March 19, 2021
According to advocates and researchers in work-family justice and gender equity spaces, the American Rescue Plan (ARP) is a BFD — a big freaking deal.
Passed by Congress on March 10, 2021 and signed by President Biden on March 11, 2021, the ARP prioritizes immediate relief for millions of families and workers struggling to afford food, housing, and basic necessities in the midst of an economic and caregiving crisis. In addition to extending $1400 stimulus payments to qualifying households (see footnote), the new package includes key provisions that provide financial support to families with children, bolster unemployment benefits, and allocate funding to the child care sector. It responds in an historic fashion to the unprecedented urgency of the economic and health crises of the past year and has the potential to lift millions of children above the poverty line. Most importantly, it provides a lifeline to families and workers, especially the Black, Latinx, and immigrant women overrepresented in industries hardest hit by the pandemic-induced recession, disproportionately working on the frontlines, and often segregated into low-paying jobs.
The American Rescue Plan Provides Financial Support to Families with Children through the Expansion of the Child Tax Credit
Through a temporary expansion of the Child Tax Credit (CTC), which advocates and some lawmakers hope to make permanent, the American Rescue Plan enables households with low-incomes or no earnings to access the benefit by both increasing the amount of the credit and making it “refundable” for families who do not owe federal taxes.
As explained by the Tax Policy Center, under the law that preceded the ARP, taxpayers could claim a Child Tax Credit (CTC) of up to $2,000 per child under the age 17 every year. The credit benefitted families in most income brackets with tax liability. However, according to the Center for Budget and Policy Priorities, prior to the enactment of the ARP, families with low household incomes below a certain threshold could not qualify for the full CTC benefit.
Now, for 2021, families can receive a full refund of $3000 per child (aged 17 or younger) and $3600 for a child under the age of six years old. The CBPP explains that this provision “will help push against racial disparities” because it extends the full refund to the 50% of Black and Latino families who had been ineligible because they earned too little money. The refund will serve as a consistent form of support because it will be provided in periodic payments throughout the year.
How This May Impact Women of Color
This provision could especially benefit women working low-paying jobs while simultaneously caring for their children. Prior to the passage of ARP, these working caregivers might have been excluded from receiving the full CTC because of their low earnings. According to the National Women’s Law Center, women occupy a whopping 64 percent of all low-wage jobs. More than 66% of all women working in the 40 lowest paying jobs are primary breadwinners for their families, and women of color are overrepresented in these occupations. In 2018, Latinas made up 7.7% of the overall workforce, yet 16% of the low-paying workforce. Women born outside the United States made up 7.6% of the overall workforce, yet 15% of low-wage workers. NWLC also finds that the risk of falling into poverty is especially high among women in these occupations, even if they are working full time. In addition to the $1400 stimulus payments included in the ARP, the expanded CTC would provide much relief to the women with children who need it most.
The American Rescue Plan Invests in the Child Care Sector
When the pandemic began, advocates called for $50 billion in funds to ensure the child care sector survived. By December 2020, the child care sector had lost 171,000 jobs since the beginning of the pandemic began, and by February 2021, one-sixth of child care workers had lost their jobs. Already, findings from a survey conducted by the National Association for the Education of Young Children estimates that 20,000 child care centers have closed their doors.
Although Congress passed legislation in 2020 that allocated funds for child care, the enactment of the ARP finally brought the total amount of investment to $50 billion. In March, the CARES Act provided $3.5 billion in funds and the December stimulus bill extended another $10 billion. The ARP adds $39 billion to these investments, setting aside more than $14 billion for emergency relief to states through the Child Care and Development Block Grant (CCDBG) program and more than $23 billion in emergency funds for states’ child care stabilization efforts.
Reporting by the First Five Years Fund provides detailed information about how COVID-19 relief has been used thus far. Previously, funds channelled through CCDBG helped child care providers cover operating costs, remain open to care for the children of essential workers, and pay workers. It also helped offset the costs of purchasing sanitation supplies and personal protective equipment. Experts from The Century Foundation note that the ARP will support more than 60 percent of child care programs in the United States.
The ARP funds are meant to stabilize the child care sector during an unprecedented moment of crisis, which only exacerbated the challenges the sector faced before. Advocates hope these funds will be a down-payment on permanent investments needed to transform child care for parents, children and providers.
How This May Impact Women of Color
Women of color are feeling the brunt of the job losses and closures in the child care sector. According to the U.S. Bureau of Labor Statistics, as of 2020, Black, Asian, and Latinx women constituted 45% of child care workers. Prior to the pandemic, many child care providers operated on razor-thin margins and, as of 2016, 50% of the child care workforce was forced to rely on some form of public assistance to supplement their low wages. Funding from the ARP could help ensure that a sector heavily staffed by women of color and dependent upon women their labor survives both the public health and economic crisis.
Moreover, stabilizing the sector ensures that women will be able to return to work as the job market improves. A survey from the Institute for Women’s Policy Research finds that half of all women respondents with children (50%) have had to stop working, reduce their hours, or do both to provide child care — 64.6% of Latinas reported doing so. Continued investment in the sector would support the care infrastructure that enables caregivers, and especially women, to access the child care services they need in order to provide for themselves and their families.
The American Rescue Plan Extends Unemployment Benefits
At the beginning of the pandemic, Congress recognized the need for expanded unemployment benefits and has now extended emergency programs twice. Under the ARP, the window for receiving Pandemic Emergency Unemployment Compensation (PEUC) has been extended from 24 weeks to 53 weeks. The PEUC extends benefits to people who are not eligible for their state unemployment program. Additionally, the ARP continues the Pandemic Unemployment Assistance program, which renders gig workers and other workers eligible for a total of 75 weeks of unemployment benefits, through September 6.
Finally, the Federal Pandemic Unemployment Compensation extends an additional $300 per week (rather than the Biden Administration’s proposed $400 per week) to supplement state unemployment benefits. (Research shows benefits are far too low to help workers survive and rebound a bout of unemployment.)
While these provisions will help so many with much needed aid, experts urge Congress to extend the unemployment assistance past September 6. Not doing so, they explained, could lead to a benefit lapse since Congress will not be in session during the month of August. The CARES Act included a $600 weekly supplemental unemployment payment which expired on July 31, 2020, and the December 2020 extension expired on March 14, 2021.
How This May Impact Women of Color
The recession has taken a sledgehammer to the United States’ labor market; the latest numbers report an unemployment rate of 6.2 percent and 10 million workers out of a job. A closer look shows that the burden has fallen heaviest on women of color who are disproportionately overrepresented in the industries (retail, hospitality, child care, healthcare, food services) that were hardest hit by initial pandemic-related business closures in March 2020. The Center for American Progress finds that over the course of the pandemic, Black, Latinx, and Asian women experienced higher rates of unemployment. Although women are regaining jobs (very slowly), Black women are experiencing a slower improvement in employment outlooks. In light of the racial disparities in job gans, the extension and continuation of supplemental benefits would ensure that women of color experiencing unemployment are not left without a stabilizing source of financial support.
What is needed next? Paid family leave and paid sick leave.
At the beginning of the COVID-19 pandemic, Congress passed emergency paid sick and family leave provisions as part of the Families First Coronavirus Response Act (FFCRA) to address the growing, unprecedented public health and family care crisis. These provisions provided workers up to 10 paid sick days for quarantine, isolation and diagnosis, and gave parents 12 weeks to care for children whose in-person school or child care was unavailable.
However, these provisions only covered about half the workforce and included exclusions that affected many more workers. Short-lived, the requirement that some employers provide paid leave to their workers expired at the end of December, leaving in place tax credits, designed to incentivize - but not require - small and mid-size employers to provide paid leave.
The ARP provides a bit more support. For example, it extends 600 hours of emergency paid sick leave and family leave to federal government employees. As a means of encouraging mid-size and small businesses to provide more comprehensive, emergency paid sick leave, the package also expands access to tax credits for employers that choose to provide emergency paid sick and family leave for cases related to COVID-19 and its effects. The same applies to state and local governments that permit public employees to take emergency paid leave.
Still, the ARP does not reinstate the emergency paid family and medical leave requirements that were in place last year. Additionally, nothing in the federal law mandates that workers have the right to access paid sick time or paid family and medical leave for COVID-related reasons or for any other purpose.
Future legislation aimed at rebuilding the economy and providing immediate relief must address these coverage gaps. Right now, emergency paid family leave would allow caregivers with school age and younger children to provide care until child care centers are accessible and schools fully reopen. Moreover, it would help all workers dealing with serious bouts of COVID, long-haul COVID symptoms, or workers caring for family members with serious COVID-related health issues to access job-protected time away from work.
Likewise, for workers — especially those working in-person — until COVID-19 is well-contained, access to paid sick leave for quarantining or recovery can be a matter of life and death, sickness and health. The FFCRA is estimated to have prevented more than 400 cases of COVID-19 per state and per day in states that did not have their own paid leave laws. (On a national level, the estimated number of prevented cases rose to more than 15,000 cases per day.) The case for paid sick leave is not just about public health; it is part of a larger conversation about racial inequity and the labor market.
It is no secret that the persons most susceptible to COVID-19 transmissions in the workplace often occupy “frontline” positions in both essential and non-essential sectors and are disproportionately Black people, Latinx people, Indigenous people, Asian people, and immigrants. Not only are workers in these jobs risking their health with little guarantee of paid sick leave, they are also more likely to receive low wages from their employers. A decision to take time off to recover from the virus could easily result in a potentially catastrophic or destabilizing loss of income or potential job loss. Knowing this, it is not surprising that some workers continue working while sick - an example of how policy failure endangers us all.
This reality ultimately affects everyone right now. Even prior to COVID, a substantial body of research demonstrated the relationship between paid sick leave, preventive health, containing the spread of contagion, reduced use of expensive emergency room health services, workplace productivity and more.
The American Rescue Plan Came at the Right Moment
Although the promise of wide-spread vaccination brings hope of an economic recovery and a return to stability for workers and caregivers, the reality is that the United States is still far from that point. At this very moment, millions of workers, children, and families are trying their best to survive a public health crisis, racialized violence, and an economic downturn. They are up against hunger, housing insecurity, health risks, systemic racism and caregiving challenges. Many do not know where or when their families will receive a paycheck — the uncertainty and fear are palpable.
Despite its exclusion of key paid family and sick leave provisions, the ARP remains a big freaking deal because its provision of essential aid ensures that workers and caregivers, many of whom are at the end of their rope, can receive crucial financial support. For many women of color, particularly those in low-paying jobs, the ARP is more than a lifeline. It is proof — proof that public policy, which has failed Black, Latina, Indigenous, and Asian women time and time again, can be more equitable in its design and supportive of those who need it the most.
- Individuals making less than $75,000 or less are eligible for the full $1400 payments. Heads of households making up to $150,000 or less and married couples making up to $150,000 will receive the full payment. Payments begin to decline when income is above the aforementioned thresholds. For every child, adult, and adult dependent, a household will receive $1400.