Report: Nearly 60% of Black Americans Would ‘Lose Everything’ In Recession

Almost three years after the COVID-19 pandemic struck, Black Americans are getting mixed outcomes tied to their financial status and economic growth prospects.

Some 54% of Black Americans report their income rose in the past 12 months, higher than 44% of White Americans. At the same time, 58% of Black Americans say they would lose everything if there was a recession, slightly greater than the 55% for Americans overall. Though not specified, “lose everything” could potentially mean such things as savings, stocks/investments, or a home if a person owns one.

The numbers in this new study come from an online survey paid for by Real Estate Witch. Respondents answered several questions that included replies on their economic outlook and expectations for 2023. Real Estate Witch is part of Clever Real Estate, an education platform for homebuyers, sellers, and investors.

Many Black Americans (63%) have a gloomy view of the economy, as they believe the U.S. is now in a recession; 70% reported living paycheck to paycheck. However, Blacks are less pessimistic than all Americans (69%) who said there’s a recession, and (74%) living from one pay period to the next one.

When asked to rank the most- to least-concerning issues, Americans on average listed the economy and inflation, affordable housing, crime/gun violence, abortion/reproductive rights, and climate change. Others included racial issues, as well as COVID-19.

Still, the news is not all bad. Black Americans are more inclined to expect the U.S. economy to rebound in 2023, with 58% believing that versus 51% for Americans overall. And 31% of Blacks are convinced their personal finances will be better 12 months from now, versus 25% for all. About 26% of Black Americans believe the housing market will be better 12 months from now, versus only 18% for Americans all told.

When it comes to coping with a recession,  Clever Real Estate data writer Matt Brannon provided some tips:

• “Prioritize paying off your debt, especially the high-interest credit card debt. If you don’t make a point of tackling this debt, you’re likely to land yourself deeper in debt over time due to interest.”

• “Prepare for layoffs, particularly updating your resume and building an emergency fund. Most people only update their resumes when they’re actively job hunting, but doing so now will allow you to quickly reapply if your current position is made redundant, minimizing income loss. Similarly, save what you can to build an emergency fund, so you have savings to fall back on if you’re unemployed for a few months. Most experts suggest saving enough to cover 3 to 6 months of expenses.” Lack of an emergency fund could increase your risk of going deep into debt to pay necessary bills.

• “Delay large purchases, like a new car. Save money you would use on a large purchase and funnel it into an emergency fund.”

• “Consider delaying your retirement if you are an older worker. Nearly 1 in 3 retirees say they regret retiring too soon. Retiring right as the economy hits a downturn will leave you more vulnerable to rising costs and poor-performing investments.”