Stimulus checks helped reduce food insufficiency and financial insecurity, study finds

Posted at 5:30 AM, Jun 10, 2021
and last updated 2021-06-10 07:27:02-04

(WXYZ) — There have been three major rounds of federal stimulus aid since the start of the COVID-19 pandemic.

The largest came earlier this year under President Joe Biden's American Rescue Plan with checks of up to $1,400 per person, plus an additional $1,400 per eligible child. It was larger than the first round, which was $1,200, and the second round, which was $600.

That massive amount of money helped America rebound, and a new study found that the money helped many Americans pay for necessities like food and bills.

Brittany Zielinski remembers the anxiety and uncertainty of the start of the pandemic. The stay-at-home mom says when she and her husband first got stimulus checks, his suggestion was to get ahead on bills.

"He was like, OK, now we're going to do this a month ahead, or pay the mortgage a month ahead, and I was cool with that," she said.

University of Michigan Researcher Patrick Cooney says that was the purpose of the relief was to sure up families in a time of dramatic uncertainty and material hardship.

"The ability to pay for food, housing, their experience with adverse mental health conditions, the extent to which they are experiencing hardship, is directly related to government relief," Cooney said.

Using U.S. Census data, Cooney and fellow researcher Luke Shaefer found food, housing and financial insecurity dropped in line with the stimulus payments.

"It's pretty compelling evidence that, yes, the government relief efforts have worked," he said.

While the poorest Americans saw the largest benefits, even families making upwards of $100,000 saw real gains. If you didn't get a stimulus check, Cooney says you still benefited since that money helped boost weak consumer spending, propping up the economy.

According to the study, from December 2020 to April 2021, food insufficiency fell by more than 40%, financial instability fell by 45% and adverse mental health symptoms fell by 20%.

Courtesy of Poverty Solutions at the University of Michigan

"The economy has shown, I would say, given the extremely large shock has shown remarkable resilience," Nivedita Mukherji, an associate dean at the Oakland University School of Business, said.

She said the economy is also on pace to wipe out losses from the pandemic if the rebound stays on Track. According to Mukherji, it takes time to get $1.9 trillion into the economy, and she doesn't see the need for another round of stimulus that some people are pushing for.

Prices for consumer goods were up 4.2% in April, the fastest 12-month gain since 2008.

Mukherji says inflation is worth watching, but adds we're comparing prices today against prices that were falling in March and April of last year because of the pandemic and the uncertainty.

"We are calculating this percentage growth from a much lower value. So the percentage increase looks high," she said.

Courtesy of Poverty Solutions at the University of Michigan

Mukherji expects prices to moderate later this year and says the federal reserve will step in if they don't.

Brittany understands the concern about the economy long-term but says given the crisis America and the world were facing, the multiple rounds of stimulus was the right thing to do.

"A roof over your head and food in your belly for your kids, and then after that, we can worry about the big stuff," she said.

So what about the idea that the expanded unemployment benefits as part of the stimulus bills are keeping workers from getting new jobs?

Cooney says there is not much data showing people jumping back into the workforce when states drop the expanded federal benefits.

Additional Coronavirus information and resources:

View a global coronavirus tracker with data from Johns Hopkins University.

See complete coverage on our Coronavirus Continuing Coverage page.

Visit our The Rebound Detroit, a place where we are working to help people impacted financially from the coronavirus. We have all the information on everything available to help you through this crisis and how to access it.