November 24, 2020; Washington Post, CBS News, and The Hill
When the pandemic hit this past spring, Congress and President Donald Trump, despite their political differences, were able to act aggressively to ease the economic impact of the pandemic. The four bills passed and signed in March and April 2020—most notably the CARES bill—collectively allocated about $3 trillion for assistance to individuals, businesses large and small, local and state governments, and testing and treatment.
But too many politicians viewed COVID-19 as a short-term challenge. The strategy followed by the Trump administration was based on the belief that the economy and the public’s health could be separated from each other. They could not. As a consequence, today, with the virus running amok and widespread vaccinations months away at best, the economy is teetering. Bruce Meyer, a University of Chicago professor who studies poverty and inequality, told the Washington Post, “If we can’t sort things out soon, there’s going to be a lot of people who are hurting.”
Many of the programs meant to provide safety net supports to households that felt the virus’s economic toll ended in July, and as NPQ’s Ruth McCambridge recently spotlighted, four more will be ending shortly. Two of these give 12 million former hourly and gig workers replacement income will end on December 26th. (One program is designed for gig workers; the other extends unemployment insurance for hourly workers for an added 13 weeks.) Nationwide eviction moratoriums and general student loan payment forbearance will terminate on December 31st. Peter Berezin, chief global strategist at BCA Research, tells CNBC that what we face is “a Wile E. Coyote moment, where he runs off a cliff, pauses midair, only to realize there’s nothing below.”
Andrew Stettner at the Century Foundation concurs: “We are just totally, completely ignoring the situation at a time when things are getting worse before they’re going to get better in terms of public health. And that just really is going to constrain people’s ability to get a job when benefits run out.”
Even before we reach that cliff, economic harm is rising alongside the infection rate. Data maintained by Harvard’s Opportunity Insights Economic Tracker show that as of early November, 19.8 percent of Americans in the bottom quartile who were employed in January are still without jobs even as employment for those earning $60,000 or more before the pandemic is fully restored. The Economic Security Project issued an open letter (signed by 125 economists) which notes that “at least half of families have been impacted, with low-wage earners, women, and Black workers hit hardest.”
Though unemployment is beginning to decline, nearly half of households have experienced serious financial trouble during the pandemic, including running out of savings, trouble affording food, paying utility bills, and paying their rent or mortgage. Six in ten who have lost income are still making less than they were before the pandemic…women have been pushed out of the workforce at four times the rate of men; and the gulf in employment between Black and white workers has more than doubled since the pandemic began.
The Hill confirms millions remain in dire economic straits:
The most recent data from the Census Household Pulse Survey, covering the last days of October and early November, painted a grim picture. Nearly a third of all households (32.9 percent) said they were behind on housing payments and rated the chances of eviction or foreclosure within two months as somewhat or very likely. Some 25.9 percent expected a household earner to lose employer income in the coming month, and 12 percent said they didn’t have enough to eat.
And last week the Washington Post reported “more Americans are going hungry now than at any point during the deadly coronavirus pandemic“ with hunger affecting 26 million, the highest since comparable data began to be collected in 1998.
After Thanksgiving break, Congress has only a few days in session before they adjourn and await the new Congress in January. The economists’ letter reminds us that, “Additional stimulus checks could help keep about 14 million people out of poverty.” The authors add that direct cash payments should “coincide with more aid, including unemployment, state and local aid, more Supplemental Nutrition Assistance Program (SNAP) benefits, and childcare funding.” Most of this was included in the $2.2 trillion HEROES Act passed by the US House of Representatives in October.
The suffering, in other words, is needless. Nonetheless, in all likelihood, the nonprofit sector will be left to stand in the breach, the last remaining strand of a frayed national safety net. Without urgent and aggressive action, the human toll of the pandemic will take on another tragic dimension.—Martin Levine