The Critical Consequences of a Low Second Stimulus Check

The final weeks of 2020 were both incredibly stressful and hopeful for Americans. Many looked to the new year for health, prosperity, and a COVID-19 vaccine, while others closely monitored Congress’s back-and-forth on stimulus checks. Once President Trump announced his support of a $2,000 check per person, many Americans hoped that would be enough to push it past Senate Majority Leader McConnell. Unfortunately, it was not.

This past week Americans have begun receiving a stimulus check with an upper limit of $600. It’s important to distinguish, not everyone received $600. This aid was distributed based on a sliding scale, so single taxpayers who made less than $75,000 per year would receive the full $600 check. The more money you make per year, however, the less you receive in aid. Having child dependents could increase the amount of aid you receive; however the IRS only considers ages 16 and under children, unlike for filing taxes.

Low-Wage Workers 

Workers who earn low wages have been disproportionately affected by the pandemic. Massive job losses struck low-wage workers the worst, especially in retail and hospitality which hit unemployment rates of 17.1% and 39.3% respectively. Not only have more low-wage workers been laid off, more of them have also been forced to work in unsafe conditions.

Low-wage workers and communities of color are at higher risk of dying from COVID-19 because of unequal access to healthcare, higher prevalence of preexisting conditions, and structural conditions, like living in densely populated areas.

The reason why low-wage workers continue to suffer the brunt of the deadly virus is because of their inability to work from home. Low-wage workers are six times less likely to be able to work from home. Consequently, they must continue to go to work to earn a paycheck, without the ability to social distance, endangering themselves and their families. Only 34.9% of parents can telework, meaning their jobs and the safety of their children in childcare are at stake.

Without providing substantial aid to low-wage workers and their families the U.S. economy will not stand to recover. The pandemic has made clear that low-wage workers are essential, yet our country continues to treat them as dispensable. When someone can make more from unemployment insurance than minimum wage, then something is desperately wrong.

Small Businesses 

Small businesses are in survival mode due to the pandemic. Many of the safety precautions to stop the spread of the deadly virus are also practices that have forced a lot of businesses to drastically alter the way they operate, or close down completely. Roughly 800 small businesses closed per day between April and September of 2020. In total, almost 100,000 businesses have permanently shut down since the start of the pandemic. Kevin Kuhlman, vice president of the National Federation of Independent Business (NFIB) said, “if economic trends continue at this rate, one in five business owners anticipates they won’t make it until the end of the year.”

Small businesses have been disproportionately impacted, particularly Hispanic and Black owned businesses. Only 34% of small business owners say their business is currently profitable, while that number for Hispanics and Black business owners is 29% and 26% respectively. The disparity lies in access to resources; white business owners were three times more likely to receive funds from the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) than people of color. The pandemic has highlighted the gaps in business ownership, access to resources, and securing credit and loans.

Final Thoughts

Going forward, the U.S. cannot withstand a lengthy recovery from the pandemic. Rather than focusing on the economy and bailing out big corporations, the government must focus on the country’s backbone: the working, middle class. Lack of access to healthcare, financial aid, paid sick leave, and adequate child care are shrinking the middle class and hurting our democracy. According to Economics reporter, Jim Tankersley, “economic research shows that strong middle classes breed political and social stability…the middle class increasingly say the economy is unfair because they see so much income and wealth flowing to the rich.” The greater the gap between the richest and the poorest, the weaker the middle class is, and the more unstable and worse off our country is.

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