As Congress struggles to agree on a new stimulus bill to support people during the COVID-19 pandemic, it’s vital that we recognize what didn’t work in the first stimulus through the CARES Act. One thing has become shamefully clear: Congressional leaders’ lack of attention to the deep structural racial inequities that undergird economic fragility and joblessness in the first place has resulted in far too many Black and Latinx Americans being left out and left behind.
There is still an operating belief in a “rising tide lifts all boats,” a term attributed to President John F. Kennedy that proclaims government economic policy should focus on broad economic efforts. However, racial disparities are primarily produced and maintained by colorblind policies and practices. A stark historical example is the race-neutral GI Bill passed after World War II, which provided young men who might otherwise not have had the opportunity for post-high school education to receive college and vocational training and low-interest government-backed mortgages to buy their first homes. These programs unleashed massive wealth opportunities for white Americans, but due to discrimination in college admissions and in the housing markets, Black veterans were essentially shut out of all wealth-building opportunities. This is one reason among many that Black Americans now have a mere $0.10 for every $1 dollar of wealth owned by white people.
Without accounting for structural racism, the well-intended CARES Act became a “race-neutral” policy. While the $1,200 cash payment had many successes, the legislation overlooked the many marginalized Americans who are unbanked (60% of Black and Latinx families have no or limited access to banks), those who are undocumented, and those whose earnings are so low that they don’t file taxes. Families who didn’t file — a group with a high makeup of Black and Latinx Americans — were required to submit an additional application to receive the funds. Many people were not aware of or were confused by this process, and as a result, experienced delays in receiving payments or didn’t receive them at all.