COVID-19 Will Probably Cause Poverty to Decrease

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

Jason DeParle reports on a study that says the COVID-19 pandemic will cause poverty in America to increase sharply:

If quarterly unemployment hits 30 percent — as the president of one Federal Reserve Bank predicts — 15.4 percent of Americans will fall into poverty for the year, the Columbia researchers found, even in the unlikely event the economy instantly recovers. That level of poverty would exceed the peak of the Great Recession and add nearly 10 million people to the ranks of the poor.

Wait. This doesn’t make sense. If you stay employed throughout the pandemic, then you won’t fall into poverty. If you’re laid off or furloughed, then you apply for unemployment benefits. Thanks to the coronavirus rescue bill, those benefits are higher than your normal pay for anyone with a low income. It’s quite possible, in fact, that poverty will decrease thanks to the CARES Act. So why does—

There are significant caveats. Most important, the model does not yet include the potentially large anti-poverty effect of the Cares Act, the emergency legislation last month that provides about $560 billion in direct relief to individuals and even greater sums to sustain businesses and jobs.

Oh for chrissake. What’s the point in writing something so wildly misleading? The CARES Act was passed more than two weeks ago. That’s plenty of time to incorporate it into models of poverty. Why waste time on alarmist nonsense based on a fantasy world that doesn’t exist?

I understand that state unemployment agencies are overwhelmed right now, which means that unemployment benefits are slow to get approved. That’s a legitimate problem. But eventually things will settle down, and when they do people are going to discover that in addition to their $1,200 checks, they’re also getting a substantial upward bump in pay while they’re unemployed. For some reason, though, the nation’s press corps is oddly reluctant to write about this. I don’t get it.

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

payment methods

FACT:

Mother Jones was founded as a nonprofit in 1976 because we knew corporations and the wealthy wouldn't fund the type of hard-hitting journalism we set out to do.

Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate