Capital One study highlights uneven impact of COVID

MCLEAN, Virginia, September 28, 2021 / PRNewswire / –

  • Employees from all walks of life have sometimes had difficulties throughout the pandemic with their financial health.
    • While average employees (who earn between $ 25,000$ 100,000 annually), fared better than low-income earners (who earn less than $ 25,000 annually), they are still in difficulty. As recently as August 2021, one in five people say they have trouble paying their bills.
  • Unemployment is an essential measure but does not give the complete picture. Underemployment may have been a more prevalent problem during the pandemic.
    • Almost a third of average employees say they are underemployed at some point in the pandemic.
    • On top of that, nearly half of black and Hispanic / Latin workers, who are more heavily represented in industries hardest hit by the pandemic, report being underemployed at some point during the pandemic.
  • Despite great concerns over the past 18+ months, optimism is on the rise.
    • About 30% of Americans expect their savings to grow over the next three months.

Released today, an ongoing nationally representative study of more than 6,000 Americans highlights how consumers think, feel and believe they behave in response to the financial impact of COVID-19 . The study is the first release of Capital One’s new Insights Center.

Since april 2020, the Capital One Insights Center conducted surveys every four to eight weeks with a group of nationally representative U.S. consumers. The results highlight the uneven recovery in financial health and well-being, consumer sentiment and prospects, employment, and the impact of government stimulus and public assistance programs on those most affected. most affected.

The road to recovery for Americans

The results suggest that the current reality for most Americans is sharply divided: a robust recovery for higher incomes (who earn more than $ 100,000 annually), a less secure base for those who are in the middle and significant financial stress for low incomes. The results also reflect the consumer’s current economic outlook, with survey responses captured as recently as August 2021 (Wave 14 of the study).

According to Marguerite Donnell, Senior Vice President, Consumer Intelligence – Business Strategy, and Index Principal Investigator, “understanding the impact of the pandemic across the country – with an additional look at the differentiated effects on groups underrepresented – the goal of the Market Index is ultimately to provide actionable information to decision makers in designing resilient recovery efforts. ”

The main results of the study include:

  • Low-income people have experienced a disproportionate degree of financial distress. While income and job losses have been significant across all income groups, the recovery has been much slower for lower income groups.
    • Income loss among Americans was widespread in the spring of 2020; 32% -36% of all Americans said their income had disappeared or declined. Yet a year later, when low wages had seen relatively little improvement, the share of middle and top earners reporting lost income had been halved.
    • Unlike middle- and upper-income earners, low-income earners felt somewhat less secure in their jobs by August 2021 (55%) than at the start of the pandemic (61%).
    • For low incomes, evictions and other financial worries continue to pile up: a quarter of low incomes have missed a payment or paid their rent at the end of August 2021, and 13% feared being deported despite government moratoriums on evictions.
    • Through August 202140% of low-income people in dual-income households reported that someone had lost their job, almost three times the rate of higher-income people. Only 14% of households earning more than $ 100,000 every year had lost a livelihood.
  • Many average employees are still in difficulty: While middle incomes fared better than lower incomes, they were not without stress and difficulties. A small group was clearly in trouble.
    • About one in five had more debt in the spring of 2021 than before the pandemic, and they still struggled to pay their bills in August 2021. High incomes ($ 100,000 or more), on the other hand, were able to save money and reported few difficulties, although concerns about student loans and medical bills rose from August 2021.
  • Underemployment was widespread, especially among Hispanic / Latin and black workers. Americans were working, but many were underemployed, especially Hispanic / Latin and Black workers, whose overrepresentation in jobs closed by the pandemic, such as retail and restaurants, put them at greater risk.
    • Black and Hispanic / Latinx workers were 12 percentage points more likely than white workers (46% vs. 34%) to report being underemployed at some point during the pandemic.
  • The lack of child care has blocked many women, especially low-income women. As schools and daycares closed, parents struggled to juggle the new demands for care.
    • In August 2021, 50% of low-income earners and 30% of middle-income earners always reduced their working hours or had stopped working altogether because they had children at home and likely lacked outside child care. Only 18% of those who earn more than $ 100,000 had done.
    • Almost half (48%) of women $ 50,000 or fewer had to cut back or stop working compared to only a third of men who earn $ 50,000 or less.
  • Feelings about financial health vary widely by income and gender.
    • While the rates of feeling “financial illness” have halved for top earners from the early months of the pandemic until now (August 2021), the sentiment of low-income people remains unchanged, with 44% reporting feeling in poor financial health now compared to 42% at the start of the pandemic.
    • Women’s sense of financial health has also deteriorated more over time than men’s. Among those who win $ 50,000 or less, 39% reported feeling in poor financial health, compared to 31% in april 2020 compared to August 2021. On the other hand, men earning the same salary annually had a positive trend: in August 2021, 29% reported feeling in poor financial health, compared to 42% in april 2020, an improvement of 13 points compared to a decrease of 8 points for women.
  • But optimism about their household’s savings capacity is growing:
    • Around 30% of respondents expect to save more in the next three months, compared to only 12% who think they will save less.
    • While this trend is stronger for high incomes, 26% of low incomes plan to increase their savings over the next three months, compared to 19% who expect it to decrease.

Additional results can be found here in the Capital One Marketplace Index: Towards the recovery research paper.

Launch of the Capital One Insights Center

Building on our commitment to advancing socio-economic mobility, Capital One launched the first phase of the Capital One Insights Center this fall. The Capital One Marketplace Index: Towards the recovery is the Centre’s first published study. Combining the best of Capital One’s research and partnerships, the Center will generate ideas to help advance equity and inclusion.

The Center strives to help change agents create an inclusive society, build thriving communities and develop financial tools that enrich life. In the months and years to come, we expect the Center to leverage Capital One’s deep market expertise and legacy to revolutionize the credit system through the application of data, information and technology.

“Capital One is a mission-driven company that was founded on the belief that no one should be left out of the financial system,” says Andy Navarrete, Executive Vice President, Head of External Affairs at Capital One. “The launch of the Capital One Insights Center builds on our impact initiative which was launched in fall 2020 as the first $ 200 million, five-year commitment to support growth in underserved communities. The Center draws on our deep analytical expertise to serve as a nascent data and dialogue platform, bringing together thought leaders and change agents to fill gaps in equity and opportunity. “

Learn more about the Capital One Marketplace Index: Towards the recovery and Information Center here.

About Capital One
Capital One Financial Corporation is headquartered in McLean, Virginia. Its subsidiaries, Capital One, NA and Capital One Bank (United States), NA, provide a wide variety of financial products and services to consumers, small businesses and business customers. We apply the same principles of innovation, collaboration and empowerment in our engagement with our communities across the country as we do in our business. We recognize that helping build strong, healthy communities – great places to work, great places to do business, and great places to raise families – benefits all of us and we are proud to support this initiative and to other community initiatives.

Visit the Capital One press room to learn more News from Capital One.

Media contacts:
Liz anderson, Director, Corporate Communications
[email protected]
Angela Solomon, Senior Director, Corporate Communications
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Ashley richardson, Business communication
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