NEW YORK – July 9, 2020 – Among U.S. adults, 49% have seen a
negative impact on their income due to the coronavirus outbreak, most commonly
through a layoff, furlough, or a reduction in hours according to a new survey
by Bankrate.com. Not being able to operate their business, as usual, a pay cut
or something else was also cited as reasons for experiencing an income
reduction.
Of those that have seen a negative impact to income from the
pandemic, just 17% say it is already back to normal. 42% expect their income to
return to normal within the next 6 months, while 37% say it will take 6 months
or more and 4% say it will never recover. In all, 59% of those suffering an
income reduction from the pandemic expect it will take longer than 3 months to
recover, including the 4% that say it will never recover.
Worries about another coronavirus outbreak negatively
impacting household income are significantly higher for those that have already
suffered an income reduction – 92% – compared to 62% among those that have not.
“The widespread hit to household income from the pandemic,
the length of time for that income to recover, and a pervasive fear of it
happening again will all weigh on the economic recovery,” says Greg McBride,
CFA, Chief Financial Analyst for Bankrate. “Lower-income and worries about
lower-income have a direct effect on consumer spending.”
Those having experienced a reduction in household income due
to the pandemic skews higher among Generation Z (ages 18-23), millennials (ages
24-39), and Generation X (ages 40-55), all of which saw more than half of
households negatively affected. Surprisingly, there was only slight variation
among income groups, ranging from 48% among households with income below
$30,000 to 53% among households with an income of $80,000 and above.
Of those already seeing their income return to normal, there
is little difference among ages. However, younger workers that have experienced
an income reduction expect the rebound will come more quickly. 55% of
Generation Z and half of millennials felt their incomes would return to normal
within 6 months, compared to 37% among Generation X and just one-third (33%) of
baby boomers (ages 56-74). While just 15% of millennials said it would take
longer than one year for income to return to normal, 27% of baby boomers said
so. The percentage of those not expecting income to ever recover was similar
among age groups– 2% for Gen Z, 3% for millennials, and 4% for Gen X and baby
boomers.
“Seeking payment relief from creditors and reducing
household expenses wherever possible are steps households can take to weather a
period of income reduction,” added McBride.
Approximately one-in-five households with income of $50,000
or more that had a pay reduction report it has already returned to normal (19%
among those earning $50,000-$79,999 and 20% for households earning $80,000 or
more). This compares to one-in-six (16%) for those earning $30,000-$49,999 and
one-in-eight (12%) of those earning less than $30,000 annually.
Methodology: Bankrate.com commissioned YouGov Plc to conduct
the survey. All figures, unless otherwise stated, are from YouGov Plc. Total
sample size was 3,753 adults. Fieldwork was undertaken on June 18-23, 2020. The
survey was carried out online and meets rigorous quality standards. It employed
a non-probability-based sample using both quotas upfront during collection and
then a weighting scheme on the back end designed and proven to provide
nationally representative results.
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