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Many Americans have experienced a household job or wage loss due to the COVID-19 outbreak in the last month and a half as over 26 million people have filed for unemployment. According to a new Pew Research Center survey, lower-income adults are experiencing a greater economic impact than adults with higher income levels, a group that already felt financial pressure before the pandemic claimed the United States. While 43 percent of adults report that they or someone in their household has lost a job or taken a pay cut due to COVID-19, this percentage increases to 52 percent among lower-income adults.
Not only are half of lower-income adults in the U.S. struggling to pay their bills and rent because they have lost their job or experienced a reduction in pay, but they are also unlikely to have substantial savings to offset this unforeseen financial burden. Among lower income adults, only one out of four, or 23 percent, say that they have enough “rainy day” funds set aside to financially support them for three months in case of job loss, sickness or an economic downturn.
In contrast, 48 percent of middle-income adults and 75 percent of upper-income adults have sufficient funds set aside to live off of for three months or more. In the month of April, over half of lower income adults – at 53 percent – reported that they are having trouble paying some of their bills this month. A quarter of middle-income adults and 11 percent of upper-income adults say they are experiencing similar financial constraints, in comparison.
Within the lower-income category, some groups are feeling job losses more acutely than others. For instance, about six out of 10 Hispanic adults, or 61 percent, say that they or someone in their household has lost their job or experienced a cut in wages due to the global health pandemic. In comparison, roughly half or fewer black and white adults report the same. In addition, adults without a bachelor’s degree are more likely to report a job or wage loss in their household than adults who hold a college degree.
Many American adults report that they had trouble paying all their monthly bills even before the coronavirus outbreak. In fact, 24 percent of adults were unable to pay some of their bills or only make partial payments per month. Now, due to an even greater financial burden caused by COVID-19, 32 percent say that they will not be able to pay their bills this month.
There is a wider gap among Hispanic adults between those who report that they won’t be able to pay their bills in the month of April compared to other months: 44 percent say that they won’t be able to pay their bills this month, while 28 percent say that this has been the case for months prior to the coronavirus outbreak.
The gap in the share saying they won’t be able to pay their bills this month compared with an average month is particularly wide among Hispanic adults: 44% say they won’t be able to pay all of their bills this month, while 28% say this is typically the case – an increase of 16 percent.
Lower income adults will be able to use the stimulus check provided by the CARES Act to cover bills or to pay for essential items. Of lower-income adults who have received their stimulus check, 71 percent say they are using the check to pay bills or other essential items. Only 11 percent said they will be able to use the stimulus check to pay off debt or build their savings. In comparison, 49 percent of middle-income adults and 34 percent of upper-income adults say they are using their stimulus check for the same.
Read the full report here.