The researchers said their findings contradicted the narrative that stimulus payments and unemployment benefits were “too generous” and discouraged work.
After losing both of her jobs at the start of the pandemic, Ella Li used up her savings to feed her daughter and cover the rent for a Chinatown apartment.
Friends rallied and shared food, and her daughter’s school provided meals, but her savings still dwindled, she said. Then came a crucial infusion of funds from the federal government.
“I could pay the rent with the stimulus check. It was very useful for the rent and the food, ”Li said Tuesday.
Li is one of roughly 1 million New Yorkers who avoided sliding deeper into poverty last year thanks to federal stimulus payments and higher unemployment checks, new analysis from Hunter College shows , Columbia University, and the Robin Hood Foundation’s Poverty Tracker Team.
New Yorkers on unemployment insurance got a $ 300 additional per week from the federal government, as well as three separate payments through the CARES Act (Coronavirus Aid, Relief, and Economic Security) and the American Rescue Plan. These payments kept the city’s poverty rate at 20% in 2020, down from 16% in 2019, but avoided what would have been an even bigger spike last year, reaching 35% without the aid. emergency, the researchers discovered.
The report, released Wednesday, highlights the experiences of 38 low-income New Yorkers who were able to cover their rent, buy food and pay off their debts despite losing jobs and wages in the wake of the pandemic . Columbia and the Robin Hood Poverty Monitoring Team interviewed each of the participants at approximately six-month intervals between July 2020 and May 2021 to learn more about the financial impact of the pandemic and how which they used their stimulus and unemployment checks.
“Direct cash payments were the most useful tool to help people overcome the pandemic,” the report concludes. “It has helped families pay their bills and has often allowed parents to stay home to care for school-aged children during distance schooling.”
Like Li, most of the participants said they used the money to cover rent and buy food. Others said the extra help helped them cope with growing debts after taking into account their immediate needs. A 32-year-old woman named Lucia told researchers she managed to pay off her $ 15,000 to $ 8,000 credit card bill between July 2020 and January 2021 with the help of additional unemployment insurance. Another woman, Maya, 39, said she owed the credit card companies nothing before the pandemic, but ran up $ 10,000 in debt after losing her job. She said she was able to pay some of that with her federal stimulus checks.
The Poverty Tracker team previously found that nearly half of workers in New York City, including 57% of low-wage workers, lost income at the start of the COVID-19 pandemic. About 52% withdrew from their savings to cover expenses, and 29% accumulated additional credit card and loan debt, financial burdens that threatened to push them further into poverty.
In recent months, Li, a Chinese immigrant, has become a US citizen, continued to take English classes at Henry Street Settlement, and has applied for relief through the New York Excluded Workers Fund. She said she returned to work in May, taking shifts at a Manhattan daycare and a nearby grocery store.
Poverty Tracker researchers said their findings contradicted the narrative that stimulus payments and unemployment benefits were “too generous” and discouraged work.
“People are really interested in going back to work, but the situation is really complex and the cash assistance has solved the complexities, like distance learning, childcare and changing jobs because the jobs that they had weren’t coming back, ”said Robin Hood, chief of grant strategy. Sarah Oltmans.
Oltmans said the financial aid particularly helped mothers like Li, who were forced to take on a disproportionate number of childcare tasks as they tried to make a living.
“What struck me the most was the balance for women, especially mothers, who could look after children when childcare is gone, looking after other members of the family. family and work part-time, ”she said.