As Congress debates issuing a third round of coronavirus pandemic. The results have been mixed, new research finds.to millions of Americans, economists are trying to assess just how effective such payments are in helping nurse the economy through the
While helping keep some families afloat, households earning more than $78,000 have largely socked away the $600 check the U.S. started sending out in December, according to a study from the Opportunity Insights Economic Tracker, a nonprofit research group led by Harvard economics professor Raj Chetty. By contrast, families below that income tend to quickly spend the money.
Perhaps not surprisingly, such findings suggest that lower-income households need the stimulus money to pay for bills and other necessities, while higher-income households generally do not. More revealingly, the analysis highlights the disproportionate impact of the pandemic on poorer Americans.
“We see this massive discrepancy,” said Michael Stepner, an economist with Opportunity Insights. “Since the middle of June, the recession in jobs for higher income households is over — employment has been just like it was before the pandemic” because their jobs can be done remotely.
The findings come as lawmakers debate President Joe Biden’s $1.9 trillion stimulus bill, which would include a. That’s more than the two checks that so far have reached most U.S. households, with $1,200 per adult sent last spring and $600 per person sent in early January.
But much about the pandemic has changed since spring 2020, when the crisis shuttered the economy and affected a wide range of workers. Since then, higher-income workers have largely recovered their footing, with low-income workers far more likely to still be suffering job or income losses.
Meanwhile, Stepner said, jobs for lower-income Americans are still down about 20% compared with pre-pandemic levels due to hits to sectors more likely to employ low-wage workers, such as restaurants or retailers.
“Those are millions of jobs that are lost, and millions at the bottom of the income distribution are still out of work,” he said.
The research may provide ammunition for lawmakers who have criticized the stimulus checks as failing to provide targeted relief, such as Senate Minority Leader Mitch McConnell, who described an earlier effort to send $2,000 stimulus checks as “socialism for rich people.” The Biden administration says two-thirds of checks have gone to families with less than $90,000 in income.
By analyzing credit and debit card spending data, Stepner and his…
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