The child poverty rate has hit a five-year high in America as families continue to deal with high prices for groceries and housing.
That rate surged from 12.4 percent in 2022 to 13.7 percent in 2023, according to a Census Bureau report, despite real median household income growing by 4 percent during the same period. The official poverty rate fell 0.4 percentage points to 11.1 percent.
“When your dollar doesn’t extend as far, especially when you have multiple children in a family, the result is being left with children who have fewer financial resources than in years past,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“Children have been some of the most affected individuals of inflation’s negative consequences and yet have not received as much coverage,” he said.
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Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, said the increase child poverty indicates that while nominal wages are increasing, real wages are lagging behind as inflation outpaces wage growth.
“If this trend continues, child poverty is likely to rise further,” Thompson told Newsweek, adding that millennials and members of Generation Z are likely to delay having children as a result.
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, called the uptick in child poverty a “gut punch.”
“Especially when you consider how well the economy’s currently doing,” Ryan told Newsweek. “It’s like we’re driving a fancy sports car but left some of the kids behind at the gas station.”
The end of pandemic support programs is likely a large factor in the growing child poverty rate, he said. Families got extra financial support from the expanded child tax credit, which was mostly responsible for bringing child poverty down to an all-time low of 5.2 percent in 2021. In 2020, the child poverty rate was 9.7 percent, in 2019 it was 12.6 percent, and in 2018 it was 16.2 percent.
But Ryan said there’s far more behind the increase.
“The inequality gap is still as wide as the Grand Canyon,” Ryan said. “Just last year, we saw 1 in 5 Black and Hispanic kids living in poverty, while for white kids it was 1 in 14. I doubt those numbers have magically evened out since then.”
While the larger economy shows paychecks keep growing, the higher number of children in poverty shows “two different worlds,” Ryan said. “It’s pretty clear not everyone’s getting an equal slice of this economic pie.”
He continued: “I’ve seen how poverty in childhood can haunt someone for life. It’s not just about going to bed hungry. It’s about doors closing before these kids even know they exist. Poverty messes with their education, their health and their job prospects. It’s a ripple effect that can last for generations.”
Because of the surging child poverty rate, health care costs could increase, and children are more likely to fall behind in school and become less productive members of the workforce in the future, experts say.
“It’s like we’re borrowing from our kids’ futures to pay for today,” Ryan said.
