Tens of Millions of Americans Face Economic Ruin Unless Congress Gets Its Sh*t Together

Food is loaded as drivers in their vehicles wait in line on arrival at a "Let's Feed LA County" food distribution hosted by the Los Angeles Food Bank on December 4, 2020 in Hacienda Heights, California. - While coronavirus cases continue to surge nationwide and shutdowns return, the US economic recovery stalls with just 245,000 jobs in the final report of 2020 as the unemployment rate fell to 6.7 percent, according to Bureau of Labour Statistics. (Photo by FREDERIC J. BROWN/AFP via Getty Images)

By Keya Vakil

December 17, 2020

Unemployment claims hit the highest weekly total since September and nearly 8 million Americans have fallen into poverty since June.

Nine months into the coronavirus pandemic, Americans are experiencing economic devastation and there is no end in sight without help from the government. 

An estimated 885,000 Americans filed new unemployment claims last week, the highest weekly total since September, the Department of Labor announced Thursday. In total, 20.6 million people received some type of unemployment benefits for the week ending Nov. 28. 

“US weekly jobless claims continue to head in the wrong direction,” Edward Moya, an analyst at the currency trading firm OANDA, wrote in a research note. “The labor market outlook is bleak as the winter wave of the virus is going to lead to more shutdowns.”

That report comes just one day after the grim revelation that 7.8 million Americans have fallen into poverty since June, according to data released Wednesday by researchers at the University of Chicago and the University of Notre Dame. The poverty rate currently sits at 11.7%, up 2.4 percentage points since June and on track to be the largest single-year increase since the government began tracking poverty in 1960.

As bad as things are now, things could get far, far worse in the coming weeks and months, unless lawmakers in Congress are able to agree on a stimulus deal. Two federal unemployment programs enacted during the pandemic—the Pandemic Unemployment Assistance program, which provides payments to gig workers and others who don’t qualify for state benefits and the Pandemic Emergency Unemployment Compensation program, which offers 13 weeks of federal benefits to people whose state aid has run out—expire on Dec. 26. As many as 14 million Americans could lose their benefits unless Congress renews the programs. 

While lawmakers in Congress appear to be inching towards a $900 billion coronavirus relief deal, Senate Republicans have obstructed Democrats’ efforts to provide further aid to struggling Americans since May. Instead, they’ve pushed for businesses to reopen and employees to return to work during a public health crisis that has now killed more than 300,000 people in the US. And as the past several months have shown—and economists have said all along—an economic recovery won’t happen until the virus is under control. 

Now, as the year comes to an end, jobless workers are still struggling to find employment amid the crisis and economists have said that the failure to provide further government relief is in part responsible for the surge in poverty.

“There are two ways to counteract this upward trend in poverty: One is a dramatic improvement in the labor market. The other is more support from the federal government. Given the state of the virus, I wouldn’t bet on significant improvement in the labor market in the short run,” James Sullivan, a professor at Notre Dame and one of the new report’s authors told the Washington Post.

Despite the GOP’s long-standing opposition to many social safety net programs, there is abundant evidence they work. The federal government’s largest piece of coronavirus relief, the CARES Act, was passed in March and provided $1,200 direct payments to most Americans  and created a $600-a-week federal unemployment benefit on top of the average $300 weekly state benefits. These measures provided a critical lifeline to tens of millions of struggling people and prevented an estimated 18 million Americans from falling into poverty during the pandemic’s early months.

But the $600 weekly federal benefit expired at the end of July after Republicans refused to extend it. The average unemployment payment fell to about $300 per week in August, making it difficult for unemployed individuals to scrape by.

As part of the current negotiations, lawmakers would provide $300 a week in additional federal unemployment benefits for 10 weeks and $600 stimulus payments to most adults, with an additional $600 for each child per household. 

While those efforts would certainly be better than nothing, it may not be enough to stem the bleeding. 

“An only 10-week extension of [unemployment] benefits would mean MILLIONS would exhaust benefits by the end of February, when the virus is surging and job openings remain scarce. This is shameful,” Heidi Shierholtz, director of policy at the Economy Policy Institute tweeted on Thursday.

Former Labor Secretary Robert Reich added to the pile-on, criticizing the bill for not going far enough. 

“Given the scale and harm caused by COVID and joblessness across America, $900 billion in disaster relief is disgracefully small,” Reich tweeted. “It’s less than the $1 trillion increase in wealth of America’s billionaires since the start of the pandemic.”

Indeed, America’s 651 billionaires saw their wealth increased by more than $1 trillion (36%) between mid-March and December 7, according to a new analysis from Americans for Tax Fairness and the Institute for Policy Studies. America’s largest companies have also thrived, with 45 of the 50 most valuable publicly traded companies turning a profit in 2020, according to a Washington Post analysis. Despite that success, at least 27 of these companies issued layoffs this year, collectively slashing more than 100,000 jobs, the Post found. 

The disparities are striking. While the elite and largest corporations are seeing their wealth grow during the pandemic, poor- and working-class Americans—particularly people of color—and small businesses are struggling. 

An estimated 23% of local businesses were closed on Dec. 1, according to the data firm Womply. That includes 41% of all local bars, 28% of restaurants, and 32% of hair salons and other health and beauty shops. More than 4 million people have also left the workforce since February and the percentage of people who have been unemployed for 27 weeks or longer continues to rise, according to a New York Times analysis of federal data. Additionally, nearly 13% of Americans are experiencing food insecurity, and at least 9% are experiencing housing insecurity. 

The bigger picture doesn’t look any better, either. The US added only 245,000 jobs in November, the slowest month of growth since the pandemic began. Retail sales also plummeted 1.1% in November, according to the US Department of Commerce. The drop was the largest in seven months and came despite an expected surge in sales during the holiday season. Sales could plummet once again in December, as the massive surge in coronavirus cases is causing a fresh wave of business closures.

It’s against this backdrop that Democrats and Republicans continue to negotiate in Congress. If they don’t act—and if they don’t give Americans enough help—there’s no telling how bad things could get. 


  • Keya Vakil

    Keya Vakil is the deputy political editor at COURIER. He previously worked as a researcher in the film industry and dabbled in the political world.

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