It’s a riddle that economists have struggled to decipher. The U.S. economy seems robust on paper, yet Americans are dissatisfied with it. But hardly anyone seems to have paid much attention to the whirlwind experience we just lived through: We built a real social safety net in the United States and then abruptly ripped it apart.
Take unemployment insurance. The CARES Act, passed in March 2020, included the largest increase in benefits and eligibility in American history. It offered people “a sense of relief,” said Francisco Díez, senior policy strategist for economic justice with the Center for Popular Democracy, which organized unemployed people in the pandemic. “A feeling like they could breathe and figure out what they could do.”
LaShondra White was one of them. When she was furloughed from her job at a Kohl’s department store in Detroit in March 2020, she started receiving more than $600 a week. It was “my chance to get out of this situation,” she told me last year, a situation in which her pay was “horrible.” She had always wanted to own her own business, so with the extra money she fixed her credit score, rented out a commercial space and opened an eyelash studio. Her studio is still open and largely booked.
In 2019, unemployment insurance kept 500,000 people out of poverty; in 2020, that figure was 5.5 million. Yes, the program was riddled with problems, particularly technological ones, that made it difficult for many people to get enrolled quickly. But once they were covered, “They saw something close to the actual level of benefits that they deserve,” Mr. Díez said.
It was short-lived. By July 2020, the extra $600 in benefits had lapsed, and it wasn’t until December 2020 that Congress approved $300 payments with new restrictions. By May, some states started opting out, leaving their residents with the paltry benefits they would have gotten prepandemic.
In those states, “There was a real sense of terror and concern and fear and abandonment from the politicians who chose to cut the benefits off early,” Mr. Díez said. “It really harms whatever faith they had in the nature of government as an institution that can actually see their struggle.”
Unemployment has been below 4 percent for more than two years, wage growth is outpacing inflation (which has fallen considerably), and economic output is booming. And yet consumer sentiment has been depressed, and even though it rose recently, it’s still about 20 percent lower than before the pandemic began. It’s at levels typically seen at the end of a recession.
Why are the economic vibes off? There are most likely many answers. Obtaining the basics, like housing or child care, has become more difficult. Falling inflation is great, but prices have remained uncomfortably high. Republican voters may just not like an economy run by a Democratic president. Americans may feel OK about today’s economy but wary of the future.
All of this can be true simultaneously, but let me add another reason Americans may be doing well but feeling financially insecure: In the pandemic, the country created the most robust safety net we had seen in decades, buffering people against eviction, poverty, hunger and other suffering. Americans’ lives were materially and appreciably improved. Then we took it all away.
The message received is that the government could have done these things all along but had chosen not to — and has chosen once again to withdraw that kind of security. Before March 2020, Americans were used to piecing a living together without much government help, but now they’ve seen that it doesn’t have to be that way. They’ve tried to create their own individual safety nets, but they’ve spent down the savings they were able to squirrel away when pandemic-era public programs were in place.
So even if people are more likely to have a job and even have gotten a raise that outpaces increased costs, they can still look down and see that there’s nothing to catch them if they fall. That puts us in a perpetual state of exhausting hustle. One wrong step, one misfortune, one layoff can mean catastrophe without supports to get you back on your feet. No wonder so many Americans don’t feel very confident.
Here’s an incomplete accounting of the safety net that was built nearly overnight to combat the aftershocks the pandemic sent through the economy. During the public health emergency, the federal government required states to keep anyone already on Medicaid or who signed up for it enrolled. That meant people were spared the difficulty of regularly recertifying that they were eligible, and it also meant their life circumstances could shift — they could earn slightly more or marry, for example — and they wouldn’t lose health insurance. More than 21 million people were added to Medicaid and the Children’s Health Insurance Program between February 2020 and December 2022.
Congress increased food stamps by raising benefits by 15 percent and bringing every household up to the maximum benefit for its size. It also allowed all students to get free school meals. Despite millions of people losing their jobs, hunger actually held steady in 2020 and 2021.
Congress approved $46.5 billion in rental assistance to prevent people from being evicted. For the first time in history, the federal government offered people who fell behind on rent help to get caught up. The money not only kept people more current on their rent but it also made it less likely they would experience “frequent debilitating anxiety,” according to a 2023 study of renters in Philadelphia.
In 2021 Congress expanded child tax credit payments, which were in place from July 2021 through the end of that year, by increasing the benefit to up to $300 a month for children under age 6 and $250 for older ones and expanding eligibility. These payments became an important part of households’ income and reduced hardships and hunger. They were responsible for nearly the entire halving of the child poverty rate in 2021.
Last year, Jamila Michener, a political scientist at Cornell, and Margaret Brower, a political scientist at the University of Washington, began a study asking people about the benefits they received during the pandemic.
“People can talk us through every benefit they got, what it meant to them, what they did with it,” Dr. Michener told me about the unpublished research. People became emotional as they described being able to feed their families. One woman told Dr. Michener how hard it was to have to constantly tell her children no, even to small snacks or healthy foods like fruit. But in the early part of the pandemic, she could buy them what they needed.
Crucially, Americans received multiple benefits at once — they were able to stay on Medicaid while also getting monthly child tax credit payments and making use of rental assistance. Most Americans aren’t usually tuned into various policy changes, but the magnitude and scope was different this time. They noticed and they were deeply grateful.
“People are able to breathe without as much pressure or stress,” Dr. Michener said.
After these overlapping supports were taken away, child poverty more than doubled, and family hunger spiked. So did evictions. Now that states are allowed to force people to complete paperwork to stay on Medicaid and kick them off if they fail, 17.8 million people have lost coverage.
It’s hit individuals and families hard. In Kentucky, a state that opted out of extra food stamp benefits in 2021, the damage started early. Residents told Dr. Michener they had to frequent food pantries to eat. One woman told her that when she wasn’t able to make it to pantries — because of a broken-down car, for instance — she would eat noodles even though she can’t eat gluten.
Many told Dr. Michener about having to hustle harder for work, and she told me that the word “struggle” comes up over and over again in the researchers’ interviews. Americans have less sense of security, she said, “that you’re going to be OK and you’re going to be taken care of should the worst-case scenario befall you.”
The disillusionment this creates is incredibly harmful. Yes, if people feel pessimistic about the economy, it may very well swing the election away from President Biden. But it’s bigger than just this election. Even if somehow the experience of losing benefits doesn’t diminish political participation, it’s a lost opportunity for the government to continue demonstrating to Americans that it can make their lives better. That draws people into democracy and strengthens it. The worst — and more likely — case is that it turns them off.
“There were a lot of things across many programs that changed and made people’s lives better, and so many of those things have been pulled back,” Dr. Michener said. “We’d have to think people are idiots not to notice that.”
