Income Differences in Serious Financial Burdens Facing U.S. Households during Covid-19

Abstract

Nearly two years into the Covid-19 pandemic, America’s economic recovery remains unequal. The authors find that low- and moderate-income households continue to suffer financially. In a new survey examining serious problems facing U.S. households during the delta variant outbreak, four key differences among the experiences of households by income level (<$50,000/year, $50,000–$99,999/year, or $100,000+/year) are discussed, as well as their implications for the future. First, despite trillions of dollars appropriated by federal and state governments during the Covid-19 outbreak to protect vulnerable Americans and a majority of American households reporting they have received financial assistance from the federal government in the past few months, 59% of U.S. households earning below $50,000 a year still report facing serious financial problems, while fewer than one in four households earning $50,000+/year report this. Second, the housing crisis among renters is likely to worsen in the near-term, as 34% of renters earning below $50,000/year report serious problems paying rent, compared to fewer than 10% of those earning $50,000+. This includes large shares of renters earning below $50,000 in the four largest U.S. cities (59% of Houston renters, 51% of Chicago renters, 44% of Los Angeles renters, and 44% of New York City renters). Third, problems for many lower-income households are likely to endure over time, as 30% of households earning <$50,000 lost all of their household savings during the Covid-19 pandemic and have no savings to fall back on. Fourth, these problems may extend intergenerationally, as 72% of households with children earning <$50,000 report facing serious financial problems, and 49% of these households report their children have fallen behind in school a lot during the Covid-19 pandemic, compared with one-third or fewer households with children earning $50,000+ who report these problems. This study was conducted by researchers at the Harvard T.H. Chan School of Public Health, using a 2021 poll by Harvard, National Public Radio, and the Robert Wood Johnson Foundation.