Stimulus checks, unemployment benefits lift 1.6 million out of poverty – Community News
Stimulus Check

Stimulus checks, unemployment benefits lift 1.6 million out of poverty

A woman walks past homeless tents along a street in Los Angeles, California on Feb. 1, 2021.

FREDERIC J. BROWN | AFP | Getty Images

According to economists at the University of Chicago and the University of Notre Dame, more than a million Americans were lifted out of poverty in January as a result of federal incentives and supplemental unemployment benefits.

It’s the first fall in poverty since the summer, they said, though they warned profits could decline quickly without further relief.

Federal lawmakers approved a $900 billion Covid-19 relief measure in December that offered $600 incentive checks and a $300 weekly boost in unemployment benefits. It also expanded unemployment benefits for those normally ineligible, such as the self-employed and gig workers.

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According to Bruce Meyer, James Sullivan and Jeehoon Han, who co-authored the report, the poverty rate in the US fell to 11.3% in January from 11.8% in December.

That means about 1.6 million people lost their lives when the government started handing out payments.

The cut marks a reversal of the growing hardships that emerged after the CARES Act pandemic aid began to dry up last year. More than 8 million people fell into poverty between June and December, the researchers found.

“Our latest poverty estimates, for January 2021, indicate that this relief has reversed the recent trend of rising poverty,” they wrote in a paper released Friday.

In 2021, the federal poverty line is $12,880 in annual income for a single adult and $26,500 for a family of four.

Poverty fell sharply for groups such as blacks and people without university degrees, who had experienced a sharp rise in poverty since the summer.

However, the rates are still high for such groups. The poverty rate for blacks is more than double that of whites, and it’s nearly three times higher for those with a high school diploma or less, compared to those with higher education, the economists said.

Unemployment benefits expire on March 14 for millions of Americans who are out of pandemic aid. However, Congress may soon provide more relief.

The Democrat-led House passed a $1.9 trillion measure on Saturday. The bill provides $1,400 stimulus checks for individuals earning up to $75,000. (After that, the check amount is reduced for those who make up to $100,000.) The bill increases the unemployment benefit by $100 a week — to $400 — and extends payments through August.

More than 19 million people are receiving unemployed assistance, according to the Ministry of Labor.

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