A Moment of Reckoning: New Data Indicates Americans Believe Institutions Should Help Build Financial Security
More than 80% of Americans Agree That Household Financial Insecurity is a Major Problem.
Prior to the economic collapse caused by COVID-19, an overwhelming majority of Americans understood financial insecurity was a major problem that could affect them at any point and at any income level, and looked to institutions like the government, financial institutions and employers to help fix it, according to a new study by nationally recognized nonprofit Commonwealth, made possible by support from MetLife Foundation.
The findings, revealed in Perceptions of Financial Insecurity in America: A National Survey of Working People in the United States, were the result of a nationally representative survey of 2,000 workers at all income levels in the summer of 2019, prior to the onset of COVID-19 and its accompanying economic devastation.
“This is a call to action for business leaders: a crystal clear signal from Americans that they have a role in shaping a better, more financially secure America,” said Commonwealth Co-Founder & Executive Director Timothy Flacke. “As we begin to think about our financial recovery, it’s important that we understand returning to the status quo isn’t good enough.”
The survey results provide context to the experience and perceptions of financial insecurity in America: its pervasiveness, causes, and who should help address it. They also highlight Americans’ experience with financial insecurity and set the groundwork for more productive, empathetic conversations from key stakeholders on creating financial opportunity for all.
Over 80% of respondents indicated that financial insecurity was a major problem for America, and only 30% said that financial insecurity was exclusively a result of personal choices.
“America stands at a profoundly uncomfortable moment in time, but that discomfort presents an opportunity,” Flacke continued. “The data demonstrates that even prior to the COVID economic crisis, Americans understood that financial insecurity was a problem nearly anyone could face, and that institutions such as employers, financial institutions and the government must play an important role in fixing it.”
Key Findings:
- Financial insecurity is widely recognized as a significant problem. 81% of American workers recognize that financial insecurity is a problem. A majority — 75% — have had some experience with financial insecurity themselves, and 85% saw financial insecurity as a problem that can happen to anyone, no matter their income level.
- A majority of respondents saw external forces as a major factor in financial insecurity. Only 30% of respondents attributed financial insecurity to exclusively or mostly personal behaviors like overspending or having a poor work ethic. The majority (70%) blamed external causes — including systemic issues like the rising cost of living, stagnant wages, and racial and gender pay disparities — as much or more than personal factors. Half of the respondents agreed with statements that there are historical discriminatory practices that continue to impact people of color and women from having equal access to financial opportunities today.
- Experience influences perceptions on the causes for financial insecurity. Life experience and demographics influenced the perceptions of the causes of financial insecurity. Black respondents, women, those making under $60,000, and those with current experience with financial insecurity were more likely to recognize the significant role of external factors.
- No matter perceptions on causes, a majority of respondents believe institutions have an important role to play in improving financial security. The majority of working Americans believe that private and public institutions have a critical role to play in financial security, with employers, financial institutions and government recognized as the top three sectors.
Download a copy of our report.
About Commonwealth
Commonwealth strengthens the financial opportunity and security of financially vulnerable people by discovering ideas, piloting solutions, and driving innovations to scale. For nearly two decades, Commonwealth has designed effective innovations, products, and policies enabling over 750,000 people to accumulate more than $2 billion in savings. Commonwealth understands broad changes require market players to act. That’s why we collaborate with consumers, the financial services industry, employers, policy-makers and mission-driven organizations. The solutions we build are grounded in real life, based on our deep understanding of people who are financially vulnerable and how businesses can best serve them. For more information, visit www.buildcommonwealth.org.
About MetLIfe Foundation
At MetLife Foundation, we believe financial health belongs to everyone. We bring together bold solutions, deep financial expertise and meaningful grants to build financial health for people and communities that are underserved and aspire for more. We partner with organizations around the world to create financial health solutions and build stronger communities, engaging MetLife employee volunteers to help drive impact. To date, our financial health work has reached 13.4 million low-income individuals in 42 countries. To learn more about MetLife Foundation, visit metlife.org.
About The Financial Opportunity Project
Decades of research points to the material, psychological and social value of wealth. Yet, building financial security is a persistent challenge for lower-income Americans who continue to become less wealthy, not more. In fact, nearly 40 percent of people in the United States cannot cover an unexpected $400 emergency expense, according to the Federal Reserve.
MetLife Foundation’s Financial Opportunity Project aims to reverse this trend. The four-year initiative, implemented by Commonwealth thanks to the generous support of MetLife Foundation, will uncover and highlight new consumer insights and pilot practices to enable wealth creation for millions of low-income individuals and families over time.
