A year after the new coronavirus hit the United States, many Americans are struggling with their finances, according to an extensive report released Friday by the Pew Research Center.
About half of all non-retired adults say the pandemic has hampered their financial goals. This increases to 58% for people on lower incomes.
One of the goals is retirement itself: About a quarter of people over the age of 50 say they have delayed their retirement due to the outbreak or expect to delay it.
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Job losses are also distorted by income. Half of low-income workers have lost their jobs or wages, while one-third of higher-income workers report the same, Pew said.
Pew’s data reflects the bifurcated economy, much of which became virtual last year as travel stopped and entertainment venues closed, eliminating millions of lower-paid jobs. At the same time, large numbers of professionals in areas such as technology, law or finance could 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 counterparts.)
This unequal reality is also reflected in the cost data. While low-income Americans are more likely to see a drop in income, they are less likely to cut costs, Pew said.
“Higher-income adults are also more likely than middle-income or lower-income adults to say they spend less and save more money since the onset of the coronavirus outbreak,” the report said. More than 8 out of 10 high-income adults report spending less during a pandemic, while only a third of low-income adults say the same.
And there is a clear class difference in the reasons for cost reductions. Nearly 9 out of 10 high-income workers and two-thirds of middle-income workers spend less, “because their daily activities have changed due to restrictions related to the coronavirus,” Pew said. Disabling daily travel, canceled travel plans, and closed restaurants that employ the lowest paid jobs are also becoming less costly for middle- and higher-income Americans.
Among lower-income adults, the majority “spend less because they worry about personal finances,” Pew said.
The pandemic and its aftermath also took mental toll. Three out of 10 adults told Pew they were often worried about debt, with black and Hispanic workers more likely to report worries than white respondents. Slightly less than one in five Americans worries about paying their rent or mortgage on time or buying enough food for their family.
At the other end of the ledger, three out of 10 respondents (and four out of 10 high-income earners) told Pew that they were financially better than a year ago.
Overall, Pew found Americans’ financial disaster was less severe than in April, when the economy was in free fall. Just over half of Americans said their personal finances were good or excellent, an increase of six percentage points from April. But for those who are in pain, it is long lasting. Among workers who personally lost wages during the pandemic, half still make less money than before the outbreak, Pew said.