A new report finds that the direct relief checks that were sent out as part of the stimulus packages passed by the federal government significantly reduced hardship for families, particularly low-income families.
The University of Michigan report, first reported on by The New York Times, used Census Bureau data to analyze hardships faced by families over the course of the pandemic. The report authors found that hardships like financial instability fell sharply from December 2020 to April 2021, during which time the federal government sent two stimulus checks to most Americans, totalling $2,000.
The analysis found that food insecurity fell over 40 percent in that time, financial instability fell 45 percent and common symptoms of depression dropped by 20 percent. The sharpest declines happened right after the checks were passed in December and March.
“Our analyses thus far have yielded a fairly simple story: throughout the crisis, the level of hardship faced by U.S. households can be directly linked to the federal government’s response,” writes the report authors. They find that, while the economy’s recovery may have helped ease hardships, the stimulus checks were likely a larger contributing factor.
Levels of hardship remained relatively steady from spring into fall last year. “This was suggestive of the efficacy of CARES Act income support provisions in stabilizing U.S. households in the midst of a global pandemic and economic crisis,” reads the report. The CARES Act was passed in March of 2020, and in April of last year the Census Bureau began conducting the surveys that the study pulls data from.
Part of the reason that hardships remained stable through that time was the $600 supplemental unemployment checks in the CARES Act that Sen. Bernie Sanders (I-Vermont) had lobbied for. Those checks helped the nearly 1 in 5 American workers who were receiving unemployment benefits by July of last year. The report states that the supplements helped millions of Americans hold back financial and mental challenges.
“We see an immediate decline among multiple lines of hardship concentrated among the most disadvantaged families,” H. Luke Shaefer, study co-author and professor at the University of Michigan, told The New York Times.
Declines in hardships were especially pronounced for adults with children and adults in households with annual incomes less than $25,000. Both groups were facing more food insufficiency, difficulty paying bills and financial instability than other groups, for instance, and both groups saw the sharpest declines in the same areas following the stimulus checks from last December and earlier this year.
Shaefer also argues that direct aid like the stimulus checks are an efficient form of government aid because struggling families know the most about where to spend their money. “Cash aid offers families great flexibility to address their most pressing problems, and getting it out quickly is something the government knows how to do,” Shaefer told The New York Times.
The report’s findings line up with previous studies that have found that household income rose by a record 21.1 percent after this March’s stimulus checks — checks that didn’t get a single Republican vote in Congress.
Reminder: Every single Republican in Congress voted against substantially reducing hardship for the American people. https://t.co/ELJNPaTANl
— Senator Bob Menendez (@SenatorMenendez) June 2, 2021
Congressional Republicans have been against the stimulus checks since the first stimulus was passed, saying that the aid is too broad. But, as the University of Michigan report shows, the stimulus checks reduced hardships for not only the low-income earners but also the people who received checks at the higher end of the income scale. That is likely why Republicans were touting some of the benefits of the stimulus bill despite none of them having voted for it.
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