Survey: How long do Americans expect the latest stimulus payments to support them?

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For most Americans the stimulus payments received during the pandemic have been a complicated topic. People seemed to support the stimulus check funding and complain about it at the same time.

However, one thing is clear: while people may not have agreed on the check amounts, the majority approved of the concept of stimulus checks. In February 2021, when President Biden proposed the third stimulus check, there was support from all sides.

By the end of 2020, an estimated 22 million American workers had lost their jobs due to COVID-19. As a result, people have come to rely on stimulus checks and other forms of federal financial assistance during the pandemic. 

The stimulus payments provided a large amount of money upfront. However, the question remains: how helpful have people found them? Lexington Law conducted a survey to uncover how Americans truly felt about the stimulus payments—and the results were fascinating.

Key takeaways

• Two out of five people said they don’t know how long the latest round of stimulus payments will support them.
• One out of five people said they can support their household without a stimulus payment.
• 24.4 percent of men compared to 19.8 percent of women said they don’t need a stimulus payment to support their household.
• 18.8 percent of millennials ages 25 – 34 said they expect the latest round of stimulus payments to support them less than a month.

Two out of five people said they don’t know how long the latest round of stimulus payments will support them

In our survey, most respondents (40.4 percent) don’t know how long the latest round of stimulus payments will support their household. In part, the stimulus payments were intended to support the overall economy by allowing people to continue spending. The hope was that this would continue to stimulate the economy and reduce the impact of the pandemic on businesses and jobs, even if only by a little. 

In reality, even though the most recent stimulus check is the highest (at $1,400), it’s still not enough for the average American. The average monthly cost of living in the United States is $2,592. This means that the stimulus check can cover roughly half a month’s worth of expenses for the average person. 

There has been a wealth inequality exacerbated by the pandemic in which households that were struggling before the pandemic are worse off, while others report little change to their income. According to Opportunity Insights, the lowest earners (people making less than $27,000 annually) saw job levels down almost 20 percent from pre-pandemic levels by November 2020.

These numbers continued to plummet, and by February 2021, low-income workers saw a 29 percent decrease in job opportunities compared to pre-pandemic levels. 

In comparison, the highest earners (individuals making $60,000 or more annually) had fully recovered, and job levels were 1 percent higher than pre-pandemic levels by November 2020. 

How people spent their stimulus checks was greatly influenced by where they were before the pandemic. It’s been observed that while the first stimulus led to a rise in household spending, households with larger savings saved more of their stimulus, while those without spent much of their stimulus payment in just a matter of days.  During those first 10 days, those households spent most of their stimulus money on utilities, rent and food.

This is understandable, as those struggling would have had to put their stimulus check toward outstanding debts or their living costs, while those without major financial hardship could use the stimulus as savings. 

Now, as the third stimulus check arrives, it’s expected that the wealth gap may continue to grow. Though they are decreasing, unemployment levels remain high, making more Americans reliant on this stimulus check for their living costs. 

One out of five people said they can support their household without a stimulus payment

Our survey showed that 22 percent of respondents said that they didn’t need a stimulus payment to support their household. Stimulus checks went to single individuals with incomes up to $75,000, and partial checks went to individuals with incomes between $75,000 and $80,000.

However, the data has shown that low-income earners have been the most impacted by job loss during the pandemic. There was a proposed $40,000 income level cutoff for the stimulus check, but that cutoff wasn’t approved. 

This data suggests that many people who made between $40,000 and $80,000 didn’t need the stimulus check to survive. If these households did not need the stimulus payment to support their home, did they use it to support flagging industries, such as hospitality, instead? 

It appears the answer, for the most part, is no. According to a survey conducted by the U.S. Census Bureau, most of those with incomes between $75,000 and $99,999 used their stimulus payments to pay down debt or added the funds directly to their savings. Comparatively, 87.6 percent of those with an income of $25,000 or less reported planning to spend their stimulus payments on household expenses.

This isn’t exactly the response the government was hoping for. The stimulus check was meant to be a support crutch for those struggling to meet living costs. But for households that are managing well throughout the pandemic, the stimulus money was meant to (as the name implies) stimulate the economy. 

Instead, the wealthy population is actually spending approximately 5 percent less than before the pandemic. Still, while they may be saving their stimulus checks right now, some experts predict spending levels will rise when the pandemic is over. 

24.4 percent of men compared to 19.8 percent of women said they don’t need a stimulus payment to support their household

The pandemic has unequally affected men and women. Both men and women lost their jobs in the pandemic. However, for many households that could no longer afford childcare, it was the woman who chose to stay home. In September 2020, “four times as many women as men dropped out of the labor force.” For this reason, it’s no surprise that more men (24.4 percent) than women (19.8 percent) said their household didn’t need a stimulus payment.

Even the women that stayed in the workforce saw imbalanced consequences. “While men and women experienced pandemic pay cuts at nearly equal rates, men (52 percent) were more likely than women (44 percent) to say their pay has been restored”—further proving that whatever wealth and gender gap existed before the pandemic has been made worse.

The World Trade Organization announced that COVID-19 has impacted women more significantly, primarily because women tend to work in the sectors that have been hit the hardest by the pandemic (travel, hospitality, etc.) at higher rates than men. 

Millennials ages 25 – 34 were more likely to expect the stimulus payments would support them for less than a month

Millennials seem to have been hit the hardest by pay cuts during the pandemic, and the results of our study align with that: 18.8 percent of millennials ages 25 – 34 said that they expect the latest round of stimulus payments to support them for less than a month, a higher percentage than in any other age group.

While every age group has financial responsibilities, millennials are also in a point in their lives when they’re incurring high expenses. It’s quite common for people to pay for a wedding, buy property and have children from 25 to 34. The pandemic’s financial outcomes could either have changed or delayed these plans or made keeping up with all expenses nearly impossible. 

In addition, many millennials are still paying off student loan debt. On average, the graduating class of 2018 had almost $30,000 in student loan debt. These expenses, combined with a pandemic pay cut, leave millennials in a difficult situation and also leave them more reliant on the stimulus check than the other age groups. 

The end of the pandemic and pandemic assistance

It’s uncertain what the economy will look like at the end of the pandemic and what kind of recovery is in store. The pandemic was predicted to bring on a recession that would include a severe stock market crash, a housing market crash and more. Instead, almost everyone has been surprised by how the pandemic has panned out. 

During the pandemic, the stock market experienced a crash and recovered within five months. The housing market in many cities has exploded to unaffordable levels, and Americans are sitting on accumulated vacation days waiting to be able to travel again. The wealth gap became more prominent, and the female workforce took one of the biggest hits since women entered the workforce. 

If things continue going the way they’ve been going, more surprises might be in store when it comes to the post-pandemic economy, future financial assistance and other aspects of our country’s recovery. 

Methodology

This study was conducted using Google Surveys. The sample consists of no less than 1,000 completed responses from adults in the U.S. population, ages 18 and older. The survey ran online in March 2021.

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