MA Low-Income Earnings Dropped By Half At Height Of Coronavirus

MASSACHUSETTS — Low-income Massachusetts residents saw their earnings cut almost in half at the height of the coronavirus economic shutdown, according to a new report from a Harvard-based research team.

Massachusetts consumer spending fell by 40 percent and small business revenue fall by over 50 percent. More than a third of the state's small businesses were closed in mid-April, the height of the outbreak in Massachusetts.

The analysis, from Opportunity Insights, uses data from credit card processors, payroll firms and financial services firms. The researchers created an economic tracker with data at the metro, county, state and national level.

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As of the most recent data available, the Massachusetts economy remained shut-down to a large extent, even with the official partial reopening. As of June 22, 23.5 percent of small businesses were still closed.

But consumer spending has nearly recovered: as of June 24, it's just 2 percent below January levels.

Data on low-income earnings and employment isn't available after May, when it topped out 44 percent above January levels. The earnings data does not include government benefits, like the $1200 stimulus payments and boosted unemployment benefits.

The numbers are even more dramatic in the Boston area, where consumer spending was still 15 percent below January levels as of June 24 and small business revenue was down 49 percent as of June 22. Low income earnings fell by over 50 percent.

The tracker is accompanied by a study finding that high-income Americans sharply reduced spending in mid-March, which resulted in cuts to businesses in high-income areas, mostly hitting low-income employees.

"State-ordered reopenings of economies have little impact on local employment," the authors note. "Stimulus payments to low-income households increased consumer spending sharply, but

had modest impacts on employment in the short run."

The Paycheck Protection Program, directed largely at small businesses, also had little impact on low-income employment, according to the study.

In Massachusetts, consumer spending fell dramatically beginning in mid-March, bottoming out on the 29th. The state's stay-at-home advisory went into effect March 24, a week after spending began following.

Low-income earnings fell more gradually, from early March to early May.

The tracker also includes data on coronavirus cases and deaths, online math participation, time spent away from home and unemployment claims.

This article originally appeared on the Boston Patch