During the height of the coronavirus pandemic, we quickly learned the value of timely, no-strings-attached, (relatively) low-barrier cash as a key component of crisis response. Direct cash transfers like federal stimulus payments, Advanced Child Tax Credit payments and innovative programming across the country like Thrive East of the River in Washington, D.C. and Project Community Connections here in Atlanta, proved to be key aspects of coronavirus response and relief.
A broad range of research shows that these programs were effective and families, largely, spent their money on basic needs like food, paying off debt like mortgages and emergency savings. Not only was this money a lifeline for families, it kept the economy afloat as dollars circulated.
Many of us have been eager to move on from crisis response and “return to normal.” But we are still in crisis, one of poverty and deep inequity. Economists have made various arguments in regards to our economic conditions; depending on the expert, we are either in a recession, headed towards one or will avoid one altogether.
Credit: contributed
Credit: contributed
But many of our neighbors can’t wait until economists agree on problems or solutions; they’re in crisis now.
Cost of living has risen dramatically since 2019. We feel it when we visit the grocery store, fill up our gas tank, or receive our lease renewal paperwork. Low-wage-earning families who were able to set aside some of their direct cash transfer funds during the pandemic have already seen their emergency savings dwindle, leaving them more vulnerable to the types of economic shocks we all experience: a flat tire, a sick child, a broken appliance.
The Community Foundation for Greater Atlanta is seeing this firsthand. According to Massachusetts Institute of Technology’s Living Wage Calculator, the living wage in the metro Atlanta area for a single adult, working full-time, with no children, is $18.37 per hour. If that adult has one child, their living wage goes up to $33.14 per hour, or almost $69,000 per year. For a household with two working adults and two children, both adults need to earn $23.37 per hour, for a combined annual salary of more than $97,000 to afford average basic living expenses. These living wage figures do not include payments on student loans and other debt, or families with higher than average expenses like expensive medical conditions, or caring for extended family members; they leave no room for saving or investing in wealth-building tools like postsecondary education, homeownership, or starting a business.
In contrast, the minimum wage in Georgia is $7.25 per hour (and only because the federal minimum wage is higher than Georgia’s abysmal $5.15 per hour). By my calculation, a single parent with one child earning the minimum wage would have to work more than 9,508 hours per year to earn a living wage -- more than 182 hours per week. Quite literally, there aren’t enough hours in the day.
According to the U.S. Census Bureau, in the three communities the Foundation focuses on for its place-based work, the median household income is as follows: Fair Oaks - $53,106 per year; College Park - $43,554; and Thomasville Heights (using zip code 30315) - $30,631. Further, Prosperity Now has found that 17% of metro Atlanta households have zero or negative net worth, meaning that their debt is equal to or exceeds their assets.
Assets, or wealth, are the financial cushion for difficult economic times and the lever for economic mobility -- such as savings accounts that can be used for emergencies, college tuition, or retirement. Far too many families in metro Atlanta are barely getting by, leaving community members with no means to survive future emergencies or “get ahead” by building wealth.
Meanwhile, the federal government’s direct cash transfer programs — stimulus payments and expanded Earned Income Tax Credit and Child Tax Credits — that helped many families survive the pandemic have ended. Relaxed barriers and increased benefits have mostly ended as well: expanded SNAP benefits, universal school lunches for children, Medicaid’s continuous coverage provisions and extended unemployment benefits will have all ended by April 1, 2023. Some Congress members are calling for further cuts to safety net programs like Social Security and Medicare, two programs that older and disabled community members, already hit hard by the pandemic, rely on.
Now is not the time to cut safety net benefits, or make them inaccessible to those who need them most. We know now that, with enough political will, we can respond to crises with desperately needed cash and benefits. We are in such a crisis now. Income and wealth gaps continue to increase and economic mobility is out of reach for most living in poverty.
We must respond to this economic crisis with the sense of urgency and level of care we displayed towards each other in 2020. It’s time to discuss increasing the minimum wage, implementing a guaranteed income and bringing back expanded benefits that enhance economic mobility opportunities.
Lauren Thomas Priest is a program officer for the Community Foundation for Greater Atlanta’s Community Impact Team, where she leads strategies to reduce racial income and wealth gaps in metro Atlanta through the Foundation’s income and wealth systems work.
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