Fears grow for the financially vulnerable, index shows
Inequality widened in September, driven by income losses and fears among the most financially vulnerable, according to the latest Morning Consult/Axios Inequality Index released today.
Why it matters: As COVID continues to spread, expanded pandemic-era unemployment benefits expired this month, removing a financial safety net for 7.5 million Americans.
- Worsening inequality underscores the role the enhancements played for those at the low end of the income spectrum, Morning Consult chief economist John Leer tells Axios.
- “What’s particularly different right now — if you connect the economic reality with the policy situation — is that those folks who experienced pay and income losses don’t have unemployment insurance benefits to help support them and support their finances," Leer says.
How the index works: It compares sentiment between income groups based on consumer confidence, employment outcomes, employment expectations and financial vulnerability. The larger the gaps, the higher the inequality level.
- The overall index widened to 7.23% from 6.52% in August.
What they found: The Delta variant's impact on employment is worsening, especially in customer-facing service sectors where consumer confidence also factors in.
- For example, the share of food and beverage workers reporting income losses shot up to 26.5%, from 19.1% in the span of four weeks. These are typically lower-paying jobs so the gap in income losses between someone making less than $50,000 and a person making more than $100,000 increased to 4.5%.
- Paying bills is getting harder for some. The number of people who say they can't afford a month of basic expenses rose to 31.1% from 29% for those earning less than $50,000 — and fell to 5.3% from 9.8% for those earning above $100,000.