One year after the new coronavirus hit the United States, many Americans are struggling with their finances, according to a comprehensive report released Friday by the Pew Research Center.
About half of all non-retired adults say the pandemic has made it harder for them to reach their financial goals. This increases to 58% for people with lower incomes.
One goal 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.
About four in 10 Americans say they have had a pay cut or been fired or live with someone who did. For Hispanic and Asian households, most have suffered such income losses: 61% of Hispanic households and 58% of Asian households say they have had a pay cut or layoff.
Job losses have also been distorted by income. Half of low-income workers lost their jobs or paid, while a third of higher-income workers reported the same, Pew found.
Pew’s data reflects the bifurcated economy, much of which went virtual last year as the cessation of travel and the closure of entertainment and food places eliminated millions of lower-paying jobs. At the same time, large portions of professional workers in fields such as technology, law or finance have been able to do their job remotely. (An analysis found that better-paid workers are six times more likely to be able to work remotely than their lowest-paid colleagues.)
This unequal reality is also reflected in the expenditure data. While low-income Americans were more likely to see declining incomes, they were less likely to cut spending, Pew found.
“High-income adults are also more likely than middle-income or lower-income adults to say they have spent less and saved more money since the coronavirus outbreak began,” the report said. More than 8 in 10 high-income adults report lower spending during the pandemic, while only a third of low-income adults say the same.
And there is a clear division between the reasons for reducing spending. Nearly 9 out of 10 high-income workers and two-thirds of middle-income workers spend less, “because their daily activities have changed because of coronavirus restrictions,” Pew said. Abandoned daily commutes, canceled travel plans and closed restaurants that occupy the lowest paid jobs also translate into lower spending for middle- and higher-income Americans.
Among lower-income adults, most “spend less because they are worried about personal finances,” Pew said.
The pandemic and its consequences also affected the mentally. Three out of 10 adults told Pew that they often worry about debt, with black and Latino workers more likely to report frequent concerns than white respondents. Just under one in five Americans worry about paying their rent or mortgage on time or buying enough food for their family.
At the other end of the register, three out of 10 respondents (and four out of 10 high-income earners) told Pew that they were better off financially than a year ago.
In general, Pew found, Americans’ financial suffering is less acute now than in April, when the economy was in a 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 who suffer, it took a long time. Of the workers who lost their wages during the pandemic, half earn even less than before the outbreak began, Pew said.