The Bay Area is blessed by the wealth of its dominant Silicon Valley tech industry and its abundance of high-paying jobs. But that also means fewer in the region will qualify for the next round of stimulus payments as President Biden readies his pen to sign the $1.9 trillion American Rescue Plan once it’s approved by Congress.
The direct $1,400 stimulus payments will go out to individuals earning $75,000 a year or less, with lesser amounts for those earning up to $80,000. Married couples earning up to $150,000 will qualify for two $1,400 checks, with lesser amounts to those earning up to $160,000.
But those income caps look a lot more generous in other parts of the country and California than they do in the Bay Area. According to an analysis by the Bay Area Council Economic Institute, a policy think tank, 52% of households in the nine-county Bay Area would qualify for the full stimulus payment based on reported earnings in 2019, compared with 70% of Los Angeles County households.
“The Bay Area’s higher-paying jobs translates to fewer stimulus payments,” said Greer Cowan, a research analyst at the institute.
California’s 2019 median household income was $80,423 — fifth highest among the states — compared with $64,044 in Texas and $59,198 in Florida. And while Bay Area counties boast six-figure median household incomes — $132,444 in Santa Clara, $121,795 in San Francisco, $107,589 in Alameda — even Los Angeles, home to Hollywood, is below the state median at $72,721, and counties such as Fresno are lower still at $56,926.
That’s still a lot of Bay Area residents who will be getting the full stimulus payment cards or checks — more than 1.4 million households. But it also means more than 1.3 million households would receive something less, if anything. And it’s far less than the 2.3 million households who’ll get the full payment in Los Angeles County alone.
Russell Hancock, chief executive officer of Joint Venture Silicon Valley, a policy analysis organization, said the pandemic has had a very uneven impact on the Bay Area’s different job sectors. While many tech workers could transition to online work from home, those in service jobs — about one in four in the Bay Area — couldn’t work from home, and with public health restrictions, many couldn’t work at all.
“We have two economies — the tech economy, which is doing just fine, they just had a banner year, and this whole stimulus question is irrelevant for them and frankly quaint,” Hancock said. “But there’s also the in-person economy — people who do their jobs in person or not at all.”
For those workers, Hancock said, the stimulus will be a lifeline.
Maria de Rueda, of San Jose, is among them.
“I’ve been adjusting to living only with the basics and trying to survive on unemployment and the little money my husband makes,” said de Rueda, a mother of two young daughters who was laid off in March from her hotel job and whose husband saw his construction work hours cut early in the pandemic. “All of it would help. We need help. I have unemployment and it helped us survive, but we’ll need to make more changes if we want to keep going forward.”
Those receiving the payments also will find the money won’t go as far in the Bay Area as elsewhere. Consider median rent for a one-bedroom apartment this month is $2,650 in San Francisco, $2,180 in San Jose and $2,000 in Oakland, according to the Zumper National Rent Report. In Los Angeles, it’s $1,900, and in Fresno, $1,120.
“The money that comes out is going to stretch a little farther in areas like Fresno than San Francisco,” said Mike Herald, policy director at the Western Center on Law and Poverty in Los Angeles.
There’s also more to the stimulus package than the direct payments deemed crucial to helping low-wage workers and their families. It extends the additional $300 a week in unemployment benefits through Sept. 6. It expands eligibility for subsidies under the Affordable Care Act (Obamacare). It raises the $2,000 Child Tax Credit to $3,000, and to $3,600 for parents of children under age 6, extends eligibility to parents of 17-year-olds, and will send the payments out monthly rather than as a refund after tax filings.
The plan also raises the maximum Earned Income Tax Credit for childless adults from $530 to nearly $1,500, raises the income limit for that credit from about $16,000 to about $21,000, and expands the age range for eligibility. It extends federal eviction and foreclosure moratoriums and provides another $25 million in rental assistance for those in arrears.
Bay Area residents left out of the tech windfall say the help is badly needed.
For Justin Blea, 37, of Albany, who lost his job as a barista at Oakland International Airport last March, the extra payments will be critical. He and his wife, who have a 4-month-old, are relying on his $720 a week unemployment and her job as a Spanish teacher.
“I don’t want to go into debt for things like food,” Blea said. “But if I don’t have an income, I will go into debt for everyday things. And then that becomes a burden for my family.”
Aleida Ramirez, a single mother with an 11-year-old daughter in Concord who lost both her part-time jobs early in the pandemic, is already considering the essentials she’d spend the stimulus money on.
“I would pay bills — I still owe in electricity, a little bit in credit card, I’d probably pay part of my rent next month,” said Ramirez, who’s selling handcrafted metal art online to get by. With the child tax credit, she added, “I’d pay my internet bills and the electricity bill. That’s a big help.”
