Melissa Harris-Perry: Welcome to The Takeaway, I'm Melissa Harris-Perry. More than 600,000 Americans have lost their lives to the COVID-19 pandemic. Alongside the pandemic's massive illness and death toll is the economic devastation it has brought. Over 9 million US workers lost their jobs during the first three quarters of 2020.
Faced with an impending poverty pandemic, federal lawmakers acted swiftly. They sent out stimulus checks. They expanded unemployment insurance, they increased food subsidies, they implemented the eviction moratorium, and they established cash payments for the child tax credits.
In short, when they saw how many Americans were in peril, elected representatives worked together to expand the social safety net. According to a recent Urban Institute report, the result of these efforts was to lift nearly 20 million people in the US above the poverty line and reduce American poverty to its lowest rate on record.
Now, some of you told us about what unemployment insurance benefits have meant to you and to your families during the pandemic and whether you're worried about the end of federal unemployment benefits in early September.
Tanya: Hi, my name is Tanya, I'm from Tampa, Florida. For the first time in my 20 years of employment, I received unemployment benefits during the recent pandemic after I was laid off from a sales position of 15 years. Without those benefits, I would certainly be homeless and unable to feed my kids because I don't have a lot of education.
I had only 15 years in sales. Not a lot of work background.
Alexis: I received benefits and it was a lifesaver. Unfortunately, I found out that my part-time assistantship job for grad school that paid $300 a week was too much to qualify for unemployment, even though I had been let go by my other part-time job and told to apply for unemployment.
As a result, I now have to pay back money, nearly $3,000 in addition to not being able to receive the assistance that was helping make ends meet. Now I have no idea what I'm going to do because I can't go back to work full time due to not being able to afford childcare because I have another little one on the way. Yes, I've been extremely worried about it ending and I have no idea what's going to happen next. This is Alexis, and I'm calling from Phil County.
John Abbott: Hi, this is John Abbott from Hopewell, New Jersey. As a self-employed music teacher and musician, the unemployment benefits are a godsend. I tried to bank as much as possible to prepare for the time when the benefits will stop. In the meantime, I'm working to rebuild my teaching practice and get more performance work. I pray the impact of the Delta variant will be minimal but with the quadrupling of cases here in New Jersey, I'm not counting on it.
Melissa Harris-Perry: We're going to have more on the federal unemployment benefits a bit later in the hour, but first, we're going to talk about this recent decline in poverty rate and what policymakers can learn from it with Sarah Beth Gehl, research director at the Southern Economic Advancement Project. Welcome to the show, Sara Beth.
Sarah Beth Gehl: Thanks so much for having me.
Melissa Harris-Perry: First, how clear is it that the decline that we're seeing in poverty is caused by and due to the increased government spending?
Sarah Beth Gehl: It's very clear in the data already and we actually released a report last week, Pandemic to Prosperity, South, where we're tracking different indicators. One of them that we're tracking is this monthly poverty estimate. You can really see, month by month, how different assistance programs impacted the poverty rate.
Stimulus checks arrive, and the poverty rate plummets, particularly for children. The Federal unemployment expires, and the poverty rate goes back up. You can really see in real-time how these assistance programs are impacting people who are living in poverty or near poverty.
Melissa Harris-Perry: On the one hand, this feels like "koodos", like, "Look, here, we have empirical evidence that when we spend and we spend in these targeted ways to directly help Americans and their families, we lift people out of poverty." Why would there be any bad news here? What are the critics of this?
Sarah Beth Gehl: Well, absolutely, it's great news and one thing I would say is these are old programs. Unemployment Insurance has been around since the 1930s. Earned Income Tax Credit, Food assistance, the '60s, and '70s. The child tax credit, the '90s. These are bipartisan programs. They've been put in place and supported across party lines.
Really, what it's showing us is that we have the programs and mechanisms in place to attack poverty and we've just flexed the muscle of those programs right now. I think that the question going forward is how much we want to flex that muscle outside of the pandemic. I think that critics will come and say that it is too costly, but I think that it's just a budget question in the end. What are we willing to spend if our goal is to reduce poverty?
Melissa Harris-Perry: Of course, there's an old saying that budgets are moral documents. If you want to know what you believe in, look at where you spend your money. How do we move on this great pandemic news? This is like the one great piece of news out of the pandemic is this idea that all right we've got the tools. If we resource those tools, we can actually change the economic future of America's most vulnerable. How do we create the political will to do that?
Sarah Beth Gehl: Part of these programs were safety net programs like Food Assistance, but others were really programs that were widespread universal, like the stimulus checks. That was all about keeping the economy humming. This isn't just about anti-poverty programs but our economy depends on folks having confidence, being out there spending, and having enough money to spend.
I think that part of the conversation is not just the safety net and anti-poverty but really how we're going to bring the economy out of this pandemic. Really restore it and help it to grow. One of the ways to do that is to ensure that folks have enough money to spend. I think that it's both the moral and the economic argument that needs to be made.
I think that's exactly the policy conversation we will be in in the next few months as a lot of these programs reach their end.
Melissa Harris-Perry: On the one hand, I want to jump rope and cheerlead and be excited. On the other hand, how do I square these graphs, these data points with the stories I've been hearing from across the country about hunger during the pandemic, about experiences of homelessness? The poverty line as a statistical measure is one thing, but how are poor people, actual humans, experiencing this pandemic moment?
Sarah Beth Gehl: That's a great question and I think that it really gets to the poverty line is one figure, and it's in the aggregate. It looks across an entire year and a lot of these assistance programs were really episodic. You would get a stimulus check and that might help you make ends meet for a few months, but then it went away. Or you would get unemployment insurance and the extra federal unemployment insurance, and then it would expire.
We see this kind of lurching that happened that, if you're looking at an annual poverty rate, really doesn't capture and so families could really benefit for a few months and then dip back down into poverty. I think that's also an important part of the policy conversation is how we ensure that people are not lurching back and forth over that poverty line. That the safety net really gets them to a place where they have the ability to go look for a better paying job. They have the ability to go get training and skills development and they're not seeing that kind of up and down cycle that can happen when these benefits come and go.
Melissa Harris-Perry: One of the issues that we've talked about on this show has been the issue of wealth. When I'm talking about it with students, it's always, think of wealth as kind of how fluffy your mattress is. When the bad times hit, when unemployment comes, when a pandemic hits, if you've got a nice big fluffy mattress, you have something to fall back on.
If it's thin and narrow or not there at all, then you fall down and harm yourself. We know that there is a massive wealth gap between racial groups. Is there any way that the programs that we're talking about right now which are just kind of doing that momentary, and maybe even back and forth lift, can they have an impact on the long-term question of wealth, flattening up that mattress for everybody?
Sarah Beth Gehl: I think that the child tax credit is really where this conversation is going to land in terms of wealth and stability of wealth building, because it is such a momentous effort to really reach in and particularly lift up child poverty, but it's expansive. It's reaching the vast majority of families in the US. The conversation really is going to turn to whether that should be permanent.
Again, like the earned income tax credit, we've had the child tax credit for a long time and the question really is at what level do we need it to be? That's a real opportunity to make that permanent and really begin that wealth building through that tax credit program.
Melissa Harris-Perry: Can you tell us stories of-- just in order to take the policy and make it real for folks, some of the folks maybe that you've worked with individual people or families that can really help us to see what these policies have meant?
Sarah Beth Gehl: Last fall, we did a survey with a tech company, Propel, through their Fresh EBT app. These are households who are using food assistance SNAP. We asked about challenges in the pandemic, but we also asked, are there any programs that are making a difference for you? Overwhelmingly, it was unemployment insurance, food assistance, and stimulus checks.
We heard people say things like "I was able to catch up on my bills," Deni in North Carolina said that. Eva in Arkansas said, 'Until SNAP went up, it was either buy my medicine or eat." A woman in South Carolina told us, "We never went hungry because of those pandemic EBT benefits."
These programs made a real difference in people's ability to make ends meet, to put food on the table to pay their rent. Finally, we asked folks, "What do you want policymakers to know?"
What was really fascinating to us is people had very specific policy prescriptions that they were giving to policymakers through our survey, but a lot of it was "Come talk to us, hear about our challenges and hear what would make a difference in our lives."
That's something that we're really focused on going forward, particularly with the American Rescue Plan Funds as state and local governments are putting these funds into place. We're doing a really hard push to have a commitment to community engagement so that those folks who are most marginalized can really guide how those funds can help make a difference in their lives.
Melissa Harris-Perry: The Delta variant has increased cases of COVID across the country, but most intensely the spikes we're seeing right in the south and right in many of these places where the need is greatest. Any thoughts about the fact that this pandemic is not over and what that means for the social safety net that we're seeing actually work right now?
Sarah Beth Gehl: Particularly in the south where we focus, one of the things that we talk about a lot is Medicaid expansion. Even if we're seeing the poverty rate fall, which is great news like you and I discussed, the Southern states, in particular, have not expanded Medicaid. You might have a family that jumps above the poverty line, but the parents are still uninsured because of that lack of Medicaid expansion.
They're probably one medical bill away from going back into poverty or going bankrupt. Our perspective is this is the health crisis. It's ongoing and we've got to continue to shore up our healthcare infrastructure, both through our public health system, but also through Medicaid expansion to make sure that people can weather this crisis and that we're marrying those assistance programs like unemployment insurance and SNAP and stimulus checks with the healthcare infrastructure that will ensure that people can get back to work, can have healthy and safe lives.
Melissa Harris-Perry: Sarah Beth Gehl, research director at the Southern Economic Advancement Project. So appreciate you joining us.
Sarah Beth Gehl: Thanks so much, Melissa.
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