The Economic Fallout from the Pandemic

Facing an enduring physical and financial health crisis, social unrest, caregiving challenges, and uneven hardships, Americans’ confidence and perceived control over their financial destiny is fading, according to new research by Prudential. One year into the pandemic, the findings paint an especially stark picture that shifts profoundly across demographics. As the pandemic and economic fallout persist, optimism about a bedrock ethos of opportunity and progress will surely remain one measure of our nation’s resilience in 2021.

introduction

HOUSEHOLD INCOMES ARE PLUMMETING

MENTAL AND PHYSICAL HEALTH

WORK DEMANDS ARE RISING

MONEY WORRIES

CAREGIVING

explore

METHODOLOGY This poll was conducted by Morning Consult on behalf of Prudential between Dec. 18 and 20, 2020, among a national sample of 2,201 U.S. adults, age 24 – 74. The interviews were conducted online, and the data were weighted to approximate a target sample of adults, age 24 – 74 based on age, race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.

Methodology: This poll was conducted by Morning Consult on behalf of Prudential between Dec. 18 and 20, 2020, among a national sample of 2,201 U.S. adults, age 24 – 74. The interviews were conducted online, and the data were weighted to approximate a target sample of adults, age 24 – 74 based on age, race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points. © 2021 The Prudential Insurance Company of America and its affiliates, Newark, NJ. 1046460-00001-00

Nearly half (46%) of Americans describe themselves as financially struggling, up from 22% in May 2020.

RESILIENCY

Financial Wellness Census

Special Report

Household incomes are plummeting

are below $30k compared to 19% in May and nearly 1/5 (17%) of respondents report their HHI has been cut in half. 42% of women and 52% of Black Americans have an annual HHI under $30k

say they have fallen behind in paying bills versus 11% in May, and 9% have missed a mortgage or rent payment

of people are taking on debt, and many are borrowing or withdrawing from their 401(k) (11%), IRA (6%) and life insurance (6%) as a result of the pandemic. Groups reporting the highest levels of increased debt include Latino Americans (23%), millennials (23%), and women (20%)

cite a decreased confidence in meeting their financial goals, and 31% say their ability to achieve those goals is out of their control. Confidence has especially decreased among women (49% vs. 39% men) and millennials (53% vs. Gen X 49% vs. boomers 31%)

of people say they would like to see more affordable health care as a result of the pandemic

have indicated a reduction or complete stop of spending on health and medical expenses for themselves/their family following an income disruption due to the pandemic

report their household has medical debt, and for those without emergency savings, this rises to 26%

of respondents have sought support for mental health as a result of the pandemic

Mental and physical health are suffering in the wake of the COVID-19 crisis, sharply declining from early on in the pandemic.

agree they are finding it “increasingly difficult to keep up with my financial obligations, despite having a job”

of those with an income disruption or job loss have had to utilize a food bank, and 10% received assistance from a charitable organization

of workers have seen their compensation reduced since the pandemic hit

of respondents report increased work hours, with 8% saying they are uncompensated for the time and evolving demands

Unemployment is higher among people of color

Work demands are rising, while compensation is dropping.

of Latino Americans and 26% of Black Americans say they are unemployed versus 19% of White Americans

TOMORROW

For people with an income disruption:

NOW

Has the COVID-19 pandemic caused you to do any of the following?

Money worries are on the rise and many Americans are gripped by immediate needs, making it difficult to seek protections for the future.

have sold items they own

have taken money from savings

have applied for/used government benefits

have borrowed money from family or friends

have cut service/ reduced monthly bills

have taken on some temp/gig work

For all respondents:

take part in professional development or education (new certifications, degrees, or training courses)

write a will, estate plan, or trust

start a new business

create a health care proxy, living will, or power of attorney

purchase guaranteed income products or annuities

start working with a financial planner

create a formal financial plan

of respondents who are working say they’re struggling to keep up with caregiving needs. For working parents, this rises to 49% agreement

of those not working say they left the workplace due to increased caregiving needs

Caregiving is an essential need, and Americans are calling for government support on this and other issues.

agree the government needs to step in to allow more employees access to paid family leave

agree the government needs to prioritize more solutions for child care and caregiving in this country

agree the government has not done enough to address the financial needs of individuals

wish the government moved more quickly to address the financial needs of individuals

agree the pandemic has highlighted big gaps in the social safety net in times of crisis

say they have emergency savings (down from 61% in Oct. 2017), and 20% have reduced or exhausted emergency savings

of Americans say they do not anticipate feeling any financial impact from COVID-19. Just 5% say their finances are in better shape than ever

of Americans do not feel the pandemic has caused them to realize their own resiliency

anticipate financial strain for the long haul, saying it’ll take years to recover financially

Resiliency: Are we there yet? The answer is decidedly no.