October 23, 2020
By Alicia Adamczyk
How to move forward
Another Covid-19 recovery package from the federal government is necessary to help the 23 million Americans still without work and keep inequality from growing even worse.
The CARES Act, passed in March, included $2 trillion in enhanced unemployment, stimulus checks for individuals, food assistance and much more. Aid was disbursed quickly and was well-targeted to those who needed it, say the experts interviewed for this article. Fewer people fell into poverty than would have been expected, according to recent research from Columbia University.
But now many of the most helpful provisions have expired. Yet the crisis is ongoing, and though some jobs have come back, the recovery has flat lined. Meanwhile, Congress has been negotiating another deal for months but has so far been unable to agree on what to include in the next aid package.
Without more relief, everyone loses, says Eliza Forsythe, a labor economist and assistant professor at the University of Illinois at Urbana-Champaign.
“Some economists believe if we had been more proactive, we could have gotten back to recovery faster,” says Forsythe. “The CARES Act was really successful in terms of mitigating the effects. But we’re not giving [workers] more support. That prolongs the recovery.”
Enhanced unemployment benefits, a sticking point of the negotiations between Democrats and Republicans in Congress, are important. They helped prop up the economy in the early months of the crisis, says Forsythe, ensuring families could pay all of their bills. Without them, households are falling behind.
Just as important as the benefits themselves is the continuity of providing them, says Megan Curran, a researcher at the Columbia Center on Poverty and Social Policy. Households need the short- and long-term assurance that they will have income.
“We know that when families are experiencing huge fluctuations in income, it can have a [domino] effect. It can lead to them losing their homes, or to debt that can end up costing them way more than the original bill,” says Curran. “Without action even more folks are going to be losing out.”
Federal assistance for state and local governments is also crucial, says North Carolina Budget and Tax Center’s McHugh. With tax revenues down across the country, this would allow local governments to offer more aid to their citizens.
Now is the time to think big, says William Darity, a professor of public policy at Duke University. The virus has demonstrated the need for an expanded national health-care program and a federal jobs guarantee.
The latter would essentially be a national payroll to ensure people could have income whenever there was a need, not on the “sporadic basis” Congress is providing now, says Darity. Nationalized health care would mean that if people lost their jobs, they wouldn’t automatically lose their health insurance.
Without more relief, inequality in the U.S. will continue to grow. That hurts individuals and families, and the economy as a whole.
“The data is clear that the need is high,” says Curran. “As a poverty researcher, we’re trying to sound the alarm here. We know action that was taken earlier this year worked, but we know that it wasn’t enough and we know that families need more. Congress can do something, but they need to take action.”