(Reuters) – The coronavirus crisis led to dramatic changes in Americans’ finances as millions of workers faced layoffs or other cutbacks in their jobs, with low-wage workers taking the biggest hit, according to a report released by the Federal Reserve on Thursday.
Nearly one in five of all adults either lost their jobs or had their hours reduced at work in March, the survey found. The job cuts were most severe for lower-income workers, with 39% of people with a household income of less than $40,000 reporting a job loss in March. That compares to 19% of workers with household incomes between $40,000 and $100,000 and only 13% of workers with household incomes above $100,000, the Fed said.
Nine in 10 people who were furloughed or lost their jobs said their employers told them they would return to their job at some point. Generally, however, people did not know when they would be able to return to work, since 77% of workers who lost their jobs were told they would be able to come back to their jobs but did not get a set return date.
The Fed’s latest Survey of Household Economics and Decisionmaking found that consumers’ finances were largely improving in 2019 before the pandemic, but many workers were unprepared to deal with a financial crisis.
Before the pandemic, 30% of adults said they could not cover three months of expenses by borrowing or using savings. Among adults that had not retired, 25% lacked retirement savings before the crisis, the survey found.
Overall, people with higher incomes and higher levels of education fared better financially. More than half of all workers, or 53%, did some work from home in the last week of March, but people with higher levels of education were more likely to have that option. Sixty-three percent of workers with a bachelor’s degree were able to work from home, while only 20% of workers with a high school degree or less could do their jobs from home.
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