A year after the new coronavirus was hit in the US, many Americans are struggling with their finances, according to a comprehensive report released by the Pew Research Center on Friday.
About half of all adults who have not retired say the pandemic has made it harder for them to reach their financial goals. It rises to 58% for people with lower incomes.
One of the goals is retirement itself: About a quarter of people over the age of 50 said they were delaying their pension due to the outbreak or expecting it to be postponed.
About four in ten Americans say they have taken a cut in salaries or that they have been fired, or that they live with someone who is there. For Spanish and Asian households, a majority experienced such income losses: 61% of Hispanics and 58% of Asian households said they had a salary or dismissal.
Job losses were also skewed by income. Half of the low-income workers lost or paid jobs, while a third of the higher-income workers reported the same, Pew found.
Pew’s data reflects the divided economy, which became virtual last year when travel was halted and entertainment and dining venues closed, eliminating millions of lower paid jobs. At the same time, large sections of professional workers in areas such as technology, law or finance were able to do their work remotely. (One analysis found that higher-paid workers were six times more likely to be able to work remotely than their lowest-paid colleagues.)
The unequal reality is also reflected in spending data. While low-income Americans would see more income fall, they were less likely to cut spending, Pew found.
“Higher-income adults are also more likely to say they have spent less and saved more money since the outbreak of the coronavirus,” those with middle- or lower-income people said. More than 8 out of ten high-income adults report fewer expenses during the pandemic, while only a third of low-income adults say the same.
And there is a clear class gap in the reasons why spending is reduced. Nearly 9 out of ten high-income workers and two-thirds of middle-income earners spend less “because their daily activities have changed due to coronavirus-related restrictions,” Pew found. Daily shuttles, canceled travel plans and shutter restaurants, which take out the lowest paid jobs, also lead to less spending for middle- and higher-income Americans.
Among lower-income adults, the majority spend ‘less because they worry about personal finances,’ Pew found.
The pandemic and its aftermath also took a toll. Three out of ten adults told Pew that they often worried about debt, and that black and Latino workers would worry more often than white respondents did. Just under one in five Americans is worried about paying their rent or mortgage on time or buying enough food for their family.
On the other side of the ledger, three out of ten respondents (and four out of ten high-income) told Pew that they were financially better off than a year ago.
Overall, Pew found, Americans’ financial distress is now less acute than in April, when the economy collapsed. Just over half of Americans said their personal financial situation was good or excellent, an increase of six percentage points from April. But for those who are in pain, it takes a long time. Among workers who personally lost wages during the pandemic, half earn even less money than before the outbreak began, Pew found.