The coronavirus pandemic has had a devastating effect on Americans’ financial wellness, erasing three years’ worth of financial gains in just three months.
According to a new report, more than half of Americans say their financial health was negatively affected—and people of color, women, younger generations, small businesses, and gig workers have all been disproportionately impacted.
The findings are part of Prudential’s 2020 Financial Wellness Census, released this week. The surveys were conducted in December 2019 and again in May 2020 to compare American’s financial health before and during the coronavirus crisis.
“The COVID-19 pandemic and its economic fallout revealed with shocking speed how fragile financial security is for Americans,” the report states.
“This crisis exposed deep fissures in our public health and economic systems, pervasive racial and social inequity, and how weak our collective immunity is to financial disruption,” John Kalamarides, president of Prudential Group Insurance, elaborated in a press release.
Key findings from Prudential’s Census include:
- 56% of Black Americans are worried about their financial future
- 22% of Black Americans saw their household income fall by half or more due to COVID-19
- The unemployment rate for Black Americans nearly tripled—from 7% in December 2019, which was near its low since national records began in 1972, to 18% in May 2020
- Median household income for Black Americans fell to $45,000 from $55,000; for the general population, it is $75,000
According to the report, Americans are looking for help first and foremost from the federal government. And what they most want is more affordable healthcare, followed by more secure supply chains, more flexible work options, and better government programs to support small businesses.
“COVID was the catalyst that lowered the river and showed the rocks that were the underlying causes—lack of accessibility, lack of emergency savings, and lack of a path toward sustainable financial wealth. This lack of financial resiliency is a threat to our American democracy because without a path toward the middle class that’s available for everybody, our society is at risk,” Kalamarides says in a video.
“The solution is not to have individuals and their families try to bootstrap themselves up. It’s about fixing the systemic challenges and problems and barriers that cause inequity within America.”