As the US government scales up the fight against Covid-19, its economy continues to suffer severely and the current crisis has been termed as the worst since the Great Depression, more than a decade ago. The government continues to tighten up public health measures through social distancing and temporary lockdowns across major cities. The lockdowns have led to a recession like situation that we are not sure will go on for how long.
The poor state of the economy in the US has left many Americans jobless and with no sources of income. Research has shown that there were more than 26 million unemployment insurance claims reported across the country between March 15 and April 18. The massive loss of jobs is causing a lot of straining in many households with many struggling to acquire basic needs such as food, medical care and other supplies. Most American households are in dire need of immediate help which the government should intervene before it develops into another crisis.
However, the US government is trying hard to contain the situation. Recently, the federal policymakers passed four relief bills to help combat the crisis. The main relief bill was the $2 trillion CARES Act which targets to enhance benefits and expand eligibility for unemployment insurance. CARES Act also features issuing of forgivable loans to small businesses, together with economic relief payments which should be sent directly to the needy households. The act also includes giving aid to the state and local governments and increase funding for housing assistance and other necessary programs.
During these harsh times, it is very critical for the governments to provide an effective response that will try to reduce the fallout of economic activities. The government needs to give a response that will ensure that people will remain quarantined in their houses to observe the social distancing policy and be well fed. An effective response to this situation should be aimed at not only to feed the needy families but also to ensure the maintenance of public support as they adhere to the social distancing policies in order to lay a perfect foundation for a strong recovery.
For the government response towards this situation to be successful, it has to effectively reach the households that need help the most. This includes adults who lost their sources of income as a result of Covid-19. To effectively distribute relief to the most affected households, the government will need to have timely data on the households’ financial and material capability to know who and where they need help.
A Health Reform Monitoring Survey was recently carried out by the Urban Institute to examine the effects of Covid-19 outbreak on households’ employment and abilities to meet basic needs. The survey also examined the racial/ethnic and family income-related variances due to the Covid-19 impact on the economy. The survey was carried out on nonelderly adults between March 25 and April 10 this year.
The survey found out the following;
- Just over 4 in every 10 of the respondents, that is about 41%, reported their households having lost jobs, working hours, or any income related to work due to the Covid-19 pandemic.
- There was a widespread loss of jobs but low-income households and Hispanic adults dominated the most.
- In the efforts to contain the situation, 30.6% of the adult respondents reported that their households reduced spending on food, while 43.1% stopped making major purchases, and 27.9% withdrew their savings or increased borrowing on their credit cards.
- Many families have experienced severe material hardships due to Covid-19 impacts. 31% of the adult respondents reported that their households could not afford to pay rent, mortgage or even utility bills. The same portion of respondents also reported to have food insecurities and also went couldn’t afford medical care for the last 30 days.
The survey established that the outbreak of Covid-19 has already implanted a deep economic impact on non-elderly adults and their households. As of early April, many households were struggling to afford essential necessities such as food and housing. Most of the respondents were very worried about how they were going to survive for the next month. If the many households cannot pay for housing, ensure enough food, or afford medical care during these harsh times, they are most likely to face severe health consequences and this is further increases risks to public health.
It is crystal clear that the situation is slowly getting out of hand. This is the best time that we should stick together as one and help each other in every way possible. Your neighbour could be starving without your knowledge. To observe the social distancing policies, ensure you call on them to check that they are doing well. If there seems to be a problem, you can help them where you can and where not possible you should inform the authorities. Let’s hold hands and stay strong until this is over.
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Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent views of First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier MBA is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.email@example.com. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media Inc.