A Year of Hardship, Helped and Hindered by Washington

Soon after, she got a cold and fear spread through the trailer. “My mom is immunocompromised — she said you absolutely cannot be working with the public,” Ms. Stewart said. With school out, her mother also wanted her home to watch her son. Ms. Stewart felt forced to quit working.

As a recently hired part-time worker, she did not think Michigan would approve her request for unemployment benefits. But the new program covered workers who quit to protect medically vulnerable members of their households. Ms. Stewart received $1,250, just for two weeks.

“I was just like, Wow!” she said.

The payments ceased without explanation but resumed a month later at $760 a week, with money for weeks missed. The aid was nearly four times her lost paycheck. It was more than she had ever made — “more than I could even think about before I got it,” she said.

By June, about one in five American workers was getting jobless aid — five times the previous peak. Like Ms. Stewart, roughly 40 percent of them were covered by the new pandemic assistance. And like Ms. Stewart, most saw their incomes grow.

Congress aimed to fully replace the average worker’s pay, but its formula overshot the mark. Three-quarters of the jobless received unemployment checks that exceeded their lost earnings, according to Peter Ganong and colleagues at the University of Chicago, with the median replacement rate at 145 percent. Among the poorest tenth of workers, incomes nearly tripled.

Despite mass unemployment, poverty estimates fell. Researchers at the University of Chicago and Notre Dame found there were five million fewer poor people in June than before the crisis. Jobless people usually cut their budgets, but in this case their spending rose, by as much as 20 percent.

The unemployment assistance was extraordinary but not uniform. Undocumented immigrants were ineligible, as were Americans paid off the books. Some eligible workers did not know to apply, and others encountered a bureaucratic maze. Eliza Forsythe, an economist at the University of Illinois, saw a “lottery effect” at play, with random factors deciding which households got aid. But most eventually did.

Article source: https://www.nytimes.com/2021/02/14/us/politics/coronavirus-poverty.html