Fifty-one days after taking office, President Biden signed into law the $1.9 trillion American Rescue Relief Bill, one of the most important pieces of legislation in the past 50 years. The bill is significant in many ways.
It will put money directly into the hands of lower- and middle-income Americans, those most in need of support. The bill directs $1,400 payouts to millions of Americans and continues unemployment checks for millions more as the country pulls itself out of the economic devastation of a pandemic that has killed more than 530,000 of its citizens. As itemized by Eric Levitz in New York magazine, the bill will have a broad range of impacts.
• A family of four with one working parent and one unemployed one will have $12,460 more in government benefits to help them make ends meet.
• The poorest single mothers in America will receive at least $3,000 more per child in government support, along with $1,400 for themselves and additional funds for nutritional assistance and rental aid.
• Child poverty in the U.S. will drop by half.
• More than 1 million unionized workers who were poised to lose their pensions will now receive 100 percent of their promised retirement benefits for at least the next 30 years.
• America’s Indigenous communities will receive $31.2 billion in aid, the largest investment the federal government has ever made in the country’s Native people.
• Black farmers will receive $5 billion in recompense for a century of discrimination and dispossession, a miniature reparation that will have huge consequences for individual African-American agriculturalists, many of whom will escape from debt and retain their land as a direct result of the legislation.
• The large majority of Americans who earn less than $75,000 as individuals or less than $150,000 as couples will receive a $1,400 stimulus check for themselves and another for each child or adult dependent in their care. The poorest fifth of U.S. households will see their income rise by 20 percent.
• America’s child-care centers will not go into bankruptcy en masse, thanks to a $39 billion investment in the nation’s care infrastructure.
• Virtually all states and municipalities in America will exit the pandemic in better fiscal health than pre-COVID, which is to say a great many layoffs of public employees and cutbacks in public services will be averted.
• No one in the United States will have to devote more than 8.5 percent of their income to paying for health insurance for at least the next two years, while ACA plans will become premium-free for a large number of low-income workers.
• America’s unemployed will not see their federal benefits lapse this weekend and will have an extra $300 to spend every week through the first week in September.
This is a small sampling of the COVID-relief bill’s consequences, but it is sufficient to establish that something has dramatically changed in America. It should be noted that within a few weeks of the bill being signed into law, the IRS is expected to issue the bulk of the money directly into Americans’ bank accounts, using direct-deposit account information on file. David Brooks, a respected writer for the New York Times, has already labeled Joe Biden, a “Transformational President.”
Of course, the bill includes billions of dollars to facilitate the distribution of vaccines. As President Biden highlighted in his national address, the plan is to have vaccines available for all Americans by May 1 and have as many people vaccinated by July 4, Independence Day, so citizens can have get-togethers will their vaccinated family and friends.
What does this all mean for the freight industry? Clearly, the quicker everyone gets vaccinated, the faster the U.S. economy recovers. As a derivative of this, a speedy economic recovery would result in higher freight volumes. As Americans reach “herd immunity,” certain industries that have been devastated by the pandemic (i.e., travel, hotels, restaurants, retail stores) will be able to rehire workers. These workers will be in a better position to buy goods and services. The strong upswing in the stock market in recent weeks suggests that investors are projecting positive financial results in the months ahead.
Looking specifically at the Covid Relief bill, some of the money that Americans will be receiving in the coming weeks as direct deposits will go to paying off debts, making overdo rent or mortgage payments, and bolstering savings accounts. But for many lower income Americans, this money will be spent on food, clothes, and other products.
While this is good news for manufacturers and distributors, the pre-pandemic issues of driver and equipment shortages remain and will likely be exacerbated by an upswing in demand. Shippers need to explore a full range of asset and non-asset-based transportation options to deliver their merchandise. Carriers need to focus on those segments of their businesses for which they have sufficient capacity and how quickly they can increase their capacity.
Of course, there will be challenges as the U.S. and the rest of the world return to a new normal. Some businesses that failed during recession will not be able to come back. The pandemic has changed our way of life and current business models. Some people are now returning from their country properties to their offices in large cities. Other people, with the popularity of Microsoft Teams and Zoom meetings, are changing their real estate requirements and operational processes. Many consumers have become much more comfortable shopping from home. The post-pandemic world, even with the boost from the Covid relief bill, will not be the same as the pre-pandemic world. Every shipper and freight company needs to evaluate how the needs of their consumers have changed so they can adapt their business models to the new realities.
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