The coronavirus pandemic has thrown millions of Americans into financial distress, but new research from the Federal Reserve Bank of New York shows that the economic impact has been especially pronounced for households with children.
KEY FACTS
Households with children under 18 living at home are more likely to have lost jobs and income: household heads lost their jobs in 12.9% of households with children compared to 9.2% of households without them, the study found.
They’re also more likely to have missed rent or debt payments: 19.5% of households with children said they skipped a rent, mortgage, auto loan, credit card, or student loan payment compared to 12.5% of households without.
Families with kids are also more likely to rely on external support like unemployment benefits, food stamps and food banks, and financial support from family and friends.
This reliance is even higher among single-parent, non-white households and households in low-income neighborhoods, the researchers found.
All this, of course, is only compounded by the added burdens of virtual schooling and closed childcare facilities that working parents and caretakers must contend with.
BIG NUMBER
39%. That’s the portion of households with children that reported income losses, compared to 30.8% of households without.
CRUCIAL QUOTE
“Our results reveal high reliance by [households with children], and especially those headed by a single parent, on food and financial support from social networks as well as government assistance in the form of SNAP and unemployment benefits since the onset of the COVID-19 pandemic,” the researchers wrote. “While a greater reliance on assistance undoubtedly predates the pandemic, the high rates of job and income loss experienced by households with children has clearly heightened the importance of such support.”
KEY BACKGROUND
Several key benefits of the CARES Act have expired—most notably supplemental unemployment benefits and eviction protections for certain renters—but the Trump administration and top Democratic lawmakers have been unable to come to an agreement on what the next round of federal stimulus legislation should look like. The $3 trillion Heroes Act, passed by the Democrat-led House in May, included additional support for federal unemployment and nutrition assistance, along with another round of direct stimulus payments and hazard pay for essential workers. The Republican-led Senate never took up the bill, though it did release its own plan—the Heals Act—last month. When Democratic lawmakers and White House policymakers were unable to reach a compromise last week, President Trump took executive action over the weekend with respect to enhanced unemployment benefits, student loans, eviction protections and a payroll tax deferment. Those actions alone, however, aren’t likely to be as effective in propping up the economy as would legislation from Congress.
-Sarah Hansen, Forbes Staff