The latest inflation figures from the federal administration, the core personal consumption expenditures price index, showed that prices have eased from the record highs of the first quarter. But financial stress continues to plague workers as they are trapped in the steepest inflation seen in 4 decades. This has made a stimulus check more urgent at the moment.
Two-thirds of workers across the US realize that their salaries are falling way short of the pace of inflation. The number of employees considering quitting their jobs is at a 4-year high. And two-thirds of workers say that inflation has negated any gains that they may have made in salary in the past year. 19% say that their salary has just about matched the rate of inflation while only 13% said that their salary has increased more than inflation.
Americans across all wage levels have voiced their frustration about the price gains and have stayed well ahead of any gain in wages. This has been validated by economic data. The squeeze is particularly high for the middle class. People with incomes between $50,000 and $150,000 are more likely than low-income or high-income groups to have their salaries not keep pace with the rate of inflation.
The number of people who say that they are not well paid is at an all-time high at 28%. 39% of workers are seriously considering giving up their jobs, which is 6% since last November.
While the latest inflation readings have spurred hopes that the peak inflation rate is behind us, an easing of prices doesn’t indicate that inflationary pressure has cleared.
Real growth in wages is down across the distribution range. It is the middle-income workers who are the worst. Low-wage workers have seen a significant increase in wages while it has been stagnant for middle-class workers.
States Move Could Ease Pain Of Workers With Stimulus Check
Around $5T was injected directly into the American economy. Of this, around $1.8T went directly as stimulus checks to families and individuals. Small and medium businesses received another $1.7T.
The federal administration has turned its focus on infrastructure even as economists have warned that further federal stimulus will increase the rate of inflation. The inflation rate peaked in March this year, reaching a four-decade high of 8.5%. Any further stimulus support is bound to remain paused till inflation eases considerably.
While most states are yet to legislate on the issue, several states have already moved ahead and residents should be getting a stimulus check in June. Multiple sectors of the American economy have seen healthy growth but the redundancy rate has stayed beyond where it was before the COVID-19 pandemic. Other support measures including the enhanced Child Tax Credit payment have been stopped.
The federal administration has already expended trillions of dollars in direct stimulus payments over the past two years. It was time they hit the pause button in 2022. States have taken over at this stage and have used their surplus funds from the federal Rescue Fund and from their surplus state budgets to send out stimulus checks.
Not all states will succeed in pushing through legislative measures to give stimulus checks to their residents, some states are going ahead with statutory measures.
States Differ In Form And Amount Of Stimulus Check Support
California was the first state off the mark and ran up a surplus in the past 2 years. They gave two stimulus checks in succession, the Golden State Stimulus I and II. Besides, Governor Gov. Newsom has recommended additional measures through a gas card that will give residents a $400 per card, for a maximum of 2 cards per family. The payments could come in by July.
The administration in Illinois has proposed a stimulus check directly to the mailbox of residents in September. It amounts to $100 for each individual and another $50 for each child in the household. The state has also proposed $300 as property tax relief payments. Other measures being considered are the grocery tax and gas tax freeze for six months while a 10-day restriction on tax on school supplies may be initiated in August.
Residents of Idaho will receive rebate payments or direct transfers of 12% of their 2020 taxes with a minimum amount of $75.
Maine has been way ahead of the pack as it has already passed a bill through the legislature. Governor Janet Mills will be sending residents of the state a stimulus check of $850. The money comes from the $682M surplus enjoyed by the state.
Residents of New Mexico who have filed their returns could get a stimulus check of up to $500 for families who file jointly and have an income that is $150,000 or less. For individuals, the amount comes to $250 for individuals with income below $75,000.
There are also credits of $1,000 for full-time nurses in hospitals, and a refundable CTC of up to $175 per child. Vets can get a three-year partial exemption in income tax and also an extension in tax credit for the solar market which is equal to a tenth of the installation and purchase costs.
Lawmakers in Indiana have approved an extension of the $125 stimulus payment to residents that will go out to 450,000 low-earning residents.
The governor of Georgia, Brian Kemp has also signed a stimulus check bill for residents. It would send a one-time refund of $250 to individual taxpayers and $500 to joint filers. Heads of households will get a rebate of $375.
The governor of New Jersey, Phil Murphy, has proposed a stimulus check of $500 to low earners who file through their tax identification number rather than through the Social Security number. This initiative is an effort to bring in undocumented immigrants under the stimulus check cover.
Legislators in Virginia are working out the details of a potential stimulus check worth $300 to all taxpayers in Virginia. There are two other bills under a proposal that will eliminate or reduce the grocery tax in the state and suspend the 26.2% gas tax for one year.
A property tax rebate is in the offing for New York residents that range between $425 and $970. The relief payments are for low-income and middle-income individuals and households. The state is also considering suspending the state tax on fuel till December.