Posts Tagged "CARES Act 2020"
June 2, 2022
COVID Relief Checks Helped Needy the Most
In the pandemic’s early days, the unraveling of economic life was breathtaking. Some 3.3 million Americans filed for jobless benefits in the second week of March 2020. A record 6.6 million joined them the following week.
By April, government checks were starting to land in workers’ bank accounts, bringing the urgent relief Congress intended. The unemployed used the often-substantial assistance – up to $3,400 for a family of four – to cover basic expenses, and the people who were holding on to their jobs saved for possibly difficult days ahead.
New research shows that the benefits of this assistance disproportionately went to those who needed it most: low-income workers and people who had financial problems before COVID hit.
The relief checks “have been more of a lifeline for individuals who were struggling,” the study concluded. “Rather than simply help prevent widening inequality,” the relief “may have helped close the gap.”
Consider the workers who either had great difficulty paying their debts in 2019 or had been spending more than they earned. Thanks to the first round of relief distributed in 2020, both groups saw improvement in three major areas, according to the Dornsife Center for Economic and Social Research at the University of Southern California.
The disadvantaged workers experienced the largest reductions in financial stress and felt more satisfied with their finances. They also felt less financially fragile, reporting that it was easier to come up with $400 in cash for an emergency like a car repair. And their ability to save increased.
The researchers said they couldn’t directly credit the relief checks for these improvements. Another important factor – the enhanced unemployment benefit of $600 per week – was also simultaneously at play. But one analysis in this study did find that the people who had received the checks saw more gains than the workers who were still waiting for their checks when they participated in the Internet survey in April 2020 that the researchers used.
As was widely acknowledged at the time, lower-paid hourly workers suffered the brunt of the pandemic-related layoffs. The researchers found that $60,000 in yearly income was a sort of dividing line: households that earned less benefited more from the government assistance than households that earned over $60,000. The lower-income households were more likely to build up their checking and savings account balances. …Learn More