



How long would it take you to save for an emergency like the coronavirus? If you’re rich, it would take about two months to save enough to cover four weeks of expenses. If your household makes somewhere between $70,000 and $99,999, you can save that much in seven to eight months. An average household of more than two people making a total of $50,000 to $69,999 would need more than two years to save one month's worth of expenses. Note: Estimates are based on average annual expenditures and income after taxes · Source: Consumer Expenditure Survey, 2018

Do you have enough money saved to weather this pandemic? If you are an American, your answer may well be no.

Even before Covid-19, many Americans were living check to check, because of the costs of housing and child care, student debt payments, medical bills and the rest. Despite the cheery insistence of people like President Trump and personal finance gurus, the economic growth of the last decade had not brought wealth or security to most Americans. Fewer than half of American adults — just 47 percent — say that they have enough emergency funds to cover three months of expenses, according to a survey conducted this month by the Pew Research Center.

In the coronavirus’s wake, those without savings may also be losing their jobs, leaving them with little to support their families other than the CARES Act relief from the government, help from charitable groups or GoFundMe or Venmo tip jar campaigns. This won’t be enough to save many families from ruin. There’s so much more this country must do to protect its people from financial hardship wrought by the pandemic.

Most Americans don’t have enough emergency savings to last three months. Many of them have been financially affected by the pandemic. Share of adults, by income level Had to take a pay cut or lost job or both because of coronavirus outbreak Don’t have three months of emergency funds Low income 77% 52% 48 23 Middle income 52 58 48 42 Upper income 25 68 75 32 Don’t have three months of emergency funds Low income 77% 23 Middle income 52 48 Upper income 25 75 Had to take a pay cut or lost job or both because of coronavirus outbreak Low income 48 52% Middle income 58 42 Upper income 68 32 Note: Survey of U.S. adults conducted April 7-12, 2020 · Source: Pew Research Center

Americans all along the income scale are feeling the pinch. Brenda Madison in Laguna Beach, Calif., says that several of her jobs, including doing graphic design and working at Athleta, have dried up. She estimates that she has made between roughly $35,000 and $100,000 per year doing various jobs over the past decade. But she and her husband, an I.T. administrator, don’t have savings accounts, she says, only retirement accounts. They are depending on her husband’s salary for now. “At least my husband still has a job,” she says. “But his company has been losing a lot of business, so I don't know what our future looks like.”

Jason Savoy, 36, in Austin, Texas, says he still has his job, at the supermarket chain Trader Joe’s, but it doesn’t pay enough for him to save. Mr. Savoy makes $14.90 an hour, and while he is relieved to still be employed, he has reason to worry: His savings account has just 14 cents in it. If he becomes ill — a real possibility given the grocery workers now falling sick — it could quickly send him hurtling over a financial ledge, as medical bills could be prohibitively high. As Mr. Savoy observes darkly, “Credit cards are the new savings account.”

Jason Savoy in the parking lot of a Trader Joe's in Austin, Texas, before his shift. Ilana Panich-Linsman for The New York Times

Americans have trouble saving for a range of reasons, according to research by the Bureau of Labor Statistics. For lower-income people in particular, spending can exceed their incomes if household members draw on their savings when they are unemployed, or if they borrow or rely on savings when they experience business losses. Paying off student loans and being retired can make it difficult for people to save or lead people to draw on their savings.

For lower-income Americans, expenses far exceed income Average income and expenses, by income before taxes Income after taxes Expenses Expenses are about three times higher Less than $15,000 $15,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$69,999 $70,000-$99,999 $100,000-$149,999 Income left for investing or saving $150,000-$199,999 $200,000 and more $0 $50K $100K $150K $200K Income after taxes Expenses Expenses are about three times higher Less than $15,000 $15,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$69,999 $70,000-$99,999 Income left for investing or saving $100,000-$149,999 $150,000-$199,999 $200,000 and more $0 $100K $200K Income after taxes Expenses Expenses are about three times higher Less than $15,000 $15,000-$29,999 $30,000-$39,999 $40,000-$49,999 $50,000-$69,999 $70,000-$99,999 $100,000-$149,999 Income left for investing or saving $150,000-$199,999 $200,000 and more $50,000 $100,000 $150,000 $200,000 $0 Source: Consumer Expenditure Survey, 2018

But being middle class — or even upper-middle class — doesn’t ensure someone has adequately quilted their nest for calamity. As you go up the class ladder, there is still limited security. Based on the Consumer Expenditure Survey 2018, we found that even families earning between $100,000 and $150,000 would need to save their discretionary income for almost five months to be able to pay for one month’s expenses.

Michelle Belmont, 40, a Web developer in Minneapolis, struggles to save despite a good salary. The mother of a young son, Ms. Belmont still has her job, where she earns $107,000 per year, but she has no savings and is bankrupt, partly as a result of college, medical debt and divorce. The coronavirus hasn’t changed her life much economically, but it has affected her outlook, including her habits as a consumer. “I have been doing more bartering with friends for necessities,” says Ms. Belmont. Her new activities include trading “books for aloe and toilet paper for active yeast.”

For Nicole Braun, 53, an adjunct professor of sociology who lives in Chicago with a grown son, her tenuous economic situation has become even more precarious in the pandemic. She not only has no savings but also has already “lost a couple of jobs that I was supposed to do in the future.” They include a research job that has been put on hold and potential teaching jobs.

“I am worried I will not be able to pay for my rent and then I will be homeless,” she says. She sees her current experience as a consequence of the existing political order, part of a broader sweep of suffering that many others share.

Michelle Belmont outside her home in Minneapolis, Minn. Jenn Ackerman for The New York Times

Nicole Braun at home in Chicago. Laura McDermott for The New York Times

Situations like Ms. Braun’s indicate that state governments and even the federal government should be subsidizing rent for households experiencing financial hardship for as long as the coronavirus wave lasts.

We also need the equivalent of a universal basic income for people who take care of a family member, be that a child or an elder, as well as for lower-income Americans. While there is some provision for paid leave in the stimulus bill, an actual U.B.I. could go a lot further. Take Laura Pozos, 57, a cook at a McDonald’s in Los Angeles. She was able to go on strike against the restaurant chain starting on April 5 because she and her husband, a mechanic, had $1,000 in savings. She did so when a co-worker tested positive for the virus and she and other workers felt the company didn't do enough to protect their health.

Ms. Pozos, who earns $14.77 an hour, is able to protect her and her family’s health by not going to work, but she is spending down her small savings as a result. “It’s going for food, rent and utilities that are required for a household,” she says.

She supports two of her three children, including one who has special needs.

Something like U.B.I. — a direct deposit of at least $1,000 per month into her bank account — would help Ms. Pozos, serving the role of emergency savings where none may otherwise exist. Even a small amount of savings makes a huge difference for Americans like her: A 2016 Urban Institute study found that lower-income families with savings of $2,000 to $4,999 are more financially resilient than middle-income families without savings. If she can’t return to work, Ms. Pozos and her family will need more than the one-time payment of up to $1,200 per person that the CARES Act promises.

“The $1,200 amount is ridiculous,” says Ms. Braun. “The pandemic has exposed the deeper issues, with people falling through the cracks. It shows structural failures.”

Rich and poor families struggle financially when their incomes fall Share of families who experience hardship after involuntary job loss, a health-related work limitation or an income drop of 50 percent or more No income disruption Income disruption LOW-INCOME MIDDLE-INCOME HIGH-INCOME Evicted Missed housing payment Missed utility payment Received public benefits 0% 20 40 0% 20 40 0% 20 40 No income disruption Income disruption LOW-INCOME Evicted Missed housing payment Missed utility payment Received public benefits 0% 20 40 MIDDLE-INCOME Evicted Missed housing payment Missed utility payment Received public benefits 0% 20 40 HIGH-INCOME Evicted Missed housing payment Missed utility payment Received public benefits 0% 20 40 No income disruption Income disruption LOW-INCOME MIDDLE-INCOME HIGH-INCOME Evicted Missed housing payment Missed utility payment Received public benefits 0% 20 40 0% 20 40 0% 20 40 Note: Based on 2008 Survey of Income and Program Participation. · Source: Urban Institute

Given the level of hardship, we should be sure to help workers first, rather than companies: while the CARES Act helps individuals, it also greatly aids particular companies like Boeing, which are expected to get up to $17 billion in assistance.

Other ways to help people with low or no savings include broadening unemployment insurance or relieving student debt. On a smaller scale, financial institutions should drop expensive overdraft and A.T.M. fees, and high interest rates for loans and credit card payments. In addition, “employers could provide matching funds for emergency savings accounts and short-term loans guaranteed against stimulus checks,” recommends Chuck Collins, the director of the Program on Inequality at the Institute for Policy Studies (the fiscal sponsor of the organization I run, the Economic Hardship Reporting Project). As little as $250 in savings might be the difference between that family’s missing a utility payment or getting evicted.

Ms. Braun, for one, is having trouble concentrating and sleeping now. “This lack of savings feels like a form of psychological violence,” she says.

If we don’t start helping people create the financial security they need, we will prove ourselves a society that is practicing moral distancing as well.