Government transfer and tax credits kept almost 300,000 children and more than half a million adults above the poverty line in 2022. Table 1.1 reports the number of New Yorkers kept out of poverty by government transfers and tax credits in 2021 and 2022. In 2022, these policies kept more than 500,000 adults and close to 300,000 children above the poverty line. The results point to the effective role policy can play in reducing poverty. Results from 2021 make this even clearer, as the temporary policy expansions under the 2021 American Rescue Plan (ARP) – alongside existing policy – kept more than 1.5 million New Yorkers (adults and children) above the poverty line. 7
Number of New York City adults and children kept out of poverty (2021 and 2022) Table 1.1
2021
2022
Adults
Children
Adults
Children
Pre-tax credit/transfer, rate Pre-tax credit/transfer, count Post-tax credit/transfer, rate Post-tax credit/transfer, count % change from credits and transfers N people kept out of poverty
33%
48%
31%
42%
2,216,000
841,000 2,064,000 705,000
18%
15%
23%
25%
1,209,000
263,000 1,531,000 419,000
-45%
-68%
-27%
-41%
1,007,000
578,000
533,000 286,000
Source: Annual Poverty Tracker survey data, second through fifth Poverty Tracker cohorts. Note: New York City Population size based on the American Community Survey data from the U.S. Census Bureau, see: https://www.census.gov/quickfacts/newyorkcitynewyork.
How do we evaluate the effects of government policy on poverty rates? The Poverty Tracker measures poverty in New York City using the Supplemental Poverty Measure — an improved measure to the Official Poverty Measure that allows us to isolate the impact that various policies have on the poverty rate. We assess the impact of government policy on poverty by identifying how many New Yorkers would be living in poverty when we do not include tax credits and government transfers as part of their income, 8 and then again when we do include these income sources. The former gives us the “poverty rate before tax credits and government transfers” and the latter the “poverty rate” as it is commonly reported. For brevity, we refer to the poverty rate before tax credits and government transfers as the “pre-tax-credit/transfer poverty rate.” 9 The difference between these two rates translates to the effect of government policy on the poverty rate.
7 To learn more about the 2021 American Rescue Plan and its poverty-reducing effects among adults and children in New York City in 2021, see: Poverty Tracker Research Group at Columbia University, “The State of Poverty and Disadvantage in New York City, Volume 5.” 8 Note that income is totaled at the family level and compared to a poverty threshold that is adjusted for family size. 9 This is the poverty rate before accounting for the tax credits and government transfers discussed in the text box.
THE STATE OF POVERTY AND DISADVANTAGE IN NEW YORK CITY 11
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