- A new Harris Poll commissioned by BPC’s Funding Our Future coalition and DailyPay shows that 90% of Americans find managing their finances stressful, with 65% anxious about their current financial situation.
- Black workers’ financial situation is particularly precarious—66% report not always having enough cash on hand to pay their bills, compared to only 44% of white workers.
- Despite this, Black workers are taking active steps to shore up their finances at notably higher rates than other racial groups and report strikingly positive feelings about their current financial situation and the broader economic outlook.
- Overall, many Americans remain in bad financial straits, highlighting the need for policymakers to advance prudent economic policies that expand opportunity and financial security.
Despite economic forecasters’ brightening expectations, a recent survey of more than 2,000 adults in the U.S. shows many continue to face severe financial pressures. While inflation has cooled rapidly over the past year—from nearly 9% in June 2022 to 3% in June 2023—nearly 9 in 10 respondents (87%) report that price increases have negatively impacted their finances. As a result, over one-third of respondents (34%) report doing worse financially than a year ago, compared to only one-quarter (25%) doing better. Twice as many report saving less now than they did last year (42%) than report saving more (21%). Consequently, it is no surprise that 90% currently find managing their finances stressful. Among working-age respondents (ages 18 to 64), nearly two-thirds (65%) report feeling anxious about their current financial situation, and only 1 in 10 (10%) report having no anxiety at all. And although working-age women are participating in the labor force at record rates, women report more anxiety about their finances than do men.
The COVID-19 pandemic exposed and exacerbated economic disparities along racial lines, with Black households experiencing higher levels of unemployment, debt, and food insufficiency compared to white households. Even after Black unemployment reached a record low in April 2023, Black households still held the smallest cash balances of any racial group, and the Black unemployment rate has edged back up to 2022 levels.
This economic hardship has taken a toll on Black households’ financial wellbeing. Significantly more Black respondents (66%) than white respondents (48%) report not always having enough cash on hand to pay their bills. And among those who do not always have enough cash on hand, Black respondents are far more likely to report turning to payday loans (22% vs. 8% of white respondents), while half of white respondents report using a credit card and paying it off over time (50% vs. 36% of Black respondents).
Despite these challenges, however, Black respondents report significantly more optimism about the path forward than their white counterparts. Thirty-six percent of Black respondents—compared to only 21% of white respondents—say they are doing better financially than a year ago, and Black respondents report saving more at nearly twice the rate of white respondents (34% vs. 18%). In addition, Black respondents are strikingly optimistic about the U.S. economy when compared to white respondents: Only 27% of Black respondents say they believe the economy will decline over the next 12 months, compared to nearly half (47%) of white respondents. Conversely, while 31% of Black respondents say they believe the economy will improve over the next 12 months, only 17% of white respondents say the same.
What Comes Next?
Americans’ financial resilience will be further put to the test this fall as several pandemic-era safety net programs come to an end. Meanwhile, the Federal Reserve will likely continue raising interest rates, increasing borrowing costs for households that have largely, though not entirely, spent down their cash reserves.
These circumstances highlight the need for policymakers to advance prudent policies that expand economic opportunity and financial security. Short-term savings can play a key role here, as a robust emergency fund can help a worker weather unexpected financial shocks. Emergency savings can also safeguard retirement savings by alleviating the need to dip into those longer-term funds when unexpected expenses arise. Recent public policy developments have helped increase awareness of the value of emergency savings, but more work is needed to ensure that all workers have access to well-designed accounts. Despite the demands, the promise of mitigating the effects of future economic downturns makes such an effort worthwhile.
This survey was conducted online within the United States by The Harris Poll on behalf of Funding Our Future and DailyPay. The survey polled 2,061 U.S. adults from June 28 to June 30, 2023. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.7 percentage points using a 95% confidence level.
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