Pandemic took bite out of US economy. Yet millions escaped poverty.

Ann Hermes/Staff
Melanie (left) a volunteer with Food Bank of Eastern Oklahoma, places fresh produce in the back of Ashley Kennedy's car as a part of the Free Family Farmer's Market outside of Rosa Parks Elementary school on July 13, 2021, in Tulsa, Oklahoma.

When the coronavirus pandemic shuttered much of the economy in the spring of 2020, about 1 in 7 U.S. workers abruptly lost their jobs. For context, that’s more than twice the scale of job losses seen during the Great Recession of 2007 to 2009. Help was needed, and fast.

As Congress was moving to pass relief legislation, Melissa Kearney and Luke Pardue, both University of Maryland economists, researched the difference that cash payments could make for affected households.

The economists found that average workers in the hard-hit leisure and hospitality sector, for instance, were earning just $20,000 a year, owed about $1,000 in monthly rent, and often had kids to support.

Why We Wrote This

During economic hard times, one role that government can play is shock absorber. New Census Bureau data show the difference that Congress’ quick assistance made for millions of Americans in 2020.

Federal actions at the time included stimulus checks and expanded unemployment insurance – and this week the U.S. Census Bureau released data on the resulting boost. There was still hardship, as the aid didn’t always get quickly to those who needed it most.

But in all, more than 17 million Americans avoided poverty thanks to pandemic relief programs – in addition to more than 30 million who were already lifted above the poverty line by existing federal programs like Social Security. 

The federal aid came at a cost – adding to national debt. But conservative economic analyst Scott Winship summed up the outcome this way in a tweet this week: The “CARES Act and other extraordinary policy measures from last spring worked.”

SOURCE: U.S. Census Bureau, U.S. Bureau of Labor Statistics, World Bank
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Jacob Turcotte and Mark Trumbull/Staff
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