The pandemic’s impact on consumers’ finances varies among income brackets. But it doesn’t fit the narrative of a blue-collar recession that leaves upper-income groups unscathed—and there was already financial fragility across brackets pre-pandemic.
How big are the disparities in income?
Huge, and not just when comparing top vs. bottom brackets. Households in the bottom income quintile make barely one-third as much as those in the next-to-bottom quintile. Those in the top income quintile have more earners than average, so it’s typically not a matter of one person in the household getting a lavish salary.
Have lower-income households been hit hardest by the recession?
Yes, especially since they’ve been most vulnerable to losing jobs. One survey showed more than one-third of low-income households experiencing layoffs. But there has been financial damage in upper brackets, too. Another survey showed more than four in 10 at the $100,000-plus level losing income, including 10% who lost it entirely. It doesn’t help that people at all income levels went into the pandemic with inadequate emergency savings.
How do consumers’ attitudes about their finances vary along income lines?
Less than their actual finances do. There’s more confidence among lower-income consumers and more anxiety among their upper-income counterparts than one might expect. In general, though, there’s more worry among the former than the latter.
How has the pandemic affected spending by different income groups?
Typically making the most discretionary purchases, upper-income consumers have made the biggest spending cuts. Consumers across income brackets have put major purchases on hold.
WHAT’S IN THIS REPORT? This report assesses the financial strength of households in different income brackets and the varying degrees of damage suffered during the pandemic. It also examines differences and similarities in how the crisis is affecting shopping behaviors of consumers with different incomes.
KEY STAT: Consumers across income brackets have postponed major purchases during the pandemic, and many look forward to making those purchases “once things return to normal.”
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