8/23/20
One of the most successful elements of the government’s response to the coronavirus recession — protecting people on the margins from falling into poverty — is faltering as the safety net shrinks and federal benefits expire. Major recessions are especially fraught for low-income earners, whose finances can veer from tenuous to dire with one missed paycheck. But as the economy cratered this spring, economists and poverty experts were mildly surprised to discover that the torrent of government support that followed — particularly the $600 a week in expanded unemployment benefits and one-time $1,200 stimulus checks — likely lowered the overall poverty rate. In fact, 17 million people would have dropped below the poverty line without the $500 billion in direct intervention for American families, said Zach Parolin, a researcher at Columbia University. Now, data show, those gains are eroding as federal inaction deprives Americans on the financial margins of additional support. If the unemployment rate stays around 10 percent and no new stimulus is delivered, “we can expect poverty rates to rise and climb higher than those observed in the Great Recession,” Parolin said. The poverty threshold for a family of four is $26,200, according to the U.S. Department of Health and Human Services.
Struggling people are raising rent money on GoFundMe and asking for help with groceries on Facebook Marketplace. In New Orleans, some have staged sit-ins in front of courthouses to block eviction hearings, with signs urging the local government to cancel rent: “You can’t wash your hands if you don’t have a sink.” Black and Latino renters are the most at risk: In July, 44 percent and 41 percent, respectively, said they had no or slight confidence they could make the next month’s payment or were likely to defer it, according to a U.S. Census Bureau survey. About 21 percent of White renters felt the same, according to an Urban Institute analysis of the data collected between May 28 and June 9. Karin couldn’t stand the idea of a family being pushed out into the streets. “It’s like people are just standing around watching it,” she said. “This time of year, we shouldn’t be able to be evicted with storms. You can’t have homeless people during hurricane season or a pandemic.” Food banks nationwide have struggled to keep up with demand, and surging grocery prices are compounding the strain, said Crystal FitzSimons, the director of school and out-of-school time programs at the Food Research & Action Center. “When families are on limited and stretched budgets, or when they’ve lost wages to lost jobs or reduced hours of work and then food prices go up, their dollars don’t go as far,” FitzSimons said.
