Depleted CARES law leaves more poverty than before the pandemic
The $ 2.2 trillion CARES Act provided for one-time payments of $ 1200 for most households, with an additional $ 500 per child and an increase in unemployment insurance.
However, two new studies, one from Columbia University Center for Poverty and Social Policy, the other by researchers from Universities of Chicago and Notre-Dame, found that since this federal aid dried up, poverty rates have reached higher levels than before the pandemic. Unsurprisingly, this latest study found that poverty rates disproportionately affected black families.
The expiration of the CARES law was predicted, but the economy is rebounding too slowly to make up for the losses, reports the Times.
“These numbers are very concerning,” Bruce D. Meyer, University of Chicago economist and study author, told The Times. “They tell us that people have a much harder time paying their bills, paying their rent, putting food on the table.”
In May, the aid program lifted 18 million Americans out of poverty, according to the Times. Since then, however, many provisions of the aid package have expired and the poverty rate is now higher than it was before the pandemic.
“The Cares Act was unusually successful, but now it’s gone, and a lot more people are poor,” Zachary Parolin, author of the Columbia analysis, told The Times.
Can rushed census data be reliable?
The collection of census data will be shortened by two weeks so that President Trump can access it ahead of the election and make decisions on the number of members of Congress from each state, reports the Guardian.
Don’t worry, said the US Department of Commerce, because it has already counted 99.9% of American families. But can we trust this figure? Not so much, according to the Guardian.
“Completion rates of 99.9% are a smokescreen and are misleading,” Terri Ann Lowenthal, census expert and consultant for the Leadership Conference Education Fund, told The Guardian.
The two main concerns are that families have been poorly counted or left behind. Those most likely to have been inaccurately counted or excluded from the data are immigrants and low-income minorities, reports the Guardian.
Self-reported census data is considered the most accurate collection method. 66.8% of Americans filled out their own answer this year, about as many as 2010. The remaining third was either found by a door-to-door enumerator or enumerated by ‘proxy’, according to the Guardian, meaning that if no one answered, the enumerator likely asked a landlord or neighbor to guess. the number of individuals in a household.
“A very large number of households have been counted in such a way as to ensure errors and inequalities and less quality data than we could have in two or three weeks,” former Census Bureau director Kenneth Prewitt told the Guardian.
Census data directs over $ 1.5 trillion in federal funding to state and local governments, and that money will go to areas that are overvalued, not to those that are undervalued, according to NPR marketplace, which means that areas with low income households will incur the deficit.
Bank of America Launches Low Dollar Payday Loan Program
In an effort to alleviate some financial stresses induced by the pandemic, Bank of America will begin offering small “payday type” loans called “Balance Assist” loans to its members who have had a BoA checking account for a year or more, reports Time for credit unions.
Members can borrow up to $ 500 for three months for a lump sum of $ 5, with APRs ranging from 29.76% for a $ 100 loan to 5.99% for a $ 500 loan, a fraction of the cost of standard payday loans, which have APRs greater than 400 percent. Loans must be repaid in three equal monthly installments, reports Credit Union Times.
BoA responds to persistence urging consumer groups for banks and credit unions to offer smaller, more realistic loans to help consumers avoid debt traps with predatory lenders.
BoA, based in Charlotte, North Carolina, plans to launch the program in some states by January and the rest by the end of March, reports Credit Union Times.
“With loans like this, as long as we are talking about double-digit APRs and significant cost savings for consumers compared to non-bank loans, price is less important than affordability,” Alex Horowitz, researcher principal at The Pew Charitable Trusts Consumer Credit Project, said Credit Union Times. “What I’m going to watch out for in a program like this is that it reaches people who would otherwise use more expensive products, like payday loans, like securities lending, like overdrafts.”
Claire Marie Porter was an intern at Next City INN / Columbia Journalism School for the fall of 2020. She is a Pennsylvania-based reporter who writes on health, science and environmental justice, and her work can be found in the Washington Post, Grid Magazine, WIRED and other publications.