Skip to content
Link copied to clipboard

How people in Philly are spending their coronavirus stimulus checks

The money, which arrived for many people on Wednesday, is sorely needed as government-mandated shutdowns of nonessential businesses and stay-at-home orders hammer economic output.

A pedestrian walks past the closed Nordstrom Rack in Center City Philadelphia on March 31, 2020. Nonessential retail businesses are closed due to the coronavirus pandemic.
A pedestrian walks past the closed Nordstrom Rack in Center City Philadelphia on March 31, 2020. Nonessential retail businesses are closed due to the coronavirus pandemic.Read moreTIM TAI / Staff Photographer

Sweeping efforts to rescue the economy from the crushing effects of the coronavirus pandemic have reached a new phase, as officials say the federal government made direct payments to tens of millions of Americans in recent days.

The direct deposits — $1,200 for adults who make $75,000 or less, with smaller payments for higher earners — were made as part of the $2.2 trillion economic stimulus package passed by Congress and signed by President Donald Trump late last month. Millions more checks are expected to be disbursed in the coming weeks and months. The physical checks will bear Trump’s name, as the president looks to take credit for any relief from the unprecedented economic crisis.

The money, which arrived for many people on Wednesday, is sorely needed as government-mandated shutdowns of nonessential businesses, along with orders for the vast majority of the country to stay home, continue to hammer economic output.

Philadelphia-area residents who have received direct deposits in their bank accounts said they were grateful for the cash infusion. But several said the payment should be recurring until the pandemic subsides, especially for the most financially vulnerable.

“This can only be the tip of the iceberg for the assistance everyone should be getting in this time,” said Kaley Maltz, 25, of Fishtown, who lost her job at a restaurant last month.

In interviews and on social media, people said they would use the money to pay their bills, support local businesses, and donate to those in greater need. Others, uncertain about how long government orders to stay home would remain in place, said they would save the cash.

As of last week, almost 17 million Americans, or 10% of the workforce, had filed jobless claims. As more factories are shuttered, U.S. manufacturing output has shrunk, recording its largest drop since just after World War II. And on Wednesday, the Commerce Department reported that U.S. retail sales plummeted 8.7% in March, shattering the previous record drop in November 2008, during the Great Recession; April’s numbers, analysts say, are likely to be considerably worse.

» READ MORE: Philly-area workers on losing their jobs in the coronavirus crisis: 'I feel trapped’

“A whole month without income is kind of frightening, especially with student loans and everything,” Maltz said. “Luckily I’ve been able to forebear them.”

She said she applied for unemployment benefits but isn’t sure if she’s eligible and has yet to hear back. Like in other states, Pennsylvania’s unemployment offices have been overwhelmed by the flood of new jobless claims. Maltz’s stimulus money arrived Wednesday morning.

“I had no idea when it was coming,” she said. “I checked my bank account ... and just felt super relieved to get it.”

She recently moved from South Philadelphia and will use the money to help cover her rent and security deposit.

The relief package gives $1,200 to single adults who make an adjusted gross income of $75,000 or less, based on the 2019 tax return or, absent that, the 2018. Those filing as the head of a household and earning up to $112,500 get $1,200, too. Married couples making up to $150,000 will receive a total of $2,400. Families can also get $500 per child.

For those earning more than those thresholds, the payments decrease by $5 for each $100 that a taxpayer’s income exceeds the threshold. The payments phase out for individuals making more than $99,000, $146,500 for head-of-household filers, and $198,000 for married couples.

Those with no income, or people who rely on government programs such as Social Security, also qualify.

» READ MORE: What to know about the coronavirus stimulus checks — and how and when you get your money

Elissa Thompson, a mother of two children, ages 2 and 5, said she and her husband, an analyst for Comcast, are saving half of the $3,400 they received and using the rest to pay their bills. “Considering it could be 18 months or something, we want to save money just in case they do cut [his] hours,” she said.

“We don’t want to just frivolously spend it,” said Thompson, who lives in Northeast Philadelphia. “Especially the way the grocery stores are. We’re spending three times what we usually do on groceries. There’s no sales. Everything’s really expensive.”

She added: “I don’t even want to go out to spend the money.”

That approach makes sense, said Diane Lim, senior adviser and outreach director of the Penn Wharton Budget Model. Rather than stimulate consumer spending, this relief package is designed to help people pay bills, buy essential goods, and stay at home during a public health crisis, she said. Large parts of the economy where consumers would normally spend their money are shut down.

“We are basically paying people, providing people with cash, in order to make it sustainable that they stay at home and not go to work,” she said.

Tracey Costello, 71, of West Philadelphia, said the money would help pay for the more expensive groceries she’s been buying lately. She spent $7 on some fancy pasta at Whole Foods on Wednesday because it was all that was left, she said. She paid twice as much for mayonnaise, too.

» ASK US: Do you have a question about the coronavirus and how it affects your health, work and life? Ask our reporters.

Costello also just adopted a cat because of the pandemic, so she expects the check to cover expenses associated with her new feline friend.

“So not much left over. None left over,” Costello said. “But I’m happy because I wasn’t expecting it and it will make me feel better."

Jim Adair, 31, said he counted himself among the lucky ones: still employed, and mostly unaffected financially. Adair, who works in publishing, said he wants to use the $1,200 to help pay for a move to a new apartment and to help local businesses.

“The longer this goes on, I get concerned about them perhaps not being able to reopen,” said Adair, of South Philadelphia.

People who felt financially secure enough were considering ways to donate their checks.

“I found myself in this position of being very fortunate,” said Lillian Dunn, 34, who works for a community arts nonprofit in North Philadelphia. “I’m working from home. I’m not navigating the front-line anxieties and challenges. And I still have my income.”

» READ MORE: Stimulus payments are starting to arrive. If you can afford it, here’s how to use that money to help Philly.

She said she had become dismayed by Philadelphia’s criminal justice system — specifically how its cash bail policy can result in jail time for those who can’t afford to pay a few hundred dollars. Public health advocates have warned that county jails are breeding grounds for the spread of the virus.

So last week Dunn donated her check to the Philadelphia Community Bail Fund, a group that posts bail for those who can’t afford it.

“That system is already inhumane," Dunn said, noting that the first Philadelphia jail inmate died from complications of the virus on Tuesday. "And now you have women in that position who are now being exposed.”

This article contains information from the Associated Press.