The Study Panel’s assessment of economic insecurity, through examinations of poverty, income trends, and income volatility, relied on data that were available at the time of writing, most of which was for the year 2019. Poverty in the U.S. dropped, under the official poverty measure, to a historic low of 10.5 percent, but much of the population ended 2019 cash-strapped and indebted. The typical household’s income did not grow as fast as the economy nor did it keep up with the price of certain goods, like a home or a college education. For many, income itself was insecure and prone to volatility, or unpredictability. People were materially better off in many respects than any prior generation, but also in precarious economic situations.

Economic insecurity is a function of exposure to economic risk and of the level of protection available if the risk is realized. The assessment of insecurity has so far focused on the latter. A realized risk can be anything from a wrecked car to a flooded or forest fire-torched house to a high medical bill.

While these risks can be devastating, they typically hit individuals sporadically—one at a time, here and there. In contrast, recessions, in which the overall economy declines, are periods of widespread economic shock. In a recession, tens of millions across the country suffer risk through job loss, income cuts, and business closure. In some ways, the most accurate measure of economic insecurity is how well households fare during recessions.

The “pandemic recession” officially began in February 2020, the same month that the World Health Organization and the U.S. Department of Health and Human Services issued public health emergencies. In April, the unemployment rate jumped from 4.4 percent to 14.7 percent and the economy shed 22.5 million jobs.¹⁰⁴U.S. Bureau of Labor Statistics. Table A-3. Employment Status of the Civilian Noninstitutional Population by Sex and Age, Seasonally Adjusted. Labor Force Statistics from the Current Population Survey. Schools closed, businesses were forced to shut down or greatly limit operations, and food prices increased quickly.¹⁰⁵Mead, David, Karen Ransom, Stephen B. Reed, and Scott Sager. 2020. The Impact of the COVID-19 Pandemic on Food Price Indexes and Data Collection. U.S. Bureau of Labor Statistics. Table 4.

Recognizing that a historic downturn was fast approaching, in March, Congress passed the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide relief and support for households and businesses.¹⁰⁶In December 2020, Congress passed another relief bill after many of the provisions of the CARES Act were set to expire (H.R.133 – Consolidated Appropriations Act, 2021). At the time of our writing, additional relief bills are being proposed. None of the relief mentioned below was available to noncitizens. The bills included, on a temporary basis:

• Requirements for some employers to provide paid sick leave and paid family leave, reimbursed by the government¹⁰⁷Cole, Bethany. 2020. Paid Leave Provisions in Recent Federal COVID-19 Response Legislation. National Academy of Social Insurance. ¹⁰⁸Due to the exemption of private employers with over 500 employees and the limitations on “qualified reasons for leave,” the provision was not very effective in increasing paid leave in 2020.
• Borrower opt-out forbearance of student loans¹⁰⁹Federal Student Aid. Coronavirus and Forbearance Info for Students, Borrowers, and Parents. U.S. Department of Education.
• Borrower opt-in forbearance of mortgages¹¹⁰Learn about Mortgage Relief Options and Protections. Consumer Financial Protection Bureau.
• Federally funded increases to Unemployment Insurance benefit amounts and extension of benefit duration¹¹¹O’Leary, Christopher J. 2020. Food Stamps and Unemployment Compensation in the COVID-19 Crisis. Upjohn Institute for Employment Research.
• Creation of a new unemployment program for independent contractors and workers otherwise ineligible for unemployment benefits¹¹²Ibid.
• Waived eligibility restrictions for Supplemental Nutrition Assistance Program (SNAP)¹¹³Ibid.
• Recovery payments in the amount of $1,200 to most documented adults¹¹⁴Arnone, William. 2020. CARES Act Rebates: Who, How Much, When, and How? National Academy of Social Insurance.
• Supplemental $500 payment to households for each child under seventeen years old
• Ability to withdraw from 401(k) retirement accounts without penalty
• One-time emergency payments

The FFRCA, CARES Act, and extension of certain CARES Act provisions passed in December 2020 speak to a basic, if reactive, strategy for increasing economic security. Insecurity is the risk of inadequate income in the face of a shock, and Congress saw that a large shock was coming. They acted to bolster and expand access to existing programs, create new programs, ease debt payments, and send cash to 85 percent of households.¹¹⁵U.S. Census Bureau. 2020. Week 12 Household Pulse Survey: July 16–July 21. Stimulus Table, Table 1. Action to permanently address economic insecurity would do all these things but would be proactive as well, reducing the sources of insecurity and exposure to risks. The U.S. has an effective policy support system that establishes a baseline of economic security, but there are still unmet needs and unaddressed sources of risk.