What Has Been the Overall Financial Toll of COVID-19?

What Has Been the Overall Financial Toll of COVID-19?

Steve Goodman

With vaccines in full swing, the economy is showing slow but steady signs of improvement. However, the overall financial toll of the coronavirus pandemic has still been devastating to the United States.

It could be said that simply surviving the coronavirus is a win, and millions and millions of Americans have. Beyond living through the pandemic, there is also a vast number of Americans who have weathered the pandemic well and have come through it with not only their health but their finances relatively intact. However, for millions more, sadly, that is not the case. According to a recent study, about 38 million Americans say they are worse off now than they were before the outbreak began in the United States.

Overall, 55 percent of Americans say their financial circumstances are about the same now as a year ago, and 30 percent say their finances have improved, according to a new poll from Impact Genome and The Associated Press-NORC Center for Public Affairs Research. However, about 15 percent of respondents say their personal finances are worse off than they were at the start of the pandemic.

The problem is more pronounced at lower income levels: 29 percent of Americans living below the federal poverty line say their personal finances worsened in the past year. Roughly that many also find themselves in a deepening financial hole, saying they struggled to pay bills in the past three months.

The pandemic has taken a major toll on what was a burgeoning economy before it hit. The US still has 8.4 million fewer jobs than it had in February 2020, just before COVID-19 struck. Three major stimulus relief bills that provided direct payments have helped to ease the suffering for many.

The most recent of which — $1,400 to individuals — were sent out beginning last month. Households, on average, are using, or plan to use, about one-third of the money to pay down debt, about 25 percent on spending, and the rest for savings, according to a report released last week by the New York Federal Reserve. That closely mirrored spending of prior relief payments.

Overall, the Impact Genome/AP-NORC poll found 52% of Americans say they were able to save money for most of the past three months, while 37 percent broke even and 10 percent were short on paying bills. Again the numbers were worse and more telling for lower-income families. Among Americans living below the poverty line, 29 percent say they struggled to pay bills recently, while just 16 percent have saved.

By comparison, 61 percent of those living far above the poverty line say they have been able to save.

There also are wide racial disparities, with 57 percent of white Americans, 47 percent of Hispanics, and just 39 percent of African Americans saying they have saved recently. Black and Hispanic Americans are about twice as likely as white Americans to say they have come up short on bill payments.

The poll also found that a good many Americans — nearly a third — had not had investment or similar long-term savings accounts set up even before the pandemic. Another 19 percent say they have been able to add more to investments like a 401(k) or a college savings plan, and 38 percent say the amount hasn’t changed compared to last year.

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