Stimulus checks were distributed to millions of American taxpayers earlier this year, and the $1,200 stimulus money helped a lot of people from falling into poverty after losing their jobs.
However, records show that after the relief has ended, the poverty rate in America has risen in the past few months, as the people used their stimulus money to pay debts. Hundreds of businesses were forced to close down or trim their operation hours.
Stimulus money helped millions of Americans
According to research conducted by professors at the University of Notre Dame, Zhejiang University in China, and the University of Chicago, the poverty rate fell from 11 percent in February to 9.3 percent in June.
The whole decline could be connected to the one-time federal stimulus checks of $1,200 for single taxpayers and $2,400 for married couples, plus $500 for each dependent.
Lawmakers had passed an expansion of the unemployment program as they broadened it to help the jobless by adding a $600 boost every week and extending the duration of the benefits. But in July, the $600 enhancement program ended.
Struggling to make ends meet
While the White House and Congress continue to negotiate a new stimulus package, both Republicans and Democrats remain at the opposite side of the table.
Without additional help from the government, more people, particularly Black Americans, children, and those with high school education, fell into poverty this year. According to the researchers, the rate rose to 11.1 percent last month, as reported by CNN.
The authors stated that for families and individuals under the low-income line, the government response to the COVID-19 pandemic had prevented them from hitting the poverty line. But these gains have faded because some of the benefits already ended.
According to the U.S. Census Bureau, these figures are different from the nation's official poverty rate. The 2020 data will not be released until September 2021.
In another study that was done by the Columbia University's Center on Poverty and Social Policy, it was found that the checks and the benefits given by the government had helped more than 18 million people out of poverty in April.
The expiration of the assistance had increased the monthly poverty rate to 16.7 percent in September, which is higher than the pre-pandemic levels.
In September, only 4.3 million people were kept out of poverty, and it was due to the broadened unemployment program that was also given to the freelancers, the self-employed, the independent contractors, and those who were affected by the pandemic.
If the relief package of $1,200 were not given last March, the poverty rates would have been higher over the past few months. The increase in the poverty rate has hit the Black community and the Hispanic community the most.
Around 12 percent of White Americans fell into poverty last month, but it was 25.2 percent for Black Americans and around 25.8 percent for Hispanic Americans.
If the second round of stimulus checks will be given before the year ends, it could help those in the poverty line to purchase their basic needs or to pay their debts.
As reported by The Washington Post, the Republican Senate has proposed $1.8 trillion in stimulus package but was declined by House Speaker Nancy Pelosi, who stated the Democrats would not go below $2 trillion in the stimulus package.