A report from the Center on Budget and Policy Priorities (CBPP), “Robust COVID Relief Achieved Historic Gains Against Poverty and Hardship, Bolstered Economy,” outlines the myriad ways innovative relief efforts shortened and prevented hardship during COVID-19. Many of these relief efforts were implemented for the first time, including Economic Impact Payments (EIPs), expanded unemployment insurance, the Child Tax Credit (CTC), an eviction moratorium, and a federally funded emergency rental assistance (ERA) program. These efforts resulted in the shortest-ever recession – lasting only two quarters – and a dramatic decrease in poverty, with eight million individuals moving above the poverty line in 2020.
Despite widespread employment instability during the onset of COVID-19, evidence suggests that pandemic relief measures dramatically decreased poverty and financial hardship. Using the Supplemental Poverty Measure, the authors determined that without government assistance, the number of people in poverty would have increased by nine million in 2020. With government assistance, however, the number of people in poverty decreased by eight million. The effects of these interventions were greatest for groups that disproportionately experienced poverty prior to the pandemic: 8% of Black and Latino people exited poverty in 2020 compared to nearly 4% of white people.
These measures also allowed households to meet their basic needs. Food insecurity, for example, declined significantly after the first and second round of EIPs and the first CTC payment. Most low-income families reported using their CTC payment to meet basic needs as well, with 91% of families reporting they used their payment on food, utilities, rent or mortgage, clothing, and education costs. Meanwhile, ERA has helped over three million households – 88% of which are extremely low-income or very low-income – pay their rents and remain stably housed.
These relief measures also helped bring about a swift economic recovery. The start of the pandemic led to widespread job losses, with 22 million jobs lost in March and April 2020. Following the passage of the CARES Act, however, unemployment began to fall sharply. The current unemployment rate of 4% is just slightly above the pre-pandemic rate of 3.5%, though labor force participation is down from pre-pandemic levels. Unemployment has affected groups differently, with women, people of color, individuals without a bachelor’s degree, and individuals who were foreign-born disproportionately experiencing job losses at the start of the pandemic. Some of the groups that were most affected, however, also saw the greatest gains during the recovery, with employment increasing 15.5% for Hispanic workers between April and December 2020, compared to 10.9% for white workers during the same period. Even so, despite such gains, data from the Economic Policy Institute indicate that unemployment gaps across racial and ethnic groups have widened during the pandemic.
The report indicates the importance of learning from these relief efforts to address hardships that predated the pandemic and suggests that policies included in the “Build Back Better Act” – such as the expansion of the Child Tax Credit, Housing Choice Vouchers, Medicaid, and free and reduced lunch programs – could serve to address the pressing social issues that preexisted COVID-19.
The report can be found at: bit.ly/3C97qbK