week.

But what will happen once Covid-19-related stimulus money is spent and gone? The answer may depend on what the state government does to support vulnerable Vermonters.

New forms of government assistance plus expansion of existing programs played a significant role in pushing Vermont’s poverty rate down to 7%, a notable dip from the state’s 10.2% rate in 2018, the report found.

Without the programs and payments that flowed out of Washington, D.C., Vermont’s poverty rate would have hit 19.8% this year, according to the Urban Institute’s estimates.

These numbers aren’t surprising, said one expert on the intersection between state economics and vulnerable groups.

“That’s what happens when people have enough money in their pockets to buy what they need,” said Jack Hoffman, a senior policy analyst for the Public Assets Institute, a research nonprofit that advocates for policies that protect Vermont’s most vulnerable residents.

The Urban Institute report uses a relatively new poverty measure developed by the Obama administration to calculate poverty levels. The Supplemental Poverty Measure takes into account government assistance, regional cost of living, state tax rates, and more. The conventional poverty measure, on the other hand, is largely based on how much cash someone has.

Vermont is not the only state that benefited from hundreds of billions of federal dollars for programs and benefits this year. Government benefits have kept an estimated 50 million Americans out of poverty, the Urban Institute said.

“Federal stimulus checks, [unemployment insurance], and SNAP have the largest projected antipoverty effects of all the programs examined” in the study, the report says. “These benefits have kept many families above the poverty threshold, including families with workers who lost jobs in the recession, as well as families with no pandemic job loss but whose resources would fall below the poverty threshold without the pandemic-related benefits.”

The benefits had the largest impact on child poverty — reducing Vermont poverty levels for residents under 18 from 7.1% in 2018 to 2.6% this year. The same pattern held true across the country — child poverty plummeted from 30.1% in 2018 to 5.6% in 2021.

“Most relief measures have been targeted to children and you can really see the impact of that,” said Sarah Teel, research director at Voices for Vermont’s Children, a nonprofit advocacy group. “It’s reversing the dynamic where children are more likely to be in poverty than adults.”

Benefits that directly targeted families and kids include SNAP for women, infants, and children, and child tax credits.

But the news isn’t all sunny. The Urban Institute estimates 25 million Americans will remain in poverty this year, including 42,000 Vermonters. And the institute’s report does not dive into what may happen in the future, when the money from stimulus checks is gone but the fallout from the pandemic remains.

Hoffman said the future of Vermonters hovering around the poverty line somewhat depends on what the state does to continue to support them.

“We just have to get more money to low-income families,” Hoffman said, through higher wages, tax policy and other adjustments.

Hoffman said he hopes the pandemic forced elected officials to appreciate what it means to address poverty. “One thing we’ve learned from Covid is how much it really costs people to just meet their basic needs. $600 a week of unemployment. That’s what it costs to live,” he said.

The state is already at work, said Tricia Tyo, deputy commissioner of the Department for Children and Families. Tyo pointed to a recent benefit increase for the 3,300 participants in Reach Up, which provides job-related help and cash grants for families in poverty who include minor, dependent children.

That increase is the program’s biggest boost in benefits in nearly 20 years, the agency says. A family of three can expect a base increase of around $111 a month, and households in which one parent receives Social Security disability benefits will get $77 on top of that.

But even with strong state support, Hoffman said, it may be difficult for people to afford everything they need.

According to 2020 census data, the conventional poverty line in the United States for a single person under 65 is $13,465 a year. For a family of four that includes two dependent children, the poverty wage is $26,338 per year.

But according to a report by the Vermont Legislative Joint Fiscal Office, a single Vermonter living in an urban area actually needs annual income of $38,458 to afford basic expenses such as food, housing, transportation, telecommunication services and health care. For a single person in a rural area, that number is $32,702. And a family of four with two wage-earning adults and two dependent children needs $58,325 per year in an urban area, and $53,061 in a rural one, according to the Vermont Basic Needs Budget and Livable Wage Report.

Hoffman put it plainly: “We’re talking about poverty, and poverty is a long way from meeting basic needs.”

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