The Federal Reserve Board released “Economic Well-Being of U.S. Households in 2020,” which summarizes findings from the annual Survey of Household Economics and Decision-making (SHED). This survey of more than 11,000 adults provides evidence that economic hardships in 2020 were unevenly distributed. Twenty-four percent of adults were worse off financially in 2020 than in 2019, and disparities in financial well-being by race, ethnicity, and educational attainment increased. While the overall share of adults who could withstand a $400 emergency expense was similar to pre-pandemic levels, among people who were laid off, 45% were unable to pay their bills or could not withstand an emergency expense.
The SHED has been conducted annually in the fourth quarter of each year since 2013 (see Memo, 5/26/20 for discussion of the 2019 survey and a supplemental survey from April 2020). The online survey includes a nationally representative sample of 11,648 adults over age 18. About a third of respondents in 2020 also participated in the 2019 survey. Respondents are asked about their overall financial well-being, income, employment, their ability to handle emergency expenses, and living arrangements, among other things.
In 2020, 25% of adults reported they were either “just getting by” or “finding it difficult to get by,” which is unchanged from the 2019 survey. This stability, however, masks the significant financial impact of the pandemic on many households. People who kept their jobs, especially those who could work from home, saw financial improvements, while those who were laid off in 2020—a population already less likely to have a sufficient financial cushion in 2019— saw a considerable decline in financial well-being. Those who were laid off in 2020 were already less likely to report being “financially okay” in 2019 than those who were not laid off in 2020. This illustrates that many job losses in 2020 were concentrated among low-wage workers. The share of Black and Latino adults doing at least okay financially fell. It also fell for adults with less than a high school degree. Black and Latino adults and adults with less education were also more likely to have been laid off.
The overall share of adults able to withstand small financial emergencies, as measured by their ability to pay a $400 emergency expense using cash or its equivalent, was relatively unchanged: 63% in late 2019 and 64% in late 2020. A supplemental survey conducted in July 2020 found a substantially higher share (70%) could handle an emergency expense, which the authors indicate could have been the result of relief programs temporarily increasing household savings.
Three percent of renters who moved in the last two years did so because of an eviction or threat of eviction. This represents about three million adults. The share moving due to an eviction or eviction-related threats in 2020 was essentially the same as in 2019, despite the eviction moratoriums in place in 2020. Renters with children and Latino renters were more likely to have been evicted or threatened with an eviction. Among renters facing challenges paying their bills, 36% said they would not have anywhere to go if they had to move out because they could not make rent payments.
The report is at: https://bit.ly/2Qt8fsF
Interactive charts and appendices can be found at: https://bit.ly/3ymDQNZ