Will the latest stimulus last long enough?
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The $900 billion coronavirus relief bill that Congress just passed is one of the largest stimulus packages in U.S. history, the largest being the original $2.2 trillion CARES Act passed in March.
The passage of this latest relief took a long time, and a lot of the new help, which includes another 11 weeks of unemployment benefits, doesn’t last much further than early April. That’s a big part of the reason this bill may not go far enough.
And don’t get Curt Spaulding started on government aid. Those one-time $600 stimulus checks?
“What is $600 really gonna do for an individual at this point? Nothing,” he said. “It’s a drop in the bucket for closing our economy down for half a year or more.”
Spaulding co-owns Catmando’s bar and grill in Michigan’s Upper Peninsula. He is going to apply for the next round of Paycheck Protection Program money, but he says there wasn’t enough last time.
“We are losing over $100,000 in revenues — well over that,” Spaulding said. “What do you think that does to me, my family, and more importantly my employees, who are out there struggling right now, not paying their bills, some of them trying to get food stamps?”
But the $900 billion does include a lot: special access to food stamps extended for six months, $300 weekly in extra federal unemployment benefits through March, Pandemic Unemployment Assistance funded into April. All with coronavirus vaccines rolling out.
“This is a lot of firepower, and it would not surprise me if this is all that’s gonna end up being needed,” said Michael Strain, who is with the American Enterprise Institute. “We could have an unemployment rate in the 5-6% range by the summer.”
But if history is any guide, unemployment rates will be higher than that among lower-income and minority workers.
“There are some businesses that closed that may never reopen. There are some jobs that are never going to come back,” said Ashley Harrington, with the Center for Responsible Lending. “So it doesn’t mean that when we do officially get the virus under control, the damage won’t still be there.”
President-elect Joe Biden has promised more relief once he’s in office. But timing, where Congress is concerned, is unpredictable. Diane Schanzenbach, director of the Institute for Policy Research at Northwestern University, said the most recent delays have been costly.
“What we’ve seen, of course, in the last couple weeks is increasingly desperate situations, especially for low-income families,” she said.
And if that desperation means another stimulus is needed as soon as this one ends, well, human desperation didn’t really get Congress to move quickly the last time around.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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