One year into the COVID-19 global pandemic, new data from the U.S. Financial Health Pulse shows that Black and Latinx communities are continuing to disproportionately struggle amidst the ongoing public health crisis, and that financial health disparities appear to be widening by race and ethnicity as a result of the ongoing pandemic.
New nationally representative survey data collected in January shows that Black and Latinx Americans are continuing to bear the brunt of the ongoing COVID-19 pandemic. Nearly a quarter of Black respondents (23 percent) and more than 1 in 5 Latinx respondents (22 percent) said they were worried their food supply would run out since the pandemic began in March of last year, compared with 12 percent of white respondents and 15 percent of Asian American respondents.
To cope with these challenges, Black and Latinx respondents were more likely than white and Asian American respondents to say they visited a food bank within the past year. These figures have not changed much since August 2020, suggesting recent stimulus and relief measures have not eased the financial strain on Black and Latinx communities.
Black and Latinx respondents were also more likely to say they were worried about paying their rent or mortgage since the pandemic began: 29 percent of Black respondents and 27 percent of Latinx respondents reported this, compared with 14 percent of White respondents and 15 percent of Asian American respondents.
While the Biden administration’s extension of the eviction and foreclosure moratorium may provide a temporary reprieve, Black and Latinx respondents were more likely than white and Asian American respondents to say they were worried that they would be evicted in the next three months. These figures have decreased slightly since August, however, without additional assistance and protections, millions of Black and Latinx Americans are at risk of losing their homes in the coming months.
Exacerbating financial health disparities
As concerning as these findings are, more alarming is that financial health disparities appear to be widening across race and ethnicity. The average financial health of white, Asian American, and Latinx respondents has improved since 2019, while it did not change significantly for Black respondents, further suggesting that Black Americans have not benefited as much from recent COVID-19 stimulus and relief measures.
For example, as of August, Black borrowers were much less likely to receive debt relief on student loans, mortgages, credit cards, and auto loans than others. Among borrowers who applied for debt relief since March 2020, less than two-thirds of Black applicants (61 percent) said they received that relief, compared with 73 percent of Latinx and 76 percent of white applicants. These outcomes are partially the result of decades of discriminatory lending, employment, and housing practices that have denied Black Americans equal access to affordable credit and high-quality financial services.
Compounding these challenges is the fact that Black Americans are more likely to be on the frontlines of the pandemic, serving as essential workers (in industries such as healthcare, childcare, and retail) and are less likely to be able to work from home. Black women also face the highest unemployment rate due to their representation in industries hardest hit by the pandemic, as well as childcare burdens, which are disproportionately falling on their shoulders.
A legacy of discriminatory healthcare policies and the persistently high costs of health insurance have put Black Americans at higher risk of falling severely ill or dying from COVID-19, which can take a profound financial, as well as emotional, toll on surviving family members.
Bold solutions needed
While the COVID-19 crisis has upended the lives and livelihoods of millions of Americans, it has also provided a unique moment where real opportunity to address financial health disparities seems possible. Doing so will require stakeholders across the financial health ecosystem — including policymakers, businesses, and employers — to embrace bold solutions that provide people with immediate relief, particularly Black and Latinx Americans, who are struggling the most. It will also require decision-makers to understand the needs of diverse communities in order to build better solutions that achieve equitable financial health outcomes for all.
Study Methodology: The data cited in this article come from two surveys fielded to USC’s online consumer panel, the Understanding America Study. The most recent of these surveys was fielded January 11-18, 2021, with a sample size of 4,404 respondents. The prior survey was fielded from July 29 to August 9, 2020, with a sample size of 6,430 respondents. Both data sets have been weighted to be nationally representative.
The Financial Health Pulse is made possible through a three-year funding partnership with the Citi Foundation. Since the inception of the initiative in 2018, the Financial Health Network has partnered with USC’s Dornsife Center for Economic and Social Research (CESR) to field the study to their online panel, the Understanding America Study. Study participants who agree to share their transactional and account data use Plaid’s data connectivity services to authorize their data for analysis.