Study: 8 Million More Americans Are in Poverty After Stimulus Talks Collapsed

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A Columbia University study found that eight million more Americans are in poverty after coronavirus relief stimulus talks collapsed, a sign that “The COVID-19 crisis has induced both the largest declines and subsequent increases in monthly employment ever witnessed in the U.S., and has made clear the importance of high-frequency data on family well-being to inform policymaking.”

Congress approved the CARES Act in March, which provided qualifying Americans with a one-time stimulus check of $1,200 as well as a $600 boost to unemployment benefits. The legislation prevented many Americans from slipping into destitution as the coronavirus pandemic began to wreak havoc on the economy. However, things have changed since CARES Act benefits expired at the end of July and with no stimulus package approved since then amid infighting in Congress.

“Our findings show that the monthly poverty rate increased from 15% to 16.7% from February to September 2020, even after taking the government’s response (primarily the CARES Act, which we describe below) into account,” the researchers wrote. “We find that at the peak of the crisis (April 2020), the CARES Act successfully blunted a rise in poverty; however, it was not able to stop an increase in deep poverty, defined as resources less than half the poverty line.”

“We also find that the expiration of government income supports at the end of July 2020 has contributed to an increase in poverty rates in August and September,” they continue. “The CARES Act’s stimulus checks and unemployment benefits lifted more than 18 million individuals out of monthly poverty in April, but this number fell to around 4 million individuals in August and September after the expiration of the $600 per week unemployment supplement. The increases in poverty have been particularly acute for Black and Hispanic individuals, as well as for children.”

Negotiations in Congress have stalled with no end in sight. It is unlikely that a new stimulus package will be approved before November 3, the day of the general election. A separate study, this one from the University of Chicago and the University of Notre Dame, found six million Americans fell into poverty within the last three months alone.