What a $600 Stimulus Check Can Actually Buy You in America
Last night – after months of delay – Congress finally reached a deal to pass a $900 billion COVID-19 relief package, narrowly avoiding a government shutdown. This package follows the Coronavirus Aid, Relief and Economic Security Act (CARES Act) that was reached and passed last spring.
While the vote will come later today, key provisions of the package include: aid for struggling small businesses, including more than $284 billion for forgivable Paycheck Protection Program loans and $15 billion “in dedicated funding for live venues, independent movie theaters, and cultural institutions;” $300 per week for enhanced unemployment insurance benefits; $25 billion for rental assistance and an eviction moratorium extension.
There will also be $82 billion for education providers like schools and colleges, including aid to help reopen classrooms safely; $10 billion to help with child care assistance; $13 billion in increased Supplemental Nutrition Assistance Program and child nutrition benefits; $7 billion to bolster broadband access to help Americans connect remotely during the pandemic; funding to support coronavirus vaccine distribution, testing and contract tracing efforts and health care workers; and a tax credit “to support employers offering paid sick leave.”
This second stimulus package will also include a direct $600 payment to individuals earning up to $75,000 — half of the $1200 per person payment the first stimulus agreed upon and a far cry from what most people expected. Children will receive $600 as well, up from the $500 in the CARES Act. But how far will $600 really go on essential expenses?
I really hope everybody’s superpower is to turn $600 into $60,000 cause at this point we all we got.
These aren’t stimulus checks, they are survival checks. And $600 is malpractice.
— brittany packnett cunningham. (@MsPackyetti) December 21, 2020
Of course, it depends on where you live in the U.S., but the first $1,200 stimulus checks like those distributed in April 2020 were not able to completely cover one month of living costs, even in the most affordable cities. These monthly living costs ranged from $1,324.02 in a city such as El Paso, Texas, to $4,315.77 in San Francisco, according to U.S Census Bureau data.
Let’s break it down further:
- Healthcare: The $600 stimulus check would pay for one month of healthcare costs for one person, for example. In 2020, the average national cost for health insurance is $456 for an individual and $1,152 for a family per month, according to data from eHealth.
- Rent: Unfortunately, the check will not even cover half of it. The price of an average bedroom across the country as of the second quarter of 2020 runs from an average of just less than $1,690 for a studio apartment to upward of $2,017 for a large three-bedroom unit, according to a report from Rent.com.
- Childcare: The Center for American Progress’ “Where Does Your Child Care Dollar Go?” tool reveals that the stimulus check will only cover a small portion of your monthly childcare costs. The average cost to provide center-based childcare for an infant in the U.S. is $1,230 per month, and an average cost of $800 per month, in a family childcare home.
- Credit card debt: As for credit card debt, the stimulus check would pay for about a tenth of it – the average credit card debt for Americans reached $6,194 in 2019, according to data from Experian.
- Groceries: Value Penguin estimated in June 2020 that the average American household of 2.5 individuals spends about $550 on food each month, so at least this crucial expense should be covered.
It’s not the CARES Act and it’s very late, but it’s much better than nothing.
It will help buffer the economic slowdown we’re experiencing & provide the economy more dynamism during early vaccine rollout phase. https://t.co/zXXUljEoge
— Gregory Daco (@GregDaco) December 21, 2020
“It’s not the CARES Act and it’s very late, but it’s much better than nothing,” tweeted Gregory Daco, the chief U.S. economist for Oxford Economics. “It will help buffer the economic slowdown we’re experiencing & provide the economy more dynamism during early vaccine rollout phase.”
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