Stimulus checks might not reach those who need them most, U-M study says

White House commits to sending stimulus checks within 2 weeks
Posted at 11:40 AM, Apr 09, 2020
and last updated 2020-04-09 11:40:03-04

(WXYZ) — The U.S. government will send up to $1,200 in economic relief funds to help Americans dealing with financial strain amid the COVID-19 crisis.

But according to a study by the University of Michigan, many people such as minorities and those in lower-income households, may not be able to access the financial services they need.

U-M Associate Professor of Social Work Terry Friedline says many families in the U.S. were already experiencing financial uncertainty before the pandemic.

"Nearly 50 percent of households regularly]struggle to make ends meet, 40 percent are unable to cover an unexpected $400 expense, and most do not have enough savings to replace one month of income," according to Friedline.

In fact, when Americans should expect the stimulus money has been a concern. The time frame varies significantly. For people who have filed their taxes and have direct deposit, the check could arrive in two to three weeks. For those who do not, a paper check could take several months.

"People can't wait four months for relief, which is how long it will take to receive their money for millions of households who don't have bank accounts. This delay will disproportionately affect the people who were marginalized or already burdened to begin with, and who especially need relief now: black and brown, lower-income white and female-headed households," Friedline said.

"Given racism, classism and sexism, these financial uncertainties are experienced more deeply by black, brown, lower-income white and female-headed households. A swift and aggressive economic response is needed so that families are not financially devastated by the COVID-19 pandemic, especially for those already disadvantaged by our existing financial and economic systems."

Friedline also argues that Americans could have check delivery equity if the U.S. had a universal bank accounting system – that way the government could easily distribute stimulus money if everyone had a bank account.

"One reason is because banks are standing in the way of universal bank account proposals. Despite providing a necessary public service, our banks and financial institutions are private, for-profit businesses. Banks have consistently argued that there is no business case for opening and maintaining accounts that aren't profitable. Federal regulators encourage banks to serve all customers, but banks are designed to make money and to target customers in ways that benefit shareholders and help their bottom line."

"It is part of banks' DNA to serve wealthier and whiter customers. The first banks were established during slavery for wealthy whites to capitalize on the forced labor of black and brown peoples. Well-known banks can trace their roots to slavery, and news reports regularly describe banks' discrimination against their customers."

Friedline continues her discussion into issues of having proper identification – which can be a challenge for immigrants, older adults, the homeless and youth in state systems like foster care – the role of technology all affecting if, how and when Americans receive their stimulus checks.

Read the full study here.

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