As the end of the year approaches, the Center for the New Middle Class is taking a step back to reflect on how 2020 has impacted non-prime and prime consumers. This year has not been easy on anyone financially, but we wanted to dig deeper into our data to see how these two groups of people have handled the course of the pandemic.
As seen in the graph above, both non-prime and prime consumers have experienced financial hardship during the last year. The number of prime and non-prime Americans experiencing a decrease in their household income dramatically increased since the pandemic began in March. The prime number has even doubled since our pre-COVID research.
Above is another metric we can use to monitor the financial wellbeing of non- prime and prime Americans. Prime consumers in particular experienced running out of money within the past year. The Center for the New Middle Class has gleaned from this data and other similar research, that non-prime and prime consumers both suffered through the financial hardship brought on by COVID but that the non-prime consumers were more equipped to handle it. Non-prime people are accustomed to uncertainty, and they handled the ups and downs of the pandemic with the lessons they learned from other financial hardships. Prime folks were not prepared in the same manner.
An example of how the CNMC sees this dichotomy play out is in the above data. Taking a look at the non-prime consumers, the percentage of people experiencing an extraordinary expense is higher than the prime data pre-COVID, but throughout the pandemic is remained consistent. Prime on the other hand sees a dramatic increase since the onset of the pandemic and remain higher than the non-prime numbers. The non-prime consumers have learned to expect these surprise expenses, whereas the prime folks experienced this difficulty unprepared.