When Gallup asked Americans in April about what financial issues they're personally most worried about, consumers placed retirement at the head of the list. (See "Worried About … Retirement?" in Related Items). But given last week's retail sales numbers -- down sharply -- and the increased potential for a double-dip recession later this year (see Related Items), perhaps the most troubling finding of the recent Gallup survey has to do with Americans who are worried about paying their normal monthly bills and their rent/mortgage.
While the recent recession was very mild for the overall economy in a historical sense, like all economic slowdowns, it has had a disproportionately greater negative impact on those who can least afford it. Overall, Gallup poll data* reveal that 30% of all Americans say they are very worried (11%) or moderately worried (19%) about not having enough money to pay their normal bills. The data also show that 22% of all Americans say they are very worried (8%) or moderately worried (14%) about not having enough money to pay their rent/mortgage. By way of comparison, only 15% of all consumers say they are very worried (7%) or moderately worried (8%) about being able to make the minimum payment on their credit cards. In general, those worried about meeting their basic financial obligations include Americans in all age groups surveyed, but the proportions are larger among minority Americans and those with lower incomes.
The fact that economic conditions are placing so much financial stress on such a significant percentage of U.S. households is a serious concern. Of even greater concern, however, are the implications of this stress when coupled with the potential for a double-dip recession. Clearly, economic stagnation or worse later this year has the potential to turn the financial worries of many of these Americans into financial reality. This phenomenon could transform the current mild economic downturn into something resembling an old-fashioned recession. I think business decision-makers should remain cautious even if they still do not feel the double-dip has a significant chance of becoming reality.
Worry Is Higher Among Women, Minorities, and Younger Americans
While a higher percentage of women (33%) than men (26%) say they are moderately or very worried about having enough money to pay their normal monthly bills, a significant percentage of Americans of both genders are concerned. A surprisingly large percentage (50%) of non-white Americans are worried about meeting their basic financial obligations compared to their white counterparts (24%). Also, a significant number of Americans in all age groups surveyed say they are worried about paying their normal monthly bills: 31% of younger Americans aged 18 to 29 say they are moderately or very worried, 32% of those aged 30 to 49, 27% of those aged 50 to 64, and 30% of those 65 and older.
Worry Is Highest in Low-Income Groups
As might be expected, the lowest income group (those making less than $20,000 annually) has the highest percentage (61%) of those worried about having enough money to pay their normal monthly bills. The percentage of those worried about making their normal monthly payments declines as income increases, with those in the highest income group (those making $75,000 or more a year) having the lowest percentage (10%) of those worried.
*Results are based on telephone interviews with 1,003 national adults, aged 18 and older, conducted April 8-11, 2002. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3%.