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Until mid-March, Alysse Hopkins maintained a comfortable life in Rockland County, New York, as an attorney.
In a typical year, Hopkins, 43, and her husband, Ian Boschen, 41, earn about $ 175,000, enough to cover a home loan, rent two cars, student loans and credit card payments. using and raising two daughters.
After the outbreak of Covid-19, many courts closed, so the lawsuits were postponed and Hopkins’ business was no more. She said unemployment benefits help a bit, but the Hopkins are running out of savings and unable to pay the $ 9,000 monthly mortgage, including home loans.
“I am desperate because I cannot make a living,” she said. “I have a law degree and almost 20 years of practice.”
Attorney Alysse Hopkins at a home in Rockland County, New York. Image: WSJ.
Millions of Americans lost their jobs to Covid-19 when restaurants, shops, and other public facilities were closed, and tourism was hit hard. The low-income working class is among those hardest hit by the pandemic, but the crisis has also created an unprecedented challenge for the American middle class.
Debt is not a big problem before the pandemic. The labor market is booming and median incomes are increasing, allowing households to keep up with debt payments.
Before the pandemic, America’s total consumer debt was $ 4.2 trillion, excluding home loans, according to the Federal Reserve Bank of New York. If home equity is included, the total number will reach 14.2 trillion.
Covid-19 affects almost all occupations and unemployment benefits, even with incremental adjustments, cannot compensate high-income workers, especially in expensive cities. Red. In July, the government approved an additional grant of $ 600 per person per week to help people withstand an overdue pandemic, increasing their burden.
“What I see is an attack on educated and successful families, the new core of middle-class American families,” said Anthony Carnevale, director of the University’s Center for Education and Labor. Georgetown School, Commentary. “A professional workforce is being laid off.”
Nearly six months after the pandemic, many banks have allowed borrowers to postpone monthly payments, but are now forced to ask borrowers to resume payment.
Credit card debt has decreased in recent months. But much of the government support has disappeared and parliament is still in contention over the second Covid-19 bailout.
President Donald Trump signed an executive order in August adding $ 300 a week to federal unemployment benefits. However, the spending has yet to be rolled out by all states and Democrats accuse the president of violating Congressional spending rights.
The unemployment rate has fallen from almost 15% at the peak of the epidemic, but still stands at 8.4% in August, 3.5% more than in February. The unemployment rate in the arts, design, media, sports and entertainment industries was 12.7% in August, almost triple the same period last year. In the education sector, the unemployment rate in August more than doubled from the previous year, to 10.2%. The unemployment rate in the retail and office sectors is 7.8%, up from 3.8% in August 2019.
The profession of engineers and architects, whose average weekly income before taxes of $ 1,826, well above the average of $ 1,389 for full-time salaried workers, now sees a loss. the industry increased from 0.8% to 3.7% after one year. The unemployment rate in math and information technology, average income of $ 1,919 / week, increased more than three times to 4.6%.
Even so, the situation could still get worse. “Administrative layoffs will continue,” said Roger Hochschild, CEO of Discover Financial Services, a finance company.
Lynn Scott-White, 47, took an unpaid absence from work as a travel agency distributor in March. Before the translation, she and resisted earning about $ 150,000 a year.
Couple in Denton, Texas, pays $ 4,400 a month in home loans, four car loans, and a car rental and student debt. The minimum total monthly credit card payment amount is approximately 700 USD. They can manage their pre-pandemic debt well.
When the epidemic hit, he had to postpone payments on his Infiniti QX60 car for three months, but began repaying unemployment benefits. After 24 years working in the travel and tourism industry, Scott-White is about to change jobs, because it may still be a long time before the group returns to the previous position.
Lynn Scott-White Tour dealer at her home in Denton, Texas. Image: WSJ.
Last month, the manager gave him the choice between leaving his job and receiving compensation equal to one week of his current salary multiplied by the number of years worked or continuing the leave without pay until at least the end of March of the year following.
He decided to quit altogether, to receive severance pay. Scott-White returned to college to complete a degree in kinetics to pursue a career in sports medicine. She borrowed $ 5,000 from a 401 (k) retirement fund to cover school fees.
Terri Smith, 64, said her firm’s legal cost analysis work was cut during a staff cut. Despite receiving an additional $ 600 per week, unemployment benefits are not enough to make up for the loss of income. And now, the amount he received is only $ 285.
His monthly mortgage payments are $ 1,550, his car payments are $ 550, health insurance is $ 600 a month, and a recent visit cost Smith an additional $ 7,500 out of pocket. He had to use his savings to pay his debts and bills. You are considering withdrawing money from your 401 (k) retirement fund or applying for a deferred loan until you find a job.
“I have no plan. My situation is terrible,” he said. “I’m very worried”.
Steven Sickinger’s revenue dropped significantly this past spring when customers no longer look at the auto repair shop he runs. Fearing the store might close, Sickinger, 55, quit his job and took another job that he deemed safer at a salary of $ 50,000, 35% less than his previous salary of $ 77,000.
Falling wages made it difficult for the Tucson, Arizona man to pay the bills. You have at least $ 24,000 in credit card debt. You haven’t used a credit card in months, but interest and deferred payments are adding to your debt.
8 Sickinger credit cards are in slow payment status. Before translation, since 2014, your credit repayment history is always on time.
His plan is to pay off the debt in about 2.5 years and then plan for retirement. Now, Sickinger says he is in the process of filing for bankruptcy. “I will never get out of this situation,” he said.
Vu hoang (according to the Wall street journal)
