How could second stimulus check impact you and the economy? PFW expert explains

Coronavirus

FORT WAYNE, Ind. (WANE) — Leaders on Capitol Hill are in the process of approaching a deal for a COVID-19 stimulus relief bill, which as of now, appears to include a one-time $600 payment in addition to a $300 supplemental payment that will last for 10 weeks.

WANE 15 talked with a local expert to break down the components to these checks. What does it look like for people’s own bank accounts? And what does it mean for the larger economy?

Rachel Blakeman, the director of the Purdue University Fort Wayne Community Research Institute, said she has followed discussions about stimulus packages closely.

“If your choices are your standard unemployment claim or your unemployment claim with 300 additional dollars, I think most people would say that’s a better bargain,” said Blakeman.

She explained how unemployment insurance is a safety net for people who do lose their jobs, to ensure they still have money coming in. Those payments would result in more money flowing through the economy.

“The people who receive those checks are very likely to spend them, so that goes into paying rent, paying their mortgage, paying their utility bills, buying groceries, putting gas in their car,” said Blakeman. “This is a very good way to [get money flowing through the economy] because … they bought groceries, and people at the grocery store could then keep a roof over their head. I mean, we know that domino effect and so we want to keep those dollars flowing.”

Blakeman explained how the pandemic has been a “two-fold problem,” a public health problem and an economic problem.

In terms of public health, Blakeman said based on what medical leaders and doctors are saying about the coronavirus vaccine, we may be on the other side of this problem. She said the key to restarting the economy is the population getting vaccinated because getting vaccinated will allow people resume to their activities, which will in turn stimulate the economy.

“I think about some of the things that are unique to the Fort Wayne economy, that bring people to Fort Wayne – when are people going to feel comfortable resuming those activities?” said Blakeman. “If we’re thinking about the economic stimulus package, it’s really kind of holding us over until we get back to resuming economic life.”

Another question this stimulus bill poses is, will the 10-week period of getting the $300-per-week checks last people long enough for the economy to recover? Blakeman said in 10 weeks, it’s unlikely there will be widespread vaccination and have resumed life as “we’d like to.”

According to the Department of Workforce Development, in Allen County, at the end of August there were 7,641 continued unemployment claims. As of the week of Dec. 5, there were only 2,788. Statewide, Indiana is at 5% unemployment, which is relatively low.

However, Blakeman said these numbers may not provide the full story.

“We are seeing a decline in continued unemployment claims, but also that they may be stopping because they’ve run out of benefits it’s not because they found employment,” said Blakeman.

Regardless of how many are unemployed, Blakeman said its absolutely necessary for something to be done.

“Doing nothing is going to put a lot of people and families in a precarious position that simply that our social service agencies, our charitable giving is not equipped to bail out,” said Blakeman. “So with their needs, this is a government scale problem that needs a government scale response, for sure.”

To see how long it will take for the stimulus check to show up in your bank account once its approved, click here.

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