A few days ago I noted that low-income workers were still spending a lot, thanks largely to assistance from the CARES program, but they’re also still unemployed at high levels. My evidence was a little indirect, though, so I’m happy to present direct evidence for this based on data from Raj Chetty’s economic tracker. Here’s consumer spending:
The lowest income group has been spending at pre-pandemic levels since June, while the highest income group is still holding back. But here’s employment:
Low-wage workers are still far below their pre-pandemic levels of employment, while high-wage workers are back to normal and even mid-wage workers are close to normal.
Today, economists at Goldman Sachs became the latest to issue a warning that economic recovery will falter if Congress doesn’t provide more federal aid. That’s nearly a unanimous view these days, but these charts make it clear what kind of federal aid we need: not broad-based stimulus, but specific assistance to those who have lost their jobs. Let’s get with it.