The 2022 income and poverty report released last week by the Census Bureau offers an initial, authoritative insight into the economic well-being of U.S. households by race and ethnicity. This examination comes in the wake of a notable decrease in child poverty rates in 2021, primarily attributed to the expansion of safety net programs—like the Child Tax Credit (CTC)—that were an integral component of the COVID-19 economic recovery.

The report indicated that although real median household income fell 2.3% in 2022 for all households, there were notable differences across various racial and ethnic groups, as seen in Figure A. Specifically, Black households saw a modest 1.5% increase in real median household income, going from $52,080 to $52,860. Likewise, Hispanic households experienced a slight 0.5% uptick, with median income rising from $62,520 to $62,800. Asian households experienced a 0.6% dip in median household income, from $109,400 to $108,700. In contrast, white, non-Hispanic households experienced a more pronounced 3.6% decline in median household income, from $84,110 to $81,060.

Notably, one of the key factors explaining why Black household median income was seemingly less affected than that of white households is the increased employment of Black workers in the labor market, which managed to counteract the negative impact of inflation on income. In 2022, the number of Black full-time, year-round earners increased by 1.3 million—or 9%— compared with an increase of 450,000 white earners—or 0.6%.

Despite the strength of the labor market recovery, racial disparities continue to persist with Black households earning 65 cents for every dollar earned by a white median household, an increase from approximately 62 cents in 2021. Hispanic households earned 77 cents for every dollar that the median white household earned, up from 74 cents in 2021.

Year-to-year changes in the Supplemental Poverty Measure (SPM) provide the most accurate and comprehensive measure of poverty and the net effect of allowing pandemic-era benefit extensions like the expanded Child Tax Credit to expire. Despite the positive impact a strong and stable labor market had on earned incomes for working families, exposure to poverty increased among all racial and ethnic groups, with much higher rates for Black and Hispanic households. In particular:

• The SPM increased overall from 7.8% in 2021 to 12.4% in 2022.
• Non-Hispanic white poverty increased from 5.7% to 9.1%.
• Black poverty increased from 11.2% to 17.2%.
• Hispanic poverty increased from 11.2% to 19.3%.
• Asian poverty increased from 9.5% to 11.6%.

The fact that Black and Hispanic poverty rates increased the most as a result of policies like the expanded CTC not being renewed shows that those policies were equity-enhancing.

The SPM child poverty data also show a disappointing reversal of progress:

• Overall child poverty doubled from 5.2% in 2021 to 12.4% in 2022.
• Poverty for non-Hispanic white children, brought below 3% in 2021, increased to 7.2% in 2022.
• Black and Hispanic child poverty, both brought below 10% for the first time in history in 2021, rose to 18.3% and 19.5% in 2022, respectively.
• Asian child poverty rose from 5.1% to 9.9%.

These dramatic increases in child poverty are again the direct result of the policy choice to allow pandemic-era relief programs like the Child Tax Credit to expire.

Policymakers have demonstrated that they have the capacity to effectively cut child poverty and racial disparities in child poverty but are now refusing to use that capacity. In an era where household earnings are not increasing enough to keep up with the costs of child care, allowing programs to expire that alleviated that burden hurts workers and families with children. The result is that many more families with children are substantially worse off than last year.