There’s no question that the pandemic has taken a financial toll on the lives of tens of millions of Americans — but how dire these circumstances are have been a bit mired in the dividing wealth gap between those hardest hit by the pandemic and those that have only been minimally impacted (or not impacted at all).
But a recent study from the highly reputable Pew Research Center is putting the strain that millions of families have felt and still continue to feel into the proper context. Specifically, the study, which polled more than 10,000 Americans in January, found that about one out of every 10 Americans believe they’ll never be able to recover to pre-pandemic financial levels. About half of all working Americans say that the economic fallout from the pandemic has forced them to reassess their long-term financial goals.
It’s a big wake-up call that while things are improving and there’s some real reason for optimism, this pandemic has not come without some significant pain. Let’s take a look at some of the long-term ramifications that have resulted from the COVID-19 pandemic, now that we’re one year into it.
Three Years to Get Back to Pre-Pandemic Levels
As you might recall, prior to the pandemic hitting, things were very good in the United States from an economic perspective. Unemployment was low, earnings were high and the stock market was ticking. That all changed when cases of COVID-19 began surging across the United States, and millions were laid off or furloughed from their jobs in hard-hit industries, like travel, hospitality, and restaurants. Per the Pew Research Center, about 45 percent of all those surveyed believed it will take them at least 3 years to return to pre-pandemic financial levels.
Inside the K-Shaped Recovery
Economists agree that the current economic recovery is K-shaped, which is characterized by certain parts of the economy resuming growth while other parts of it lag behind. As you might expect, the workers in the parts of the economy that are seeing continued growth continue to excel while those in the struggling industries don’t. This has also helped lead to the widening wealth gap, with wealthy Americans continuing to build their wealth while others continue to face setback after setback. Those struggling financially are often forced to put off paying certain bills. Even if people are able to make ends meet on bills, they may have to take on debt, which they’ll have to manage in the future.
Inside the Struggle
As we’ve noted throughout this article, the pandemic hasn’t been bad news for everyone. In fact, about 86 percent of upper-income adults said their finances are in good shape. About 60 percent of adults with a college degree say the same. But the struggle is real for lower-income adults, notably minorities, a majority of which report their finances are either fair or poor.