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Federal Reserve Survey Finds Persistent Inequalities in April 2020

The Board of Governors of the Federal Reserve System released its “Report on the Economic Well-Being of U.S. Households in 2019, Featuring Supplemental Data from April 2020.” The report finds that even before the onset of COVID-19, 25% of adults struggled financially, and 37% of adults would not be able to pay for an unexpected $400 expense with cash or a credit card paid off at the end of the month. The April 2020 follow-up survey found 18% of adults did not expect to be able to pay April bills in full.

The report is drawn from the 2019 Survey of Household Economics and Decision-making (SHED), along with a follow-up survey conducted in April 2020. The 2019 SHED survey, conducted in October 2019, included 12,238 online participants and was designed as a nationally representative sample of adults over age 18. The SHED survey asked respondents about their current financial situation, income, employment, banking and credit, living arrangements, educational history, education debt, retirement savings, and plans for dealing with unexpected expenses. The April 2020 supplemental survey, which had 1,030 participants, asked about financial repercussions from COVID-19, particularly whether the outbreak had affected their employment or family finances.

The SHED survey found little change in overall well-being between 2018 and 2019. In both years, 75% of adults reported they were financially comfortable, a substantial improvement over the 62% of who reported they were financially comfortable in 2013. At the same time, differences in financial well-being across racial and ethnic groups persisted or widened in 2019. Whereas 79% of white adults reported being financially comfortable, only 66% of Hispanic respondents and 65% of Black respondents said as much. The survey also found differences in financial well-being by sexual orientation: 77% of heterosexual respondents reported they were “doing okay” financially, compared to 64% of gay, lesbian, or bisexual respondents. Only 55% of respondents with less than $40,000 in family income reported doing okay, compared to 81% of respondents with family income of $40,000 to $100,000.

The survey found substantial racial disparities in homeownership: 71% of white adults were homeowners, compared to 50% of Hispanic adults and 48% of Black adults. Respondents who were renters were asked for their reasons for renting: 62% said they were unable to afford a down payment, 41% said they were unable to quality for a mortgage. Others cited reasons the authors classify as a preference for renting: 55% said it was cheaper to rent, 52% said it was more convenient, and 50% said that owning was a bigger financial risk. While 87% of all respondents were satisfied with their housing and 90% were satisfied with their neighborhoods, renters were less satisfied than owners with every aspect of their housing.

The April follow-up survey asked respondents whether their employment or family finances had been affected by COVID-19 between March 1 and when they took the survey (April 3-6). In that time period, 19% of adults lost a job, were furloughed, or had hours reduced. Nearly a quarter of adults said their income in March was lower than in February. Jobs losses were largest among low-income workers: 39% of people with less than $40,000 in family income lost a job. Among all respondents who lost a job, nine in ten said their employer indicated they would return to the job at some point. Workers able to work from home were more likely to be college graduates: 63% of workers with at least a bachelor’s degree worked entirely from home, compared to 20% of workers with a high school degree or less. While 81% of adults said they could pay their bills in full in April, essentially unchanged from the fourth quarter of 2019, there were far greater rates of difficulty among those experiencing employment disruptions. Only 64% of adults who lost a job or hours expected to be able to pay their bills in full.

The full report can be accessed here: