How the reduction of the child tax allowance led to another year of poverty

But it is also reflected in the relatively stable poverty levels between 2022 and 2023; pandemic-era relief programs such as the expanded child tax credit, rental subsidies and additional food stamps have not only expired but are unlikely to be reinstated in any significant way in the near future. A bipartisan tax bill that would have expanded the tax credit passed the House earlier this year but failed in the Senate.

While the federal outlook for expanding the child tax credit appears bleak, several states have enacted their own child tax credits in recent years. The Census Bureau tracks three-year averages of state poverty levels, so the impact of new measures enacted in 2023 may not be apparent until a future report. “I think at the federal level, we're in sort of a post-pandemic period, but at the state level, I think there are more changes coming that we just can't see from this particular data report right now,” said Joshua McCabe, director of social policy at the Niskanen Center.

Still, some experts worry that in many areas, progress—or even stagnation—has been undermined by persistent inequalities. While household income rose for non-Hispanic whites, median incomes for Hispanics, Asians, and Blacks were statistically no different in 2023 than they were in 2022. The gender wage gap widened for the first time in two decades, with women earning nearly 83 percent of what men earned in 2023. Census data also showed racial disparities in poverty, with Blacks and Hispanics more likely to live in poverty than white, non-Hispanic people; poverty among Black, Hispanic, and Asian children also increased in 2023, while it remained relatively unchanged for non-Hispanic white children. By comparison, in 2021, child poverty for Black and Hispanic children was still higher than that for non-Hispanic white children, but by a smaller gap than previously recorded.