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Stimulus check update: A fourth payment would be critical for many, study says

WJW FOX 8 News Cleveland
WJW FOX 8 News Cleveland
 2021-10-17

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(NEXSTAR) – As the U.S. confronts rising inflation, slower job gains and a crippled supply chain, a new study finds that the Americans most in need of a stimulus check at the beginning of the pandemic continue to suffer most.

The three rounds of stimulus checks spanning two presidencies were critical to lower earners, researchers with the Capital One Insights Center found, but didn’t go far enough.

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The study started in 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 virus’ impact, from how they used their stimulus checks to their view of the U.S. economic recovery.

The respondents fell into three annual income groups – less than $25,000, $25,000 – $100,000 and over $100,000. Lower earners were much more likely than other groups to have spent the final stimulus payment on bills, the study found.

Part of the reason for that, researchers said, was the lack of recovery for the nation’s poorest.

A lopsided recovery

The study found that while job and income loss was devastating during the spring 2020 wave of COVID-19 in the U.S., how Americans faired in the year since varied greatly depending on several factors.

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

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

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

According to U.S. Census findings , the median household income in the U.S. went down by 2.9% from $69,560 in 2019 to $67,521 in 2020, the first time it had significantly dropped since 2011. The real median earnings fell 1.2% from $42,065 to $41,535, as did the number of full-time workers, which fell by 13.7 million.

Calls for fourth stimulus check

For many Americans, finding the money for looming mortgage, credit card and utility bills is a monthly cycle of anxiety. The study found that in April of 2021, 46% of lower earners said they would have come up short in paying their expenses without the stimulus money.

After the third stimulus check – the $1,400 payment under the American Rescue Plan – that balancing act became tougher for many lower earners. Nearly a third of low earner reported in August 2021 that they had to borrow money from friends and family to take care of their bills.

The cost of childcare compounded the struggle to pay bills for many, with 50% of lower earners and 30% of middle earners saying in August that they were either forced to cut back on working to take care of children or give up their jobs entirely. This is compared to 18% of higher earners.

While it seems unlikely that Congress will approve a fourth round of stimulus checks – as Republicans and Democrats spar over funding the government and the Biden administration’s now-$2 trillion spending package to improve social services and fight climate change – Capital One Insight Center researchers aren’t the only ones calling the stimulus payments critical to the U.S. recovery.

In September, nonpartisan advocacy group The Senior Citizens League (TSCL) warned that the cost of goods and services is rising for people with fixed incomes, months before next year’s federal cost-of-living bump.

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Government economic experts estimated recent increases in inflation mean the cost-of-living adjustment (COLA) for 2022 will approach 6%, a whopping jump from the 1.3% COLA awarded for this year.

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

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Comments / 38

Melissa Hitz
10-19

We Americans could use another check due to all the things that are going up in price, gas, groceries and other things. And I mean all Americans!! Not the one’s they think need it? To be fair give to all Americans!!!

Reply(1)
16
Tennessee viewer
10-19

I know somehow they are going have to give DISABLED ON SSI SOME HELP ASAP they don't realize what we are going through right now I have the WORSE stage of copd and chronic lung problems I called the refills in on my medicine Fri and hadn't been able to get my inhalers and other medicine because I couldn't come up with the 6 dollar copay I called my pharmacy this morning to make sure they didn't put it back and told them I was trying to come up with the copay to get them they told me that they knew how bad my breathing was and to come on and get it that she would pay for it for me that's pretty DAM bad that we're struggling so hard that the lady that works at the pharmacy has to pay for my medicine for me and that I don't even have 6 dollars to pay it myself President and Congress your the one's that need to HELP THE DISABLED ON SSI it's a shame that you have forgot about this countries DISABLED

Reply
16
Helen Vincent
10-18

No it not there on are side of the track they give there self all the pert them want it’s us low class people an senior that are suffering a lot of can’t work anymore do to are health an would if we would

Reply
8

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