DAt the start of 2020, when it became clear that the Covid-19 pandemic could not be contained, life in the United States and many other countries came to a virtual standstill: schools and businesses closed; about a third of workers continued to work from home, doing their best; others were made redundant or put on short-time working. From mid-March to mid-April, 22 million Americans lost their jobs.
“Essential” workers (doctors, nurses, supermarket and food factory workers) continued to go to work, but faced terrifying new risks. In May 2020, an imminent generalization of financial difficulties was expected. Yet in June, most Americans were paradoxically in better financial shape than a year earlier. What happened ?
Three massive stimulus programs, starting with the Cares Act (Coronavirus, Aid, Relief and Economic Security Act) of March 27, 2020, injected more than 5,000 billion dollars (more than 4,500 billion euros), although not everything was spent immediately, five times more than the stimulus package adopted in response to the 2008 financial crisis. The federal government increased unemployment insurance benefits, extended the duration of their payment, and expanded eligibility criteria. He also sent several thousand dollars to most Americans, saving struggling families from sinking. Eight hundred billion dollars went to almost every small business. Other programs have helped homeowners in difficulty, preventing many evictions.
Savings on the rise
At the same time, consumer spending fell sharply. Many people stopped going to restaurants and bars and canceled their vacations. With falling expenses and income stabilized, or even increased, by government aid, average savings has grown significantly. Outstanding credit card debt has fallen by nearly $1,000 per cardholder, and people have been paying off long-term debt in droves.
With this new found financial freedom, many Americans have started businesses. As the economy recovered, workers sought new jobs and obtained better conditions. The dynamism of the labor market has brought people back to work who had been away from it.
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