“It’s a terrifying, terrifying situation,” said Lara, who tried to get a grocery store job but was told there’s a hiring freeze. “I am at the end of my finances.”
Lara’s situation is not unique. For years, many economists and advocates have warned that a large share of Americans are living paycheck to paycheck and that it would take only a slight downturn to devastate their lives. Many of the fastest-growing jobs pay less than $30,000 a year, making it hard to save. Meanwhile, the U.S. safety net developed giant holes. Gig and self-employed workers rarely qualified for aid, and many states, often at the urging of GOP leaders, had made it harder to get unemployment or other benefits.
Jobless rate soared to 14.7% in April as U.S. shed 20.5 million jobs amid coronavirus pandemic
“The U.S. was so fundamentally unprepared for a recession,” said Claudia Sahm, an economist and an expert on the causes and cures of downturns.
Perhaps the biggest red flag was a Federal Reserve report last year that warned that nearly 40 percent of Americans couldn’t come up with $400 for an emergency. Some analysts found it hard to believe that this was the case at a time when the nation’s unemployment rate was under 4 percent. But the emergency has now hit, and millions of people are lining up at food banks, pleading for help on social media and going to work in the midst of a pandemic because they need the money.