Money & The Economy

Thanks Democrats: Almost 8 Million Americans Have Fallen Into Poverty In The Past Six Months, Study Finds

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Almost 8 million Americans have fallen into poverty in the last six months alone, according to a joint study by economists at the University of Chicago and University of Notre Dame.

Researchers attributed the spike in the United States’ poverty rate to most households exhausting their stimulus checks and Congress’s failure to extend weekly unemployment checks. Both were issued in March following the passage of the CARES Act, and weekly unemployment benefits expired in July.

The national poverty rate rose from 9.3% in June to 11.7% in November, resulting in approximately 7.8 million additional Americans living below the federal poverty line, the study says.

The benefits granted through the CARES Act helped lower the federal unemployment rate, the researchers said, but the expiration of federal relief and the overall economic toll imposed by the pandemic forced more Americans into poverty even as the unemployment rate lowered.

“The entire decline in poverty through June can be accounted for by the one-time stimulus checks the federal government issued, predominantly in April and May, and the expansion of unemployment insurance eligibility and benefits. In fact, in the absence of these programs, poverty would have risen sharply,” the study’s authors wrote.

The study was released as Congress races to reach a compromise on an additional stimulus bill before the government runs out of funding and as coronavirus cases spike across the country.

After months of both parties refusing to strike a bipartisan deal, congressional leaders have centered themselves around a $748 billion relief bill that includes another round of direct stimulus checks.

The government will shut down Saturday at midnight if Congress fails to pass a spending bill. If lawmakers fail to pass another relief bill approximately 9.4 million Americans stand to lose unemployment insurance, state unemployment benefits and other aid measures established by the CARES Act on Dec. 31, according to a study released by the JP Morgan Chase Research Institute.

Millions of Americans could also face eviction without another relief bill since protections issued through the CARES Act expire at the end of the year as well.

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