Newsbreak: Child poverty skyrockets as expanded tax credit program ends and minimum wage remains stagnant

The expanded Child Tax Credit (CTC) program approved during the COVID-19 pandemic lifted almost three million American children out of poverty in 2021, according to U.S. Census Bureau website data released on November 22, 2022, but when the initiative ended, the child poverty rate rose by 41% in just one month. Despite efforts to revive the program or even make it permanent, these attempts have fallen short, and President Biden’s recent proposal to revive it with a work requirement attached is not likely to pass, particularly with Republicans in charge.

The current federal minimum wage has remained at $7.25 per hour since 2009, despite rising living costs, and research has shown that it has a major impact on poverty in the United States. Based on a report by GOBankingRates on January 3, 2023, some states have increased their minimum wages, with at least 23 states and the District of Columbia implementing minimum hourly wage increases in 2023. Sixteen of the 20 states that have not raised their minimum wages above the federal rate have child poverty rates of over 12%, as reported by The Mootley Fool on February 7, 2023.

Raising the federal minimum wage to $15 an hour in 2025 could lift up to 3.7 million Americans out of poverty, including 1.3 million children, according to a 2021 report from the Economic Policy Institute published on September 22, 2022. However, some states with comparatively high minimum wages, such as Washington, California, and Massachusetts, also have high costs of living that often reduce the impact on poverty rates. States with high child poverty rates, such as Mississippi and Louisiana, have not increased their minimum wages above the federal rate.