Financial Insecurity: Coping with COVID's Financial Impact

We’re now more than a year into the Coronavirus pandemic, and there’s no shortage of news reports about its financial impact on American households. But a new Washington Post-ABC News poll reveals women and people of color are finding it particularly hard to recover. A quarter of respondents say they are worse off today than before the pandemic began, and many cite struggles with job loss, child care, and rising cost of living.

These struggles are not unique to women and non-whites, but reporting was stronger among those two groups. 25% of women and 27% of non-white Americans report that their families are financially worse off since the pandemic began. Meanwhile, 18% of men and white Americans report being worse off.

Caregiving

One of the key factors impacting women when it comes to their financial security involves caregiving. Women are often the defacto providers of child and elder care. Here are some fast facts from a Northwestern University study on the subject of gender differences in caregiving.

• 70-80% of older adults are cared for at home by family.
• 57-81% of caregivers are women.
• Most female caregivers are wives or adult daughters, middle-aged, and a substantial number of them are over the age of 65.
• Female caregivers have higher levels of depressive and anxiety symptoms and lower life satisfaction.
• Women have higher level of stressors with fewer social resources, and they report lower levels of psychological and physical health.
• More women work outside the home.

Even before the pandemic, women felt what Northwestern’s report described as a “complex mix of expectation and obligation” to serve as caregivers. When the pandemic hit, schools closed, and nursing homes became hot spots for COVID-19. As a result, many women stayed home to care for their loved ones. Numerous women interviewed by the Washington Post said caring for loved ones forced them to leave the workforce or take lower-paying jobs with greater flexibility.

There are support options available to caregivers. Here are some federal options:

• National Institute on Aging
• National Institute of Health
• National Cancer Institute
• Consumer Financial Protection Bureau
• VA Caregiver Support Line
• Office of Women’s Health

And to find state and local caregiver support resources, visit the Administration for Community Living website, which is managed by the Department of Health and Human Services.

Job Loss

Job loss is another big factor in the financial insecurity experienced by women and people of color, who were disproportionately affected. The service sector was among the hardest hit by the pandemic, eliminating jobs in restaurants, hotels, spas, and salons. More than 2.3 million women have left the workforce since February 2020, according to the National Women’s Law Center (NWLC), marking a 33-year low. (Nearly 1.8 million men have left the labor force in the past year.) In December alone, women accounted for 100% of the jobs lost.

The unemployment rate is especially high for Black women, Latinas, and women with disabilities, according to research from NWLC.

• More than 1 in 12 Black women ages 20 and over were unemployed in January.
• Nearly 1 in 11 Latinas ages 20 and over were unemployed in January.
• And more than 1 in 9 women with disabilities were unemployed in January.
• By comparison, the unemployment rate for white men ages 20 and over was 5.5% in January.

If you’ve lost your job, here are some tips for getting back on your feet:

• Contact the Indiana Department of Workforce Development to apply for unemployment insurance benefits. Additionally, DWD wrote a guest blog post for us that you should read.
• Make a budget and look for expenses you may be able to eliminate.
• Consider your health care options by visiting HealthCare.gov.
• Contact your creditors and see if they are willing to discuss adjustments to your payment plan.
• Order a free copy of your credit report.
• Be wary of job scams. Unfortunately, there are a lot of them right now. We’ve previously written about work-from-home scams.

Preparing for the Unexpected

Finally, while the financial fallout caused by the Coronavirus pandemic is something few of us could have fully prepared for, it is important to make a rainy-day plan. Everyone needs an emergency fund because everyone encounters emergencies. Emergencies typically include broken appliances, ER visits, and car accidents. But just 39% of Americans say they have enough money in savings to cover an unexpected $1,000 expense. If you want to avoid using a credit card to cover such expenses, start building an emergency fund. We have details for how to get started on the Preparing for the Unexpected page of IndianaMoneyWise.com.