Did the 2020 economy end up being K-shaped?

Confronted with an economic collapse induced by the coronavirus pandemic, the U.S. government took several measures—including direct stimulus checks, boosting the amount of unemployment insurance, and giving funds to businesses to keep people on payroll—to alleviate the challenges caused by business shutterings and job losses. Fast Company talked to Josh Bivens, director of research at the Economic Policy Institute, a nonpartisan think tank, about the government’s overall response: how it got off to a decent start before petering off into inaction— and leaving gaping inequities that need to be fixed in 2021.

Fast Company: What did the federal government do right?
Josh Bivens: It did a couple of things right. One, I think the Federal Reserve saw the economic shock coming and started to do lots of things to make sure the financial markets didn’t freeze up. [Those things were] not super-effective for helping typical families, but they signal to other policymakers: this is serious, you should start getting in gear as well. They did a good job in their role as “economic crisis watchdog,” and started barking early on.

The CARES Act had a lot of good in it. The really good, transformational part of it were the unemployment insurance (UI) changes, the $600 checks [the amount of federal assistance issued per week until July 31 for people already receiving unemployment benefits, in addition to any state benefits]. Basically, an attempt to make sure that no one who’d lost their job due to the pandemic saw an income cut at all. I think that was exactly the right thing to do.


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