With 10.7 million Americans still unemployed and nearly 69% of people saying they would have difficulty meeting their financial obligations if their next paycheck were delayed for a week, WalletHub today released updated rankings for the Cities in the Most Financial Distress During COVID-19.
In order to take a deeper look into where people are struggling the most financially, WalletHub compared the 100 largest cities without data limitations across nine key metrics. Our data set includes factors like the change in the number of bankruptcy filings between September 2019 and September 2020, the average credit score and the share of people with accounts in distress.
Texas cities accounted for 5 out the 10 most distressed cities:
|
Most Distressed |
Least Distressed |
|
1. Las Vegas, NV |
91. Newark, NJ |
|
2. Phoenix, AZ |
92. Boise, ID |
|
3. Chicago, IL |
93. Irvine, CA |
|
4. Miami, FL |
94. Lincoln, NE |
|
5. San Antonio, TX |
95. Boston, MA |
|
6. Los Angeles, CA |
96. Scottsdale, AZ |
|
7. Fort Worth, TX |
97. Anchorage, AK |
|
8. Houston, TX |
98. Madison, WI |
|
9. Dallas, TX |
99. Jersey City, NJ |
|
10. Austin, TX |
100. Fremont, CA |
How are cities’ economies linked to people’s well-being?
“If the economy in a city is not doing well, there are fewer opportunities for residents to get a job and become financially successful. This is especially true during the COVID-19 pandemic, as many cities have been forced to institute lockdowns. This impacts key non-essential businesses in the city, such as the tourism industry or sit-in dining, and in turn leads to higher unemployment when businesses must shutter their doors,” said Jill Gonzalez, WalletHub analyst. “The loss of a job, or at least loss of revenue, caused by a diminished city economy can cause people to fall into financial distress. It doesn’t even take a long disruption to hurt people’s well-beings, either – over two thirds of Americans would have trouble meeting their financial obligations if their next paycheck were delayed by just one week.”
How does the closure of schools contribute to financial distress?
“Closing schools increases the number of people in financial distress because it removes the normal supervision of children during the day and places that burden on parents. Parents, especially those with younger children, may have to stay home from work or hire childcare as a result. Households where both parents work may see a sudden drop in income, but the hardest-hit households will be those with single parents,” said Jill Gonzalez, WalletHub analyst. "If it is feasible, businesses should let parents work from home when their children have to do online schooling. The government should also help schools reopen faster by adopting widespread rapid COVID-19 testing, which will prevent infection within schools while giving students the in-person learning they desperately need.”
