It’s been one year since the coronavirus crisis brought the economy to its knees, and some people may never financially recover.
Despite recent signs of improvement — including modest job gains and progress on Covid-19 vaccine shots, which paves the way to a more open economy — about half of working adults in the U.S. said the pandemic’s impact will make it harder for them to achieve long-term financial goals, according to a new report by the Pew Research Center.
Among those who said their financial situation has gotten worse, 44% said it will take three years or more to get back to where they were 12 months ago — and 1 in 10 said their finances will never entirely be the same.
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“There are certain groups that have not only experienced job loss in their household, but they are having to take on debt — those are things that have consequences for their future,” said Juliana Horowitz, one of the authors of the report.
Inequality has been a hallmark of the pandemic recovery, marked by job loss for those at the bottom and soaring wealth for those at the top.
This so-called K-shaped recovery has split the nation nearly in half, with the wealthiest Americans faring even better than before, while millions more have faced setbacks.
Lower-income adults, as well as Black and Hispanic Americans and those under age 30, were the most likely to say they or someone in their household lost a job or suffered a pay cut since the coronavirus outbreak began, Pew found.
As a result, they’ve had to put off paying certain bills and take on debt in the face of pressing financial concerns, including food insecurity.
Meanwhile, upper-income adults were more likely to say their family’s financial situation improved in the last year, largely due to spending less and saving more money.
“Upper-income adults are also more likely to have jobs that can be done from home, so they haven’t experienced job losses to the same extent,” Horowitz said.
Arrows pointing outwards
About 4 in 10 wealthy Americans said their family’s financial situation changed for the better, compared with 32% of those with middle incomes and just 22% of lower-income adults, Pew found.
An overwhelming majority of upper-income adults — roughly 86% — said their finances are in good, or even excellent, shape. The same is true for about 6 in 10 adults with at least a four-year college degree, white and Asian Americans, men and those who are 65 and older.
Alternatively, about three-quarters of lower-income adults, Blacks and Hispanics, and those without college degrees said their personal finances are in fair or poor shape.
The Pew Research Center polled more than 10,300 U.S. adults in January.
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