COVID-19

Many lack a financial backstop amid pandemic

Kimberly Adams May 5, 2020
Heard on: Marketplace
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People pass by the stock exchange in New York. Marketplace-Edison poll data shows that many Americans can't handle an unexpected $250 expense. Spencer Platt/Getty Images
COVID-19

Many lack a financial backstop amid pandemic

Kimberly Adams May 5, 2020
People pass by the stock exchange in New York. Marketplace-Edison poll data shows that many Americans can't handle an unexpected $250 expense. Spencer Platt/Getty Images
HTML EMBED:
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One piece of data that jumps out in the latest Marketplace-Edison Research Poll is a measure of just how precarious many people’s finances are.

We asked people how difficult it would be for them to pay an unexpected expense of $1,000. Almost 60% of those polled said they would have a hard time swinging it.

But this time we added another part to the question: what about an unexpected expense of $250? More than 40% said they would struggle to manage that.

One person who responded to our survey was 66-year-old Thomas Benton in St. Louis. He’s a district manager for a fast-food restaurant, and in the midst of the pandemic his hours went from about 50 a week to 30.

“My financial outlook now is very bleak,” Benton said. He definitely couldn’t pay an unexpected expense of $1,000, and probably not $250 either, he said.

“I couldn’t even get $300 this morning. It’s kinda rough,” Benton said. 

He needed that $300 for rent this month. Normally, he might call friends and family to help in an emergency, but they’re in the same boat.

Sarah Sattelmeyer, project director at Pew Charitable Trusts, said even in normal times, many people would struggle to absorb a big, unexpected expense.

“More families are out of work, or living paycheck to paycheck, or are doing work and child care,” she said. “Even small, unexpected expenses can really throw a wrench in families’ balance sheets.”

For a lot of people, COVID-19 is the unexpected expense, with sudden job losses highlighting just how unstable financial stability can be.

“Not only do they not have savings, but they don’t even have income,” said Lissa Johnson, associate director of the Center for Social Development at Washington University. “They don’t have the income even to replenish any savings that they did have.”

In our poll, certain demographic groups seem much more cushioned against this economic shock than others. Twenty-seven percent of white respondents said an unexpected $250 expense would be difficult to cover, compared to 50% of Hispanics and 59% of African Americans, like Thomas Benton.

“Now, I got to use when I get paid next week — I got to get caught up, but this week, it’s kind of hectic,” Benton said.

It’s the kind of situation that creates economic anxiety at any time, and even more during a pandemic.

COVID-19 Economy FAQs

New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?

Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday  — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

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