The U.S. Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2020 found that nearly a quarter of U.S. adults felt their financial situation was worse compared to a year earlier.
A greater proportion of adults in the United States reported being in a worse financial position in 2020 than in previous years, the Federal Reserve said on Monday, while those who entered the coronavirus pandemic on less secure financial footing ended the year on even more fragile economic ground.
The Fed’s report on the economic well-being of U.S. households in 2020 found that nearly a quarter of U.S. adults said they were in worse financial shape than the previous year – the highest proportion since the start of the survey in 2014.
And not all groups believed pain in the same way the pandemic exacerbated the inequalities that had persisted for a long time, especially by race and level of education.
“A clear trend from the survey is that the financial challenges in 2020 were uneven, and often left those who entered the year with fewer resources further behind,” the report says.
For example, the gap between adults with at least a bachelor’s degree who reported doing well last year and adults with less than a high school diploma was 44 percentage points, or ten points percentage more than in 2019.
Less than two-thirds of African American and Latino adults said they were doing well financially last year, compared to 80% of white adults and 84% of Asians. And the difference in financial well-being between white adults and black and Latino adults has increased by four percentage points since 2017.
More educated Americans were more likely to be among those who saw their incomes and bank balances increase in the last year, while those who had not completed high school were more likely to be counted with those who did. reported declining income and bank balances.
Employment status was also strongly taken into account. People who kept their jobs during the pandemic tended to have stable or improving finances last year, while those who suffered layoffs or a prolonged period of unemployment – a group that leans toward Americans who already had less financial resources before the pandemic – saw their financial well-being deteriorate in 2020.
Among the laid-off workers, about 45% were either unable to pay their bills last November or would have struggled to do so had they been faced with an unforeseen expense of $ 400. The share of Americans falling into this category was “significantly higher” among African-American and Latino workers, as well as those with a high school diploma or less, according to the report.
“Even though the economy has improved, we can certainly see that some are still struggling, especially those who have lost their jobs and those who are less educated, many of whom have fallen behind,” said the governor of the Federal Reserve, Michelle W Bowman, in a press release. on the Fed’s website.
The increase in child care demands stemming from distance education and daycare closures has had a direct impact on the fortunes of Americans.
Some 22 percent of parents said they were not working or working less due to disruptions from COVID-19 – a group more likely to include African American, Latin American and single mothers as well as low-income mothers. returned.
In a possible harbinger of more disparities on the horizon, around 59% of parents with K-12 children said their children would not learn as much through distance schooling as they do. they would if they had attended the class in person.
The report builds on the Federal Reserve Board’s eighth annual survey of household economics and decision-making (SHED), which surveyed 11,000 adults in November of last year – about eight months after the start of the pandemic.