Overall Economic Well-Being in 2019
The share of people reporting that they were doing at least okay financially was unchanged in 2019 relative to 2018 but remained significantly above that seen when the survey began in 2013.3 This generally positive assessment of economic well-being was consistent with the continued economic expansion and the low national unemployment rate at the time. Even so, the persistent disparities across education, race, and neighborhoods remained.
Current Financial Situation
Three-quarters of adults at the end of 2019 indicated they were either "doing okay" financially (39 percent) or "living comfortably" (36 percent), matching the rate in 2018. The rest were either "just getting by" (18 percent) or "finding it difficult to get by" (6 percent). The 75 percent of adults doing at least okay financially in 2019 remained well above the 62 percent doing at least this well in 2013 (figure 1). However, based on the results of a follow-up survey conducted in early April 2020, it is apparent that financial conditions have declined since that time (see box 1 and the "Financial Repercussions from COVID-19" section of this report).
Figure 1. At least doing okay financially (by year)
Despite the positive trend in overall well-being through 2019, differences across education groups remained substantial and grew in recent years. Adults with a bachelor's degree or more were significantly more likely to be doing at least okay financially (88 percent) than those with a high school degree or less (63 percent). This 25 percentage point difference in financial well-being by education grew by 6 percentage points over the two years from 2017 to 2019. However, the gap in 2019 was not statistically different from that observed in the first year of the survey in 2013 (figure 2).
Figure 2. At least doing okay financially (by year and education)
Differences in financial well-being across racial and ethnic groups also persisted in 2019. Two-thirds of black and Hispanic adults reported that they were doing at least okay financially, compared to 8 in 10 white adults.4 These differences in well-being by race and ethnicity were statistically unchanged relative to 2018. Although white, black, and Hispanic adults all experienced improvements in their financial well-being since the survey began in 2013, the gap in well-being across races and ethnicities remained at least as large (figure 3).
Figure 3. At least doing okay financially (by year and race/ethnicity)
Although there are many potential reasons for these persistent gaps in financial well-being by race and ethnicity, one contributing factor may be discrimination. One-quarter of black adults, 18 percent of Hispanic adults, and 7 percent of white adults indicated that they personally experienced discrimination or unfair treatment in the past year because of their race, ethnicity, age, religion, disability status, sexual orientation, gender, or gender identity.5 Among the overall adult population, 12 percent of adults reported experiencing discrimination for one of these reasons.
Financial well-being also varied by sexual orientation in 2019. Sixty-four percent of adults identifying as gay, lesbian, or bisexual reported in 2019 that they were at least doing okay financially, compared to 77 percent of straight adults who had a similarly positive financial situation.6 The gap in well-being by sexual orientation was particularly strong among women who were married or living with a partner (figure 4).7 Among men who were married or living with a partner, there was no similar well-being gap by sexual orientation.
Figure 4. At least doing okay financially (by gender, marital status, and sexual orientation)
Note: Key identifies bars in order from top to bottom.
Other dimensions across which financial well-being differed include income, marital status, and neighborhood (table 1); as well as by exposure to crime or the criminal justice system (see box 2). Fifty-five percent of adults with family income less than $40,000 said they were doing okay financially, versus 95 percent of adults with income greater than $100,000. Married individuals and those living with a partner were generally more likely to report that they were doing at least okay financially than unmarried individuals.8 People living in low- and moderate-income communities also reported lower levels of well-being than those living in middle- or upper-income communities.
Table 1. Share of adults at least doing okay financially (by demographic characteristics)
Percent
| Characteristic | 2019 | Change since 2018 | Change since 2013 |
|---|---|---|---|
| Family income | |||
| Less than $40,000 | 55 | -1 | 13 |
| $40,000–$100,000 | 81 | 2 | 15 |
| Greater than $100,000 | 95 | 1 | 13 |
| Race/ethnicity | |||
| White | 79 | 1 | 14 |
| Black | 65 | 0 | 12 |
| Hispanic | 66 | 0 | 11 |
| Marital status | |||
| Single | 65 | 0 | 10 |
| Married or living with a partner | 81 | 1 | 14 |
| Urban/rural residence | |||
| Urban | 76 | 1 | 13 |
| Rural | 72 | 1 | 13 |
| Neighborhood income | |||
| Low or moderate income 1 | 64 | -2 | n/a |
| Middle or upper income | 80 | 1 | n/a |
| Overall | 75 | 1 | 13 |
Note: Here and in subsequent tables and figures, percentages may not sum to 100 due to rounding and question nonresponse. Census tracts were not included in the 2013 SHED, so changes in neighborhood income since 2013 are not available.
1. Low- or moderate-income neighborhoods are defined here as those census tracts with a median household income less than 80 percent of the national median income. Return to table
n/a Not applicable.
There is also a small, but persistent, difference in financial well-being between those living in urban and rural areas. In 2019, individuals in rural areas were 4 percentage points less likely to report that they were at least doing okay financially than those in more urban environments—unchanged from the difference seen in 2018.9 Additionally, while the financial well-being of those in both urban and rural areas rose by 13 percentage points since 2013, the 4 percentage point gap in well-being across these geographies in 2019 was nearly the same as it was when the survey began six years earlier.
Box 1. Overall Economic Well-Being in April 2020
Although financial circumstances were generally positive for most adults at the end of 2019, financial conditions changed dramatically for many families beginning in March 2020 as the spread of COVID-19 intensified in the United States. For instance, according to the Department of Labor, record numbers of people filed initial claims for unemployment insurance benefits in the final weeks of March and the beginning of April.1 Recognizing this changing financial landscape, the Federal Reserve Board fielded a supplemental survey ("April supplement") over the first weekend of April 2020 to obtain an updated picture of families' financial situations.
Consistent with the employment declines seen in other data, results from the April supplement point to the substantial job losses that were occurring. Thirteen percent of adults reported that they lost a job or were furloughed between March 1, 2020, and the time at which they completed the survey during the first weekend in April. However, as discussed further in the "Financial Repercussions from COVID-19" section of this report, most of those who lost a job expected in early April that the layoff would be temporary and that they would return to the same employer. An additional 6 percent of adults reported that they had their hours reduced or took unpaid leave.
Similarly, fewer adults reported that they were at least doing okay financially in April 2020 than had been the case six months earlier. In the April supplement, 72 percent of adults were either "doing okay" financially (43 percent) or "living comfortably" (29 percent). This is down from the 75 percent of adults who were at least doing okay financially in the fall of 2019 and the 36 percent who were living comfortably.
These declines in self-reported financial well-being were concentrated among those who lost a job or had their hours cut (figure A). Among those adults not experiencing a job loss or reduction in hours, 76 percent were doing at least okay financially in April, which is similar to the overall share of adults who reported doing at least okay financially in the fall. Among those who experienced a job loss or hours reduction, 51 percent indicated that they were doing at least okay financially in April, whereas 48 percent were either struggling to get by or just getting by.
Figure A. At least doing okay financially (by job loss or work hours reduced since March 2020)
Note: April 2020 supplemental survey data.
Recognizing that the April supplement was fielded relatively soon after families began to experience the financial repercussions of COVID-19, these results may not reflect the full extent of financial hardship that will result from the pandemic. Nevertheless, they provide an initial indication of how families were faring relative to the fall of 2019 as the economic environment changed around the country.
For more information, see "Financial Repercussions from COVID-19" later in this report.
1. U.S. Department of Labor, Unemployment Insurance Weekly Claims (April 9, 2020), https://oui.doleta.gov/press/2020/040920.pdf. Return to text
Return to textBox 2. Financial Experiences Related to Crime and the Court System
More than 1 in 5 respondents in 2019 said they had an immediate family member who was ever incarcerated overnight or longer, and 1 in 10 have ever been the victim of violent crime. At the time of the survey, black and Hispanic adults, people with less income, and people with less education were disproportionately likely to report being affected by incarceration, violent crime victimization, and legal expenses (table A). There was also considerable overlap between those who had immediate family who had been incarcerated, victims of violent crime, and those who had unpaid legal expenses.
Table A. Exposure to crime and the court system (by demographic characteristics)
Percent
| Characteristic | Ever have family member in prison or jail |
Ever been a victim of violent crime | Family currently has unpaid legal expenses, fines, or court costs |
|---|---|---|---|
| Income | |||
| Less than $40,000 | 28 | 12 | 10 |
| $40,000–$100,000 | 23 | 7 | 6 |
| Greater than $100,000 | 14 | 7 | 3 |
| Education | |||
| High school degree or less | 29 | 9 | 9 |
| Some college/technical or associate degree | 24 | 11 | 7 |
| Bachelor's degree or more | 13 | 6 | 4 |
| Race/ethnicity | |||
| White | 19 | 8 | 5 |
| Black | 36 | 11 | 12 |
| Hispanic | 26 | 11 | 9 |
| Overall | 22 | 9 | 6 |
Criminal convictions have been shown to result in difficulty finding future employment.1 Yet, an additional repercussion that has recently received attention is the effect of court costs and legal fees on people's financial lives, in some cases, for years afterward.2 Six percent of all adults, and one-fifth of those who have had an immediate family member in prison or jail, indicated that their family had such debt at the time of the survey.
Individuals whose families had outstanding legal expenses frequently were carrying other forms of debt as well. For instance, 43 percent of those whose family had legal debt also had outstanding medical debt (figure A). Those with outstanding legal fees were also disproportionately likely to have credit card debt and more likely to carry student loan debt—despite being less likely to have gone to college than those without unpaid legal debts.
Exposure to crime or the legal system correlates with lower levels of financial well-being. This was especially true among those who still had unpaid legal debts. Fifty-three percent of those whose family had outstanding legal debt were doing at least okay financially relative to over three-quarters of those without legal debt. Among those who ever had an immediate family member in prison or jail, 65 percent were doing at least okay financially.
Figure A. Other forms of debt outstanding (by unpaid legal expenses)
Note: Key identifies bars in order from top to bottom. Credit card debt among adults with at least one credit card.
Similarly, carrying debt from legal expenses correlates with less access to credit and banking products, which can exacerbate the financial challenges. Fewer than half of those whose family had unpaid legal debts were fully banked (table B). Four in 10 of those in this group were underbanked—meaning they had a bank account but also relied on one or more alternative financial service. Additionally, those whose family had outstanding legal expenses were both less confident that they would be approved
for a credit card and were more likely to report a credit denial than those without these outstanding expenses.
Table B. Credit confidence, credit denials, and banking status (by unpaid legal expenses)
Percent
| Credit and banking status | No unpaid legal expenses | Family has unpaid legal expenses |
|---|---|---|
| Credit experience | ||
| Confident about credit | 82 | 56 |
| Denied credit | 22 | 52 |
| Banking status | ||
| Unbanked | 5 | 13 |
| Underbanked | 14 | 39 |
| Fully banked | 81 | 48 |
Note: "Denied credit" is among adults who applied for credit in the year before the survey. Fully banked individuals had a bank or credit union account and had not used an alternative financial service in the past year.
1. Devah Pager, "The Mark of a Criminal Record," American Journal of Sociology 108, no. 5 (2003): 937–75. Return to text
2. See Gene Nichol and Heather Hunt, "Court Fines and Fees: Criminalizing Poverty in North Carolina," North Carolina Policy Watch Report (2017) and Pamela Foohey, "Fines, Fees, and Filing Bankruptcy," North Carolina Law Review 98, no. 2 (2020): 419–26. Return to text
Return to textChanges in Financial Situation over Time
The average well-being in a handful of broad categories across survey years could mask the degree of change—both positive and negative—within specific families. When asked directly about changes in their finances, adults in 2019 were twice as likely to report that their finances improved over the prior 12 months (32 percent) than worsened (14 percent). The remainder—54 percent of adults—said their finances were about the same as the prior year. This matches the change in well-being over time observed in the 2018 survey.
To get a longer perspective than year-to-year changes, individuals also compared their current economic well-being to their parents' at the same age. Looking across a generation, there is evidence of economic progress over time. A majority of adults (57 percent) said they were better off financially than their parents were (table 2). One-fifth said they were worse off than their parents were at the same age.
Table 2. Financial situation compared to parents at same age (by education)
Percent
| Education | Worse off | About the same | Better off |
|---|---|---|---|
| High school degree or less | 21 | 24 | 54 |
| Some college/technical or associate degree | 22 | 22 | 56 |
| Bachelor's degree or more | 18 | 20 | 62 |
| Overall | 20 | 22 | 57 |
Having a bachelor's degree or more is generally associated with greater rates of upward economic mobility than having less education. This is particularly true among first-generation college graduates, among whom over two-thirds reported being better off financially than their parents were.10 The relationship between parents' educations and one's own education is discussed further in the "Higher Education" section of this report.
Local Economic Conditions
Along with questions about their own financial circumstances, people were asked to assess their local economy. Sixty-three percent of respondents rated local economic conditions as "good" or "excellent" in 2019, with the rest rating conditions as "poor" or "only fair." This was nearly unchanged from the 64 percent of adults who had a positive assessment of their local economic conditions in 2018.
The assessments differ widely by demographics and geography (table 3). Whereas 67 percent of white adults viewed their local economic conditions as good or excellent, 46 percent of black adults and 57 percent of Hispanic adults rated their local economies favorably. Looking across geography, majorities of both urban and rural residents rated their economy as good, although those living in urban areas viewed their local economic conditions more favorably: 53 percent of adults living in rural areas rated their economy as at least good, compared to nearly two-thirds of those living in or near cities. Adults who live in low- and moderate-income neighborhoods were much less likely to report favorable local economic conditions than those in middle- or upper-income neighborhoods.
Table 3. Self-assessment of the local economy as good or excellent (by select characteristics)
Percent
| Characteristic | Good or excellent |
|---|---|
| Race/ethnicity | |
| White | 67 |
| Black | 46 |
| Hispanic | 57 |
| Urban/rural residence | |
| Urban | 65 |
| Rural | 53 |
| Neighborhood income | |
| Middle or upper income | 69 |
| Low or moderate income | 45 |
| Overall | 63 |
Subjective measures of local economic conditions—like these self-assessments—can add to our understanding of individual experiences. As one example, consider the 9 percent of adults in 2019 who personally knew someone who was currently addicted to opioids or prescription painkillers.11 Some research argues that economic decline in certain communities has contributed to the opioid epidemic.12 In 2019, those who viewed their local economy as good or excellent were less likely to say that they personally knew someone who was dealing with addiction to opioids (8 percent) than were those who viewed their local economy as fair or poor (11 percent). Even after accounting for race, rural or urban status, and neighborhood income, the modest relationship between opioid exposure and self-assessed local economic conditions remains.
References
3. The survey was fielded in October 2019 and results reflect financial situations at that time. References to "during 2019" refer to the 12-month period before the survey rather than the precise calendar year. Return to text
4. Throughout this report, racial and ethnic groups are separated into white, black, and Hispanic adults. These categorizations represent the largest statistical groupings, but are neither exhaustive nor the only distinctions that are of importance to understand. Sample sizes in the survey for other races and ethnicities limit the reporting of reliable estimates for other racial and ethnic subpopulations. Return to text
5. The survey did not ask respondents about the area in their lives where they feel that discrimination occurred, although potential areas considered in earlier research include employment and credit access. For example, David Neumark provides a summary of research on discrimination in labor markets ("Experimental Research on Labor Market Discrimination," Journal of Economic Literature 56, no. 3 (2018): 799– 866) while Robert Bartlett, Adair Morse, Richard Stanton, and Nancy Wallace consider discrimination in lending markets ("Consumer-Lending Discrimination in the FinTech Era," NBER Working Paper 25943 (2019)). Return to text
6. Survey respondents could report their sexual orientation as straight, gay or lesbian, bisexual, or something else. For the purposes of this report, we include those reporting something else as their sexual orientation with the group of those reporting that they are gay, lesbian, or bisexual. Return to text
7. This lower-rate of financial well-being among lesbian and bisexual female couples is consistent with the findings by Christopher Carpenter, who observed that same-sex female couples have substantially lower incomes than married heterosexual couples ("New Evidence on Gay and Lesbian Household Incomes," Contemporary Economic Policy 22, no. 1 (January 2004): 78–94). Return to text
8. Throughout this report, references to married individuals include both those who are married and those who are living with a partner. Return to text
9. Rural areas are defined throughout this report as being outside of a Metropolitan Statistical Area (MSA) and urban areas are those inside of a MSA, as defined by the Office of Management and Budget in 2010. This definition differs from the Census Bureau's definition of urbanized areas. For details, see U.S. Census Bureau, "2010 Urban Area FAQs," https://www.census.gov/programs-surveys/geography/about/faq/2010-urban-area-faq.html. Return to text
10. First-generation college graduates are those who have at least a bachelor's degree and who report that neither of their parents completed at least a bachelor's degree. Return to text
11. In 2018, the SHED found that 21 percent of adults personally knew someone who has been addicted to opioids or prescription drugs. In order to obtain a more current measure of opioid addiction, the question was revised in 2019 to ask whether respondents personally know someone who is currently addicted to opioids or prescription drugs. This change in reference period means that the results are not comparable across these years. Return to text
12. See Jeff Larrimore et al., "Shedding Light on Our Economic and Financial Lives?" FEDS Notes (Washington: Board of Governors of the Federal Reserve System, May 22, 2018), https://www.federalreserve.gov/econres/notes/feds-notes/shedding-light-on-our-economic-and-financial-lives-20180522.htm. Return to text