TOPLINE
The coronavirus pandemic has put millions of Americans in financial distress, but new research from the Federal Reserve Bank of New York shows that the economic impact is particularly pronounced for households with children.
A child wearing a mask rubs his hands together with hand sanitizer.
KEY FACTS
Households with children under 18 living at home are more likely to lose jobs and income: Households have lost their jobs in 12.9% of households with children compared to 9.2% of households without them, the study found.
They were also more likely to pay rent than debt: 19.5% of households with children said they paid a rent, mortgage, car loan, credit card, or student loan, compared to 12.5% of households without.
Families with children are also more likely to rely on external support such as unemployment benefits, food stamps and food banks, and financial support from family and friends.
This relapse is even higher among single, non-white households and low-income neighborhoods, the researchers found.
All of this, of course, is only offset by the added burdens of virtual schooling and closed childcare facilities where working parents and caregivers are forced to do so.
Large number
39%. That is the proportion of households with children that reported income loss, compared to 30.8% of households without.
Crucial quote
“It simply came to our notice then [households with children], and especially those led by a single parent, about food and financial support from social networks, such as government assistance in the form of SNAP and unemployment benefits since the beginning of the COVID-19 pandemic, ‘the researchers wrote. “While a greater reliance on assistance undoubtedly foresees the pandemic, the high rates of loss of employment and income by households with children has clearly increased the importance of such support.”
Key background
Several key benefits of the CARES Act have expired – particularly additional unemployment benefits and eviction protection for certain tenants – but the Trump administration and top Democratic lawmakers are unable to agree on what the next round of federal incentive legislation should look like. The $ 3 trillion Heroes Act, passed by the Democratic-led House in May, included additional support for federal unemployment and food assistance, along with another round of direct incentive payments and emergency pay for essential workers. The Republican-led Senate never passed the bill, although last month it released its own plan – the Heals Act. When Democratic lawmakers and White House policymakers failed to reach a compromise last week, President Trump took executive action over the weekend with respect to improved unemployment benefits, student loans, protection from eviction and a delay in tax service. However, these actions alone are unlikely to be as effective in supporting the economy as congressional legislation.
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