Coronavirus Response
Financial Insecurity and Coronavirus (COVID-19)
COVID-19 has magnified the issue of financial insecurity—here, we’ll share our response to this fluid situation.
As the coronavirus pandemic unfolds and the Centers for Disease Control (CDC) issues common-sense recommendations, Americans are faced with immediate and evolving concerns about their financial security. More than half of Americans are worried about the virus’ impact on the economy and their financial lives. Hourly, lower-income, and gig workers—many of whom have no access to sick pay and are living paycheck-to-paycheck—will feel the economic impact of the virus more than most.
Many employers are stepping in to provide emergency support to their employees, and as more people across the country face the very real risk of losing income due to possible illness, layoffs, and temporary closures at their workplaces and children’s schools, solutions to increase Americans’ financial security have never been more important.
Insights for Change in the Time of COVID-19
At Commonwealth, we’re conducting real-time research and developing actionable insights on low- and moderate-income Americans to better understand the challenges they face and the solutions that employers, financial institutions, and others can provide.
Commonwealth’s COVID-19 Response Webinar Series
Our webinar series – hosted in a fireside-chat, conversational style – offers insights into new data, strategies, and outcomes into how employers, financial institutions, fintechs, policy makers, and others can respond to the crisis.
See Our Upcoming & Past Webinars
Commonwealth’s Response
Should You Tap Retirement Funds in a Crisis? Increasingly, People Say Yes.
The CARES Act has loosened the rules around borrowing from retirement as a response to the financial impact of COVID-19. In a Wall Street Journal article, Commonwealth Executive Director Timothy Flacke weighs in on this strategy, which leads to concerns about people’s long-term savings.
Read the Wall Street Journal Article
What happens when you give gig workers emergency cash?
A study by Commonwealth and The Workers Lab has valuable insights around emergency cash programs and their potential as we consider the financial recovery from COVID-19. Read more on the findings and how they might be applied to cash assistance during the pandemic from Fast Company, and check out our blog post on the research to learn more.
How Does a Coronavirus Hardship Loan Work?
Many banks are offering hardship loans during the COVID-19 pandemic. In a US News article, Commonwealth Senior Vice President Melissa Gopnik weighs in on finding the right tool for a specific financial need, and the potential for employer hardship funds during this time.
Read the Article on Hardship Loans
Towards Changing Savings as Usual
In an Op-Ed for Payments Journal, Commonwealth Senior Vice President Nick Maynard and Senior Policy Manager Jason Ewas look at what financial institutions need to keep in mind while designing better savings products for those financially impacted by COVID-19 – such as removing transaction limits on savings accounts (made possible by the elimination of Regulation D) and improving liquidity.
Read the Op-Ed on Savings Products
The CARES Act Demonstrates Need for Emergency Savings Within Retirement Funds
The CARES Act removes many of the penalties for early retirement withdrawals. It’s a necessary step during this economic crisis, but it has long-term consequences for retirement savings. HR leaders can require retirement recordkeepers to build liquid emergency savings products into their platform, improving employees’ financial security for future emergencies. Commonwealth Senior Vice President Nick Maynard shares how in BenefitsPro.
Read the Op-Ed on Emergency Savings Products
Worker Financial Security: A Smart Investment During COVID-19
For some time, there has been growing evidence that firms that hold themselves to high ESG standards deliver higher returns. This advantage holds especially true now: ESG funds have demonstrated greater resilience than other ETFs as COVID-19 economic impacts have worsened.To weather this financial storm, investing in firms that prioritize worker financial security will likely result in better returns. Investors can boost their own bottom lines even further by advocating for these choices among companies already in their portfolios. Taking these steps will help all members of the economy—workers, employers, and investors alike—come through this crisis stronger for it.
Strategies for Building Employee Financial Security During the COVID-19 Pandemic
In a guest post for BenefitsPRO, Commonwealth Senior Vice President Melissa Gopnik lays out practical strategies employers can take now to improve the financial security of employees and strengthen their workforce for the future economic impact of the COVID-19 pandemic.
Nontraditional Workers Face Big Setbacks Amid COVID-19
The financial challenges of non-traditional workers have been a prominent issue during the pandemic. Planadviser covers our recent survey about the financial challenges of Etsy sellers, and Commonwealth’s Brian Gilmore spoke to them about the challenges non-traditional workers face around emergency savings.
Read the Article about Non-Traditional Workers
A Nudge to Save: How Financial Institutions Can Help Customers Leverage CARES Act Funds
Financial institutions and fintechs can play a role in leveraging cash relief from the CARES Act to improve the financial security of Americans who are still able to meet their everyday expenses. At a moment of economic uncertainty, people know how important it is to use funds to improve their financial security, whether by increasing savings or meeting other financial goals like paying down debt. Financial institutions and fintechs can help their customers translate these intentions into actions. Read more on our blog.
Read our Blog Post on Nudging to Save
Emergency Savings: The Next Workplace Benefit
Commonwealth Executive Director Timothy Flacke talked with Investment News about some of the ways employers and retirement recordkeepers can enable people to build emergency savings as the COVID19 pandemic increases financial challenges for everyone. “There is a lot of evidence to suggest that simply educating people doesn’t result in different action or behavior,” he said. “Putting quality emergency savings opportunities in front of people, in addition to financial education, is an obvious move.”
Read the Article on Building Emergency Savings
New Report: Etsy Sellers Look for More Support with the Challenge of Emergency Savings
The economic impact of the COVID-19 pandemic on non-traditional workers has been at the forefront of the national discussion in recent weeks with the passage of the CARES Act, which includes gig workers and freelancers in unemployment benefits.
Our new report on the financial security of sellers on Etsy—a partner on BlackRock’s Emergency Savings Initiative—delves deeper into the financial needs of non-traditional workers and how platforms like Etsy can provide financial security tools for Americans. You can read the key takeaways, and access the full report, on our blog.
Read the Takeaways from our Etsy Report
Op-ed: Cross-sector partnerships can enable cash relief
Cash assistance programs across America are beginning to deliver relief to workers affected by Coronavirus closures. In an op ed for Boston Business Journal, Commonwealth Executive Director Timothy Flacke shares what we have seen work well for these programs in our research.
Read the Op-Ed on Cash Assistance Programs
Podcast: “We’ve never seen anything like this before”
Commonwealth Executive Director Timothy Flacke joined American Banker’s John Heltman on his Bankshot podcast to talk about how the COVID-19 pandemic is affecting financial institutions. Tim and other experts talk about whether banks can help forestall a major economic crisis, and what some of the solutions might be.
Small-dollar loans highlight banks’ coronavirus relief efforts
Amid the COVID-19 outbreak, banks are offering low- or no-interest loans and waiving fees to make funds more accessible for consumers and small businesses. In this American Banker article, Commonwealth Executive Director Timothy Flacke encourages banks to think about what else they can do in order to support customers and relieve financial anxieties.
Read the Article in American Banker
Coronavirus closes Boston restaurants, but owners say ban is needed
An article in the Boston Herald quotes Commonwealth while looking at the impact COVID-19 closures are having on the financial security of restaurant industry workers in Boston.
The Impact of Coronavirus (COVID-19) on Financial Security: A Message from Executive Director Timothy Flacke
A letter from Commonwealth Executive Director Timothy Flacke on the financial security impact we’re seeing from COVID-19, and what we’re doing in response.
Coronavirus is Shining a Light on America’s Lack of Paid Sick Leave: Here’s How Savings Can Help
An Op-Ed written by Commonwealth Executive Director Timothy Flacke in NextBillion highlights how crucial paid sick leave is for workers, especially lower-income and gig platform workers.
Read the Op-Ed on Paid Sick Leave
Executive Director Timothy Flacke Discusses Emergency Savings on Yahoo Finance
Commonwealth Executive Director Timothy Flacke speaks with Yahoo Finance on how people can better prepare for emergencies in light of COVID-19 concerns.
Emergency Savings Can Help Offset Unexpected Emergencies, But Should Be a Long-Term Strategy
A blog post written by Commonwealth and our partners on BlackRock’s Emergency Savings Initiative shares how emergency savings can “act as both a financial and psychological buffer for lower and moderate income employees, hourly employees, and gig workers in a number of ways.”
Read the Blog Post on Emergency Savings
#coronavirus on Twitter
COVID-19 has brought to light a major issue for the financial security of many low-income and low-wage workers—and highlighted the importance of having an emergency savings buffer. We have started a thread to share others’ work on this important topic. RT≠ endorsement.
News Round-Up
Here are a few articles and briefs we’ve found that help give more context and perspective to the situation:
It’s Time To Improve Banking Access For Americans – The COVID-19 pandemic highlights the need to improve banking access and options for all Americans, but especially those who are vulnerable to overpaying for services
Who Has Enough Cash to Get Through the Coronavirus Crisis? – The COVID-19 pandemic has drawn attention to the importance of emergency savings, but many Americans struggle to build their emergency fund.
Domino’s employees receive wages, tips instantly – Through a new partnership with Minneapolis-based financial wellness benefit company Branch, employees at Domino’s franchises will be able to receive hourly pay, tips, and mileage reimbursement at the end of their shift through a digital account, allowing them to better meet their day-to-day financial needs during the COVID-19 pandemic.
This app will file an unemployment claim on your behalf – As unemployment claims spike across the United States, a startup called DoNotPay is helping people fill out claim forms and get through to their states’ jammed phone line.
PayPal, Intuit & Square approved to offer loans to small businesses through coronavirus relief program – Fintech companies are joining in to help distribute funds for the U.S. Small Business Administration’s (SBA) Paycheck Protection Program.
Checks Won’t Cut It: Getting COVID-19 Relief To The Most Vulnerable – Difficulty in delivering relief checks to Americans highlights the need to reform our payment system.
Black and Hispanic workers are much less likely to be able to telework – The Economics Policy Institute analyzes data from the U.S. Bureau of Labor Statistics showing that only 30% of workers can actually work from home, and the data shows signficant racial disparity among that group.
A List Of Fintech Firms Providing Free Technology During The Coronavirus Crisis – To help banks help their customers through these trying times, many fintech providers are extending free, discounted, or accelerated deployment offers to financial institutions.
The coronavirus crisis thrusts corporate HR chiefs into the spotlight – With many businesses facing layoffs, pay cuts, and/or sudden shifts to remote work amid the COVID-19 outbreak, HR professionals are facing new and extensive challenges.
How to Build an Emergency Fund in the Middle of an Emergency – The New York Times looks at strategies workers can use now to deal with financial emergencies happening today and in the future.
Income Tax Filing Deadline Moved From April 15 to July 15 – Tax filing deadlines have been extended to allow tax payers more time to deal with the COVID-19 outbreak.
Minnesota and Vermont will classify grocery store employees as emergency workers – New classification gives grocery store workers access to benefits such as child care.
Capitalism Meets Coronavirus: How Companies Are Responding – Just Capital is keeping a running list of how major companies are responding, from paid sick leave policies and pledges to operatioanl changes and waiving fees.
Coronavirus to impact low-wage, black workers the most – The financial impact of the Coronavirus outbreak is unequal, following along the lines of the racial wealth gap.
Resources
We’re tracking funds that have been set up to support those most impacted financially by the outbreak.
Boston Resiliency Fund – Funding food for children and seniors, technology for learners, and support for first responders and healthcare workers.
COVID-19 Response Fund – Supporting community organizations in the greater Boston area.
COVID-19 Family Support Fund – Supporting the families of hospitality, retail and other hourly workers, those experiencing homelessness, and children relying on school for one or more meals each day, among others.
COVID-19 Loan Fund – For Massachusetts-based businesses impacted by the COVID-19 with under 50 full- and part-time employees, including nonprofits.
Stay in Touch
Follow Commonwealth on LinkedIn, Twitter, and Facebook as we continue to monitor the coronavirus’ impact on financial security and share our insights, work, and the work of others responding to the situation.
For media inquiries, please contact Jackie Jusko at jjusko@buildcommonwealth.org or by phone at 216-374-0945.