The question often arises whether that, as a relative pronoun, may refer to people as well as things. The better authorities say yes — that this use of that is part of Standard English. The OED notes that that is a “general relative pronoun . . . referring to persons or things” and shows that it dates back some 1,300 years in English.
As an empirical matter, although the phrasing people who is much more common today in print, people that is equally frequent in the conversation of English speakers. This might suggest that people that is a less formal wording. …
Something to Consider
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