Nearly one-quarter of Americans ended 2020 worse off financially than they were 12 months ago, according to results from a Federal Reserve survey released Monday.
A survey conducted by the Fed in November found that 24 percent of Americans said their financial standing took a hit amid the pandemic, 10 percentage points higher than at the end of 2019. The percentage of Americans reporting a decline in their finances was the highest recorded by the Fed’s annual Survey of Household Economics and Decisionmaking (SHED) since 2014.
“This new survey gives us valuable details about the financial challenges families have faced during the pandemic,” Fed Governor Michelle Bowman said in a statement. “Even as the economy has improved, we can certainly see that some are still struggling, especially those who lost their jobs and those with less education, many of whom fell further behind.”
The U.S. economy is expected to bounce back strongly from the pandemic-driven recession, which caused the quickest and steepest economic decline since the Great Depression. Even so, millions of Americans who lost their jobs or faced other financial hardships during the pandemic are facing much steeper roads to recovery.
While nearly one-in-four Americans reported being worse off financially, that ratio is far higher for Black and Hispanic Americans.
The percentage of white respondents who said they were doing “at least okay financially” ticked up from 79 percent in 2019 to 80 percent in 2020, but declined from 65 percent to 64 percent for Black Americans and from 66 percent to 64 percent for Hispanic Americans.
The proportions of Black and Hispanic Americans that ended 2020 worse off financially also rose by 12 and 14 percentage points, respectively, while only rising 9 percent for white respondents.
The survey also found significantly more hardship among respondents with lower levels of educational attainment, which makes them more likely to hold a job that requires physical presence at a business and couldn’t be adapted to teleworking.
While 89 percent of adults with at least a bachelor’s degree said they were doing at least OK financially, only 67 percent of those with only a high school degree and 45 percent with less than a high school degree said they were on stable footing.
“Layoffs during the pandemic were concentrated among workers with fewer financial resources, which further exacerbated pre-existing disparities in their financial well-being,” the Fed said.
“Those who were laid off during the pandemic typically had a relatively small financial cushion to begin with, as less than two-thirds of those who were laid off said they were doing at least okay financially in late 2019, before experiencing job loss.”