by Lena Simet and Amos Toh
The COVID-19 pandemic in the United States has left millions of people struggling to make ends meet. Massive government spending, especially the stimulus checks, has provided crucial relief. But the checks are just a band-aid for a U.S. social safety net that has been shredded by decades of budget cuts and draconian rules.
As analysts with the nonprofit group Human Rights Watch, we looked closely at recent census data regarding these stimulus checks. We found that of the nearly 40 million adults living in a household that received a stimulus payment in mid-May, 60% spent a portion on food, 49% on rent or mortgage, 44% on utilities and 24% on car payments.
In other words, this money is going to essential needs, not frills or already-flush bank accounts.
Nearly 45% of households making less than $35,000 a year used the checks to cover three or all four of these necessities. The census data also reflect racial inequalities: 88% of Black adults relied on the payments for at least one of these necessities versus 66% of white adults.
We interviewed dozens of app-based “gig” workers in Texas about how they spent their stimulus checks. Gig workers are a growing segment of the U.S. workforce that is largely low paid and made up of workers of color. Many said the payments helped them keep a roof over their heads and put food on the table, but the relief was temporary.
A 29-year-old delivery worker and mother of two said the money “comes and then goes so quickly.” A 59-year-old delivery worker said it helped pay her bills but she was “so far behind” that “they rack up as soon as you pay them.”
Irregular cash payments can’t fix long-standing problems with the social safety net. Census data shows that only 36% of households earning under $50,000 who lost labor income received unemployment benefits, even though these were expanded during the pandemic.
Workers struggled to navigate stringent and complicated eligibility requirements, frequent website glitches, excessive wait times on helplines and lengthy processing delays. The Labor Department’s inspector general said state unemployment agencies struggled to overcome “antiquated IT systems” and “insufficient staffing” as they tried to process the surge in claims.
A 25-year-old rideshare driver we spoke to said she stopped driving in March 2020, as COVID-19 was spreading rapidly. But the Texas unemployment agency did not approve her application until two months later, as her savings ran dry and she had resumed driving.
The 29-year-old delivery worker told us the unemployment agency denied her application, saying it couldn’t verify her identity. She tried calling the agency for hours and submitted multiple appeals, but to no avail.
Beginning in June, gig workers in Texas and 20 other states stand to lose eligibility for extended unemployment benefits. These states are ending pandemic unemployment aid early, even though Congress extended these measures until September. With one in four adults nationally still facing difficulty covering household expenses, cutting benefits is the wrong approach.
As various states and the federal government disagree on how best to provide relief, the priority should be ensuring long-term economic security and overhauling a badly frayed safety net. Everyone should have the protection they need to secure their basic human rights.
Lena Simet and Amos Toh are senior researchers at Human Rights Watch. Quantitative analyst Brian Root provided analysis of census data.
