A staggering 80% of American households are financially worse off than they were before COVID-19
A staggering 80% of American households are financially worse off than they were before COVID-19
Only the richest 20% have held onto their COVID savings.
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Uh how is it not higher?
Who are these 20%ers?
I think some people, myself included, managed to stay stable, so that's probably a big chunk of it. I got a new job in June 2020 that was enough of a raise to make up for inflation, so while I'm not ahead of where I was 3 years ago, I was at least in the same mediocre position I started in. That said, I've had $3k in dental bills since July because dental insurance is pretty much a scam, soooo I'm now officially fucked, but I was doing ok.
I hate to break it to you, but if $3,000 in bills is enough to fuck you, you were never as stable as you thought. Welcome to the 80%
I said I'm not worse off, not that I'm doing well. Stable meant I was basically in the same position at the end of the pandemic as was at the start.
People like me and my wife. Wife is in healthcare and I am in automation. Wife gets as much overtime as she wants and I got several pay raises as suddenly companies found that they couldn't depend on just buying the same things forever and ran out of workers.
Oh don't worry I am sure the boot is ready to crush us both like a bug. Just ignoring us for the time being.
I may be a 1%er in this context. 49 at the start, had just scored a job paying double salary and benefits both (<-worked hard for this bit, for many years), Habitat for Humanity mortgage (no interest or land taxes), all that.
COVID killed mom (grandma really), got some inheritance, bought a couple of acres of swamp. It's mine and I play there every weekend. Long story, but the land is a big deal in my life.
Went nuts buying stuff I always wanted and couldn't afford before inflation really set in. I wouldn't/couldn't buy most of that stuff at these prices.
And now I'm about to get paid on the last of the inheritance and pay my little house off.
I know this sort of comment isn't welcome, but you asked. Dumb luck mostly, and I recognize that.
And speaking of dumb luck, I'm getting married in 2-weeks to the finest woman I've ever met. (OK. I made a LOT of effort, but still, lots of luck as well) Been with a lot of women, so I've failed a lot, not this time. She's gushing to her Filipina friends ATM. I don't speak Tagalog or I might relate a bit of the conversation, all sounds good though. (Nothing private of course.)
Glad things are going well for you. Best of luck.
Comment is welcome! Don't forget the prenup. Congrats!!
A lot of us in healthcare stayed pretty stable. I don't know of any that did "better", but other than elective stuff, day to day dropped only a little. About 9-10% of Americans are in healthcare. I do know a lot of delivery services did well too.
And we now have the career experience from working Covid front lines combined with the aftermath of the Great Resignation, making us even more in demand. Yeah, I'm also one of the few doing better financially after Covid than before.
So my wife and I are one of them. I'll call it as it is, we got lucky, and both work in tech.
Now that said, I "rent" (rent in quotes because the amount is almost exactly what the increase in food costs was) out a room to a good friend because she was struggling, and just last week got another friend couch surfing for who knows how long until she can get her feet under her.
Who are these 20%ers?
LOL, which income quintile do you think?
Well, I currently make more than the average household in my state, solo. So does my gf.
And we can't afford shit.
So, you tell me? I'm in the top 5% of income in my state. I am doing way worse than I was in 2019. E erything cost double and I dont make double.
What costs double? I track my expenses very closely and have for about a decade and my essentials are up 10% at most, 7% on average. That's food, transportation, home expenses and cloth. My recreation expenses were actually down or flat.
I feel like sit down restaurants and fast food have gone way up. Maybe not double but it feels like it. Rent is also way up. Again not double but it seems that way. Maybe that's just my area in South Florida though.
But yeah if you own your own home and cook all of your meals at home, really this inflation hasn't hit you as hard.
I'm in a similar situation up here in Canada. Back then I could afford a house at a reasonable distance from town, even at current interest rates and with my significantly lower salary. Now I can maybe look at a small bungalow 1h out or more... if I assume I can keep working remotely indefinitely. Groceries just skyrocketed. Had to move in between, with high interest and low vacancy rates, we had to eat a big rent hike despite us moving way out of town.
From the article, emphasis added:
The poorest 40% of households suffered an 8% drop in cash savings and the middle 40% (the U.S. middle class) also saw their bank deposits and other liquid assets topple. Only the wealthiest 20% of households are still enjoying the extra cash they stockpiled during the pandemic, with their savings about 8% above where they were in March 2020.
I'm not disbelieving your personal experience, but the article does indeed say it's the top quintile who benefited.
The poorest 40% of households have cash savings?
What the fuck are my wife and I doing wrong?
Well if your income increased more than inflation you might be fine. For my family this was the case and we have a fixed income mortgage as well so our expenses as a whole have gone up a lot less than inflation. I think this is true for a substantial minority of people.
Spending an extra 8% on groceries just means a bit less to savings? IDK, I kind of feel like the opposite. Economic dooming ahead of an election is as natural as the sunrise, especially when there's a Democrat in office.
My wife and I also probably fall into this. We're both mid-career professionals in separate fields - we have good, solid jobs, that pay reasonably well. We're in a city, but not a crazy expensive one. Between promotions and merit increases, our combined income is up around $40k annually since pre-covid, and our expenses are actually significantly down, though some of that is due to lucky timing - we paid off two car loans over the last couple years and have not made new purchases -this freed up about $1700/mo (nice cars and we were shooting for an aggressive payoff schedule). I found a different Internet provider that is saving us $230/mo compared to what I was paying per month (I like fast, unlimited Internet and also gave up cable without replacing it with streaming services). Since we already owned a home and haven't moved, our housing costs are nearly unchanged, apart from marginal increases in property tax and insurance due to the higher assessed value of our home. We also almost completely have stopped eating out at restaurants since COVID and now cook nearly everything from home, often from scratch. I started gardening and baking and kept up with the whole sourdough thing, so our food costs are well down from pre-covid, probably by $200 per month or so in spite of the cost of individual items increasing. We stopped going out to concerts and performances and our only travel has been camping, as opposed to annual international vacations that we were doing before, so there's another significant savings there. Due to our reduced travel, and reduced mobile data usage I changed our cellphone plan to one that is saving us around another $75/mo. I took a WFH job about a year after COVID, so my lack of commuting offsets the extra cost of fuel that my wife is burning. About the only category that is significantly increased is the cost of energy for our house, but that is probably averaging out to an additional $150/mo, so is well offset by the above. We had our HVAC die to the tune of $26k, closely followed by a water heater failure with some damage to the house and some things, but paid off those expenses in less than a year. I've been heavily investing the vast majority of the excess, so our retirement and liquid savings/investment is in substantially better shape than it was prior to COVID.
Clearly a lot of luck and fortuitous timing here, but I think boomers (and older), Gen x, and probably older millennials all have had a decent shot at making it through this pretty well, provided they were already homeowners. Basically, this has ended up widening the gap between socioeconomic classes. People who were already fucked got extra fucked, and people who were already fucking lucky might have gotten extra fucking lucky.