A year after the new coronavirus hit the US, many Americans are struggling with their finances, according to a wide-ranging report released by the Pew Research Center on Friday.
About half of all adults who are not retired say the pandemic has made it more difficult for them to achieve their financial goals. This increases to 58% for people with a lower income.
One of the goals is retirement itself: About a quarter of people over 50 said they have postponed or expect to postpone their retirement due to the outbreak.
About four in ten Americans say they got a pay cut or been fired, or live with someone who did. For Hispanic and Asian households, a majority have suffered such a loss of income: 61% of Hispanic and 58% of Asian households say they have had a pay cut or layoff.
Job losses were also distorted by income. Half of low-income workers lost jobs or wages, while one-third of higher-income workers reported the same, Pew found.
Pew’s data reflects the split economy, much of which went virtual last year when travel stopped and entertainment venues and eateries 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 are six times more likely to work remotely than their lowest-paid colleagues.)
This unequal reality is also reflected in the spending data. While low-income Americans were more likely to see declines in income, they were less likely to cut back, Pew found.
“Higher-income adults are also more likely than middle or lower-income people to say they spend less and have saved more money since the coronavirus outbreak,” the report said. More than 8 in 10 high-income adults say they spend less during the pandemic, while only a third of low-income adults say the same.
And there is a clear class divide in the reasons for austerity. Nearly 9 in 10 of high-income workers and two-thirds of middle-income workers spend less “because their daily activities have changed due to restrictions associated with the coronavirus,” Pew discovered. Scrapping the daily commute, canceled travel plans, and closed restaurants, which take away the lowest-paid jobs, also translate into less spending for middle and higher-income Americans.
Among lower-income adults, a majority “spend less because they are concerned about their personal finances,” Pew found.
The pandemic and its consequences have also taken a mental toll. Three out of 10 adults told Pew that they often worry about debt, with black and Latino workers more likely to worry more often than white respondents. Just under one in five Americans are concerned about paying their rent or mortgage on time or buying enough food for their families.
On the other end of the ledger, three in ten respondents (and four in ten high-income people) told Pew that they are better off financially than they were a year ago.
Overall, Pew found, Americans’ financial distress is less acute now than it was in April, when the economy was in free fall. Just over half of Americans said their personal financial situation was good or excellent, up six percentage points from April. But for those in pain, it has been a long time. Of the workers who personally lost their wages during the pandemic, half are still making less money than before the outbreak started, Pew found.