The Department of Consumer and Business Affairs completed a review of what literature and research exists on the impacts of COVID-19 on the financial well-being of Los Angeles County households. This research underscored a key focus for this project: Low-income communities and communities of color went into the pandemic more economically vulnerable, and multiple, overlapping economic hardships that are impacting the ability of these communities to achieve sustainable economic recovery. The U.S. Census Bureau report, Multidimensional Hardship in the U.S. During the COVID-19 Pandemic, published on August 17, 2021, provides a nuanced view on pandemic-related economic hardship, asserting that income poverty is an incomplete picture of financial wellbeing. Instead, an intersectional analysis that looks at multiple hardships provides a more accurate depiction of the overlapping crises confronting low-income households. Specifically, the report found that at the peak of COVID-19 cases in July 2020, as many as 16.4 percent of these households experienced multiple hardships. However, by March 2021, about 9.5 percent still faced multiple hardships.
Research also found that direct community investments made a significant, and in many instances, life-saving, differences for the most economic vulnerable householders. The Center for Budget and Policy Priorities found that hardship in 2020 and 2021 would have been far worse without intervention by federal, state and local governments in response to the pandemic. Key hardship indicators showed strong improvement during early 2021, aided by job growth and government benefits. Hardship rates fell especially fast after the enactment of the American Rescue Plan Act on March 11, 2021, which included $1,400 payments for most Americans as well as other assistance to struggling households. Still, the Center for Budget and Policy Priorities also highlighted the fact that Black and Latino adults continued to have difficulty covering expenses at higher much higher rates, 44 percent and 38 percent, respectively, compared to 23 percent for white adults and 21 percent for Asian adults. Additionally, renters of color and families with children consistently reported higher rates of rent hardship throughout 2020 and 2021.
Our research consistently points to similar intervention points for supporting low-income households in economic recovery:
- Helping working-class households to pay regular household expenses
- Building up emergency savings
- Addressing housing burden
- Address food insecurity
The COVID-19 pandemic was also a wake-up call for many Americans. According to Caring.com, 1 in 5 people who died of COVID-19 did not have an estate plan in place1 leaving their loved ones to face not only with their loss, but also the stress and difficulty caused by not having estate planning documents in place. An estate plan helps bypass expensive probate and many administrative burdens and can be a source of comfort for loved ones since it can leave clear instructions on the decedents last wishes. However, the high-cost of legal fees creates a justice gap for low-income communities leaving them without a means to create a plan for intergenerational-wealth building. This project fills this gap. This project will invest $3.5 million to provide direct investments in CBOs who serve LA County’s low-income communities, with a focus on intergenerational-wealth building. This project will alleviate the economic impact that the pandemic had on our most in-need communities and provide access to critical resources to ensure that their assets have a vehicle in place to pass on to heirs thus ensuring the economic resiliency of the household.
The project will also fund administrative and staff costs to develop and implement since August 2021.
