How Race Affects Americans' Finances in the Time of Coronavirus

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No one is immune to the impact of COVID-19. The trick is to get through this crisis and plan for the next.

If you are without regular wages, trying to get by on a reduced income, or facing sky-high medical bills, you understand the financial pressures associated with COVID-19. As awful as it has been for America as a whole, the financial stress on people of color has been disproportionate and particularly cruel.

Here, we focus on the unique challenges facing people of color during COVID-19 and offer some tips for weathering the storm.

Job loss

Black and Hispanic people, communities over-represented in low-paying jobs like hospitality, domestic services, and agriculture, have suffered the highest percentage of employment due to the novel coronavirus. When the outbreak began, these workers were among the first to lose their jobs, have their hours reduced, or be required to remain on the job regardless of health risks.

In April, one month after businesses shut in most places, 61% of Hispanic, 44% of Black, and 38% of white Americans responded to a Pew Research Center survey by saying that they, or someone in their household, had already lost a job or had hours reduced by the pandemic.

Lack of an emergency fund

At the same time, 70% of Hispanic, 73% of Black, and 47% of white respondents admitted to having no emergency fund to fall back on. The majority of those without an emergency fund said they would not be able to cover their bills for three months, even if they borrowed money or sold assets.

Health concerns

The way we view the pandemic depends, in part, on the community of which we are part. It was clear early on that this disease disproportionately impacted the Black community. In April -- again, approximately one month after shutdowns began -- 27% of Black adults said they knew someone who had been hospitalized or died with COVID-19. That number was already twice the percentage of Hispanic and white adults who said the same.

Slower economic recovery

According to the Center for American Progress, 33% of Hispanics, 56% of Blacks, 31% of Native Americans, and 27% of Asian Americans have recently experienced discrimination when applying for jobs. People of color also experience discrimination when they ask for equal pay or seek a promotion. When the U.S. does begin to emerge from the dark cloud of the pandemic, people of color will likely be the last Americans to experience a sense of financial recovery.

What you can do

As tough as it is right now, there are steps you can take immediately:

  • Familiarize yourself with relief programs to find any that apply to your situation.
  • Find out if you qualify for mortgage forbearance.
  • Consider a job in high demand during the pandemic.
  • Look at side hustles to bring in extra income.
  • If you are part of a high-risk population, learn more about services available to you.
  • Explore child care options you can afford.
  • Reach out to your creditors regarding any bills you have trouble paying.
  • Protect your credit score.
  • Learn to recognize a coronavirus relief scam.
  • Make a plan to build an emergency fund after the immediate crisis has passed.

There is a good chance you will look back on this period of your life with more than a little awe -- after all, none of us have experienced anything quite like it. The most important lesson may be to never give up. As bad as things seem today, they can get better.

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