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Stimulus check update: fourth payment essential for many, study finds

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(File / Getty)

(NEXSTAR) – As the United States faces rising inflation, slower job gains and a crippled supply chain, new study finds Americans most in need of control stimulus early in the pandemic continue to suffer the most.

The three rounds of stimulus checks spanning two presidencies were critical for low wages, researchers at the Capital One Insights Center found, but didn’t go far enough.

The study began in the spring of 2020, with the authors administering surveys to a nationally representative group of Americans every four to eight months to learn more about the impact of the virus, how they used their stimulus checks to their vision of the US economic recovery.

Respondents fell into three annual income groups – less than $ 25,000, $ 25,000 – $ 100,000 and over $ 100,000. Low-income people were much more likely than other groups to have spent the last stimulus payment on bills, according to the study.

Part of the reason, the researchers say, is the lack of recovery for the country’s poorest people.

An unbalanced recovery

The study found that while the loss of jobs and income was devastating during the spring 2020 COVID-19 wave in the United States, the way Americans behaved over the year varied widely depending on of several factors.

During this spring, 32% to 36% reported a loss of income – a figure that hasn’t changed much for the bottom third of earners. For the other two groups, however, the study found that only half of respondents still reported loss of income. Underemployment was also 12% more likely among black and Hispanic / Latinx workers than among white workers.

However, economic insecurity was also a common theme among middle income earners. The study found that debt levels were higher for one in five respondents in the spring of 2021 than before the pandemic.

In 2020, real incomes and the number of full-time workers were already plummeting.

Median household income in the United States fell 2.9% from $ 69,560 in 2019 to $ 67,521 in 2020, the first time since then, according to the results of the U.S. census. 2011. Real median income fell 1.2%, from $ 42,065 to $ 41,535, as did the number of full-time workers, which fell by 13.7 million.

Calls to a fourth dunning check

For many Americans, finding money for looming mortgage, credit card, and utility bills is a monthly cycle of anxiety. The study found that in April 2021, 46% of low-income people said they would not have been able to pay their expenses without the stimulus money.

After the third stimulus check – the payment of $ 1,400 as part of the US bailout – this balance became more difficult for many low-income earners. Almost a third of low-income people said in August 2021 that they needed to borrow money from friends and family to pay their bills.

The cost of childcare has compounded the difficulty of paying the bills for many, with 50% of low income and 30% of middle income reporting in August that they had been forced to cut back on their work to care for children or to give up their job altogether. This is compared to 18% of top earners.

Although Congress seems unlikely to approve a fourth round of stimulus checks – as Republicans and Democrats vie for funding for the government and the Biden administration’s now $ 2 trillion spending program , to improve social services and fight climate change – researchers at the Capital One Insight Center aren’t the only ones calling the stimulus payments critical of the US recovery.

In September, the non-partisan advocacy group The Senior Citizens League (TSCL) warned the cost of goods and services was rising for those on fixed incomes, months before next year’s federal cost of living hike.

Government economics experts have estimated that recent increases in inflation mean that the cost of living adjustment (COLA) for 2022 will approach 6%, a huge jump from the 1.3% COLA granted for this year. .

Now the Senior Citizens League is running a campaign to urge Congress to pass a fourth round of stimulus checks that would send payments of $ 1,400 to Social Security recipients only.

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