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The Fed’s report on the economic situation of American households in 2020 found that nearly a quarter of American adults said that their economic situation is worse than a year ago.
The Federal Reserve said on Monday that by 2020, the financial situation of American adults will be worse than in previous years, and in the case of more unstable economic conditions, adults who entered the coronavirus pandemic with less secure financial conditions will end this year. .
The Fed found in the report “The State of the American Family Economy in 2020” that nearly a quarter of American adults have worsening financial conditions than the previous year, which is the highest proportion since the survey began in 2014.
Not all groups are equally distressed, because the pandemic has exacerbated worsening inequality, especially in terms of race and education.
The report said: “The clear pattern from the survey is that the financial challenges in 2020 are uneven and often make people entering the year get fewer resources.”
For example, last year, the gap between adults who had at least a bachelor’s degree and reported that their financial situation was good and those who did not receive high school education was 44 percentage points, a full ten percentage points higher than in 2019.
Less than two-thirds of African-American and Latino adults said that their financial situation was good last year, while the proportions of white adults and Asians were 80% and 84%, respectively. Since 2017, the financial difference between white and black and Latino adults has increased by four percentage points.
Well-educated Americans are more likely to be those whose income and bank balance increased last year, while those with a high school education or less are more likely to be accounted for by those whose income and bank balance have decreased.
Employment status is also very important. Those who stayed at work during the pandemic tended to have stable or improved financial conditions last year, while layoffs or long-term unemployed people (they tend to be Americans who did not have sufficient financial resources before the pandemic) saw their financial situation. Health conditions will deteriorate in 2020.
Among the laid-off workers, about 45% were either unable to pay their bills in November last year or were hit by an unforeseen fee of $400. According to the report, among Americans in this category, African American and Latino workers and workers with a high school degree or below are “significantly higher.”
Federal Reserve Executive Michelle W Bowman said in a press release: “Even if the economy improves, we can certainly see that some people are still struggling, especially those who are unemployed and less educated. People, many of them are behind.” On the Federal Reserve’s website.
The increased demand for childcare caused by the closure of remote schools and daycare centers directly affects the fate of Americans.
Approximately 22% of parents reported that they were either out of work or reduced in workload due to the COVID-19 disruption. This group is more likely to include African Americans, Latino and single mothers, and low-income mothers.
A harbinger of more discrepancies is that about 59% of parents with children in grades K-12 say that their children do not learn through distance education as well as they do in-person classes.
The report draws on the Federal Reserve’s eighth annual Household Economics and Decision-Making Survey (SHED), which surveyed 11,000 adults in November last year (about 8 months after the pandemic).
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