January is National Poverty in America Awareness month, offering an opportunity to reflect on the current state of poverty in the United States, and—more importantly—on the policy choices the United States government does or does not make to ensure that economic opportunity is a right, hardship and instability are the exception, and children have what they need to reach their full potential.
This poverty month comes at a critical moment for reflection on poverty, following the passage of the single largest wealth transfer in U.S. history from low-income families to high-income households in H.R. 1, the Republican budget reconciliation package passed in July. Poverty is expected to rise in the wake of these policy choices. However, proven policy solutions could dramatically reduce poverty in the United States, and whether we decide to enact them is a reflection of what kind of country we want to be.
Poverty Is More Widespread Than Commonly Understood
The U.S. Census data shows that in 2024, 43.7 million people in the United States experienced poverty, or 1 in 8 people. For many, poverty is not a permanent condition but a recurring one. A majority of Americans will experience poverty or near-poverty at some point over the course of their lives. By age 75, an estimated 58.5 percent of Americans will experience at least one year of living below the poverty line, and 76 percent below 150 percent of the poverty line. Poverty spells tend to be short but frequent. The median length of a poverty spell is approximately 11 months, and more than half of these spells end within one year.
These numbers demonstrate that rather than thinking of poverty as something that happens to other people, we should recognize that poverty affects most families and all communities. Job loss, health crises, families splitting up, and the need to take time out of the paid workforce to provide care for a loved one are all common life experiences that can tip families from getting by into poverty. Policymakers can choose to provide support for families to reduce hardship and ensure stability in times of crisis.
Women & People of Color Disproportionately Experience Poverty
While the experience of poverty might be more widespread than commonly understood, the chances of experiencing it do not fall equally across different populations in the U.S. The racial and gender disparities in poverty rates reflect the systemic inequalities of our society, labor markets, and basic needs programs. For example, Black Americans made up 13.6 percent of the U.S. population in 2024, but experienced poverty at a rate of 23.4 percent. By contrast, white Americans made up 57.2 percent of the population, but only 40.6 percent of them experienced poverty in 2024. Women and people of color are disproportionately likely to be in low-wage jobs that pay insufficient wages to sustain a family, reflecting racist, sexist inequalities in our labor market that continue to this day.
As discussed above, more people might experience poverty over the course of their lives than commonly perceived, and poverty spells can often be short. However, women—especially single mothers—and Black households are far more likely to re-enter poverty after exiting it. Close to half of all Black and female-headed households that experience poverty re-enter it within four years, and basic needs programs fail to provide adequate support as people navigate the inevitable vicissitudes of life, such as job losses or the need for greater financial resources to help raise a child.
Proven Policy Solutions Would Dramatically Reduce Poverty
Poverty is not an inevitability; it’s a policy choice. There are proven policy solutions that have dramatically reduced poverty. In 2021, bolstered by federal pandemic relief, basic needs programs drove the poverty rate down to a record low of 7.8 percent. This historic drop in overall poverty was driven in particular by the decrease in childhood poverty from 9.7 percent to 5.2 percent. That nearly 50 percent drop in less than a year was driven by expansions to the Child Tax Credit (CTC). One of the key changes that drove this dramatic decrease was making the credit fully refundable, ensuring that even families who earn too little to owe income taxes were able to benefit from the credit.
Unfortunately, these changes to the CTC were only temporary, and their expiration caused poverty to rise again in 2022, with child poverty more than doubling to 12.4 percent and overall poverty climbing to 12.4 percent in 2022.
This dramatic fall and rise in only one year directly demonstrates that policy choices matter for addressing poverty. Solutions to address poverty are within our reach, if we choose to use them.
H.R. 1 Is a Policy Choice That Worsens Poverty & Inequality
Recent policy decisions, such as the Republican budget reconciliation package (H.R. 1) passed in July 2025, move in the wrong direction. H.R. 1 will further exacerbate inequality while increasing material hardship as severe cuts to basic needs programs like Medicaid and SNAP take effect over the coming years. The Congressional Budget Office estimates that H.R. 1 will reduce resources for families in the bottom-tenth of the income distribution by about $1,200 each, while increasing resources for families in the top-tenth of the income distribution by about $13,600 each. The scale of the disparity is staggering.
Much of the reduction in resources for families experiencing poverty is due to cuts made to SNAP and Medicaid by H.R. 1. More than 20 million Americans will lose some or all of their SNAP benefits because of changes to the program made by H.R. 1, which increases pre-existing work reporting requirements and shifts the cost burden of paying benefits from the federal government to states. Between 10 and 15 million people are at risk of losing Medicaid, mostly because of the law’s changes to work requirements. Despite the fact that over 90 percent of adults under 65 with Medicaid already work full- or part-time, the persistent myth that lack of hard work is the reason people experience poverty leads to the enactment of bad policies such as work requirements. The imposition of work requirements, which are really just paperwork reporting requirements, previously by Arkansas and Georgia resulted in tens of thousands of people losing their Medicaid coverage with no corresponding increase in employment. H.R. 1 changes to SNAP and Medicaid will inevitably increase material hardship for families at the bottom of the income distribution in order to finance tax cuts for those at the very top.
An America Without Poverty Is Possible
The United States has the resources to make sure everyone can count on the basics. National Poverty Awareness Month is an opportunity to recommit to policies that support children, families, caregivers, and workers and live up to American ideals of opportunity, democracy, and a fair chance for every person. It’s not a question of whether we have the policy solutions to ensure that hardship and instability are the exception, and that children have what they need to reach their full potential—the question is whether we choose to use them.