As economists and policymakers continue to assess the impact of the Covid-19 pandemic, one of the concerns is the possible disparate outcomes for lower income households. Fortunately, because of quick and dramatic policy actions in the form of fiscal stimulus and expanded unemployment insurance benefits, many individuals were spared from falling into poverty. This can be seen locally where the share of population living at or below the Federal Poverty Level (FPL) in Walla Walla County fell by four percentage points – from 11% to 7% -- between 2020 and the most recent year for which data is available, 2021. Even better news is that the current share of population in poverty is below the state average of 10% and well below the national average of 13% at the end of the pandemic.
Walla Walla Trends 1.6.1 Total & Share of Population Living in Poverty provides data from the US Census on the total number of individuals as well as the share of population living at or below the Federal Poverty Level. The FPL is determined based upon income and need for households. Income is the "incomes of all related family members that live together" and need is the "dollar amounts used to determine poverty status". In short, poverty thresholds vary since they take into consideration the number of adults living in the household (1 or 2), the total number of dependents, as well as the total household income. If a household’s total income is less than the associated poverty threshold, the family is living in poverty. If a family's income is equal to or greater than the associated poverty threshold, the family is not living in poverty. Population groups excluded from poverty counts are people living in: prisons and nursing homes, college dormitories, military barracks, and the homeless.
Although US Census estimates from the American Community Survey (ACS) were not reported in 2020 due to low response rates during the pandemic, data is available for the county as well as for the state and nation from 2013 to 2021.
Taking a little longer look back, since 2013, we see the poverty rate for Walla Walla has ranged from a high of 18% (2013) to the current low value of 7%. Back in 2013, the poverty rate for the county exceeded both the state (12%) and US (13%). Although the county population has increased by 3,000, the total number of people living in poverty has fallen by over 6,000, a decrease of over 60%.
Walla Walla Trends 1.6.2 Total & Share of Youth Population Living in Poverty also shows the good news that the number of children living in poverty in the county has continued to decline. Since 2013, there are 2,000 fewer children under the age of 17 living in poverty. The share of the youth population in poverty in 2021 was 10%, below the state average of 12% and the national average of 17%.
Because the current official measure of poverty fails to consider the value of non-cash benefits such as food stamps, housing subsidies or Medicaid, the US Census Bureau has started tracking a second measure of poverty – the Supplemental Poverty Measure (SPM) that includes both cash resources and non-cash benefits from government programs aimed at low-income families and subtracts taxes and necessary expenses. Whereas the official poverty measure has remained mostly unchanged since mid-1960s allowing for lengthy time series analysis, the SPM which began in 2008 was designed to keep pace with changes in data, methods, and new research. In 2017, the SPM was further refined so comparisons between 2008 and 2017 need to be considered very carefully.
Since its inception in 2008, the national poverty rate according to the SPM has typically been higher than the older official poverty rate measure. In part, this is because the SPM also considers taxes and necessary expenses along with non-cash benefits. However, because of the injection of fiscal stimulus and expanded unemployment benefits through the pandemic, the share of population below the poverty line as calculated by the SPM dropped below the official poverty measure for the first time, by about 2% on average.
Although the official data for the SPM’s share of population is not available at the county level, if we assume an average difference between the two poverty rates of 2%, this would imply that the SPM measure of the share of population in Walla Walla County in poverty during the pandemic could have possibly fallen as low as 5%.
Given that the response to the financial challenges of the Covid-19 pandemic and disruptions to economic activity was swift and short-lived, we would expect that these relatively lower poverty rates in the local community might not continue longer term. Additionally, with higher levels of inflation seen throughout 2022 and still ongoing to some extent, families on the brink of the poverty thresholds might be having a harder time meeting rising expenses.
On the upside, increases in incomes will help to keep some families above the thresholds. In particular, Washington’s inflation adjusted minimum wage saw an increase of 8.6% from $14.49 to $15.74 starting in January, 2023. This will be a welcome respite for local families living at or near the current poverty levels.
Ultimately, where the share of population living in poverty for Walla Walla falls will depend on how successful the policy actions are in attempting to reign in inflation and the extent to which incomes rise in the near future.