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Why a Single $1,200 Stimulus Payment Really Falls Short for the Average American

By Maurie Backman - May 9, 2020 at 6:18AM

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Millions of Americans have already received stimulus cash -- but they're still struggling.

COVID-19 has been wreaking havoc on the U.S. economy for close to two months now. Thankfully, there's been relief for struggling Americans, specifically in the form of a $1,200 stimulus payment that millions of people have already received in their bank accounts. But when we dig deeper into that number, it's clear that while a $1,200 check may be useful, it doesn't come close to helping the typical out-of-work American cover even a month's worth of bills.

Why a single $1,200 payment won't cut it

The average American household spends $5,102 a month, according to data from the U.S. Bureau of Labor Statistics (BLS) -- and that's a far cry from $1,200. To be fair, the word "household" in this context can mean a few different things. It can mean a single person living alone, a married couple that splits bills down the middle, or a family consisting of two parents and two children. When we think about it that way, it's conceivable that a single household will receive well more than $1,200 in stimulus cash.

Banded stacks of bills


In fact, a family with two adults and two children under the age of 17 whose income falls below the threshold where stimulus money starts to phase out will receive $3,400 in stimulus cash (families with children under 17 get $500 per child), and that's a lot closer to $5,102. But even then, it still falls short.

Stimulus checks may not even cover housing

The BLS reports that the average American household spends $1,674 on housing, which includes utilities and supplies like toilet paper -- all of which are absolute necessities. As such, for someone who lives alone, that $1,200 may not even suffice in covering rent, electricity, heat, water, and internet service for a month.

Will a second stimulus payment follow?

Americans who are out of work due to COVID-19 may have access to more money than just a one-time stimulus check; they can also file for unemployment benefits, provided they've lost their jobs through no fault of their own and meet their states' minimum earnings requirements. And these days, those benefits are more robust than ever, since everyone on unemployment now gets a $600 weekly raise as part of the COVID-19 relief packages that's also providing those stimulus payments.

Still, many Americans are struggling in spite of their increased benefits and stimulus cash, so lawmakers are fighting for a second wave of stimulus payments. Specifically, Democratic lawmakers are fighting to pass the Emergency Money for the People Act, which would pay single Americans aged 16 and over $2,000 a month and married couples $4,000 a month for at least six months and possibly up to one year. Anyone earning less than $130,000 a year ($260,000 for married couples filing jointly) would be eligible or this relief. Qualifying families would also be entitled to an extra $500 per child for up to three children in a single household.

In addition, the Rent and Mortgage Cancellation Act seeks to eliminate rent or mortgage payments for an entire year. Seeing as how housing is the typical household's largest monthly expense, that measure alone would surely spell relief and let those collecting unemployment use their weekly benefits for other purposes, like food and supplies.

Right now, it's too soon to tell whether a second stimulus payment will come through or whether the above proposals will pass. But one thing is clear: For the typical American who's out of work, a single $1,200 check isn't going to cut it.

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