81% see financial insecurity as a major issue: Survey

Commonwealth Executive Director and Co-founder Timothy Flacke joins Yahoo Finance's Zack Guzman to discuss a new survey which reveals how Americans view financial insecurities and how the federal government can tackle these issues.

Video Transcript

ZACK GUZMAN: I want to dig into the financial insecurity we're seeing play out across this country. An interesting new survey on that front points out that some of these issues may have been around before the pandemic was even here, with 81% of Americans saying that financial insecurity was a major problem pre-2020. And even as the Bureau of Labor statistics data that we've been getting here before-- obviously, we're dealing with quite the unemployment surge right now-- but before, when it was back around 4%, up to 78% of Americans were still living paycheck-to-paycheck. So what's that say about the issues we're seeing play out right now?

Here to discuss is Timothy Flacke, Commonwealth Executive Director and Co-Founder. And Tim, I mean, when we dig into this-- I just want to deliver the update, too, because that already sounds bad from a starting point. But a new Reuters and Ipsos poll pointing out now that three out of every ten Americans who have lost work during this pandemic say that they have some serious issues when it comes to paying for basic necessities, whether that be rent or food, now that we've seen that additional $600 a week in unemployment benefits roll off.

So why is it so important to get this done if so much of this pain was already there?

TIMOTHY FLACKE: Yeah, I mean, I think you already hit the headline. It's just astounding to us that, as you say, even before the events of 2020, 81% of us are worried about this issue. And we define financial insecurity just the way you did, really living paycheck-to-paycheck.

So if that's the baseline-- and as you say, now tens of millions of us are unemployed. I think we just-- this is a huge, huge issue. And I'm not sure that we fully understand how many of us are worried about our finances. So it just underscores this is an issue that needs attention.

ZACK GUZMAN: I think that's also why it becomes another good reminder as to why it matters that we're seeing this delay in Washington right now. And when we think about who is responsible to solve this problem, you guys also dug into that in this report. Two different things to break down there. I want to start with the amount of people saying that financial institutions should be playing a larger role. 58% in your survey said that should be true.

And, I mean, it's fair to point out, we're talking about stimulus checks and things getting nixed-- skimmed off the top. We can talk about overdraft fees, where in this country it might be free to trade stock. So how much do you think should be changed when we think about financial institutions playing a larger role here in the responses you got in your survey?

TIMOTHY FLACKE: Yeah, well, I think the key thing is what we heard from from Americans, right? We talked to 2,000 people. And what we were really struck by is that only 30% of our survey respondents said this is really about personal choices.

And we hear that a lot. If we ordered less expensive coffees, we would be more financially secure. But again, pre-2020, 70% of our respondents said this is about forces that are bigger than me. So that takes us right back to your point.

Then we said, well, who are those forces? And financial institutions, the financial services industry, that was a big one. Another one was our employer. 65% of our respondents said our employers need to do more to help us. And 55% of us pointed to the government.

So I think the message here is people are saying I can't solve this on my own. There's a limit on where I can get in just the choices I make. I need some of these systems and institutions to step up and help.

ZACK GUZMAN: Yeah, that's a trend, at least on the employer front, we've been talking about for a while. We've seen a push to raise the federal minimum wage come through here as well, when we talk about a living wage, $15 an hour at some companies, notably Amazon. But it's probably no surprise why we've seen this new push here being led by Democrats to kind of push for a lot of those things, including more unemployment benefits, here in these current negotiations.

But I want to highlight that in your survey, over 50% believe the government should be doing more to help as well. And on that front, I mean, it's kind of this weird dichotomy, when we see the gap broken down by age in your survey, when you think about younger Americans endorsing government doing more, about 90% versus 69% for those aged 60 to 69. So clearly, a big gap there. A similar dichotomy for whites and Blacks in this country.

So maybe just put that into context here, when we see this same battle playing out right now between Republicans and Democrats as to why the government maybe should or should not be doing more to help on the financial insecurity front.

TIMOTHY FLACKE: I mean, I guess what I can say is it shouldn't surprise us that people's experience influences their perspective. So there is a lot of research that points out that the millennial generation has had a much harder path to go down in terms of their personal financial well-being. And there's overwhelming evidence that if you are Black or Latinx in this country, it is a much harder path to go down.

The statistic that just can't be repeated enough is the difference in wealth is ten to one, Black households to white households. So I think that we see that, then, in people's expectations about who has a role to play. It just makes sense. Your perspective influences how you look at the issue.

ZACK GUZMAN: And obviously, I mean, you're speaking to, I guess, what some might consider to be a pretty important piece of the Democratic base. And obviously, we got the update there that the Democratic nominee Joe Biden had selected Senator Kamala Harris as his running mate. She's obviously talked about a lot of these issues on the campaign trail when she herself was a presidential candidate, talking about the issues of minimum wage and talking about the issues here in health coverage.

How much do you think that that conversation is bolstered here now that Joe Biden selected her in pushing for some of those things?

TIMOTHY FLACKE: Yeah, I mean, I guess what I would say is when you've got 81% of the country and worried about an issue, it doesn't really matter whether you're a Republican or a Democrat. You have to be talking about this. And the tools that the different administrations will reach for first may differ.

But I think the key headline is you really can't afford, as a leader in this country in the private sector or the public sector, not to understand how many of us are living in chronic financial anxiety, and to do something to push us towards a place where there's just more health to try and build that financial security.

ZACK GUZMAN: Yeah, and as your report shows, it was already a problem, obviously made a lot, lot worse when we talk about millions of Americans now out of a job. But Timothy Flacke, Commonwealth Executive Director and Co-Founder, appreciate you bringing us those insights.

TIMOTHY FLACKE: Thanks.

ZACK GUZMAN: I also want to note, too, that that last segment was part of our Funding our Future segment and specialty here on "The Ticker." Funding our Future, of course, an alliance of organizations dedicated to making a secure retirement possible for all Americans. And that's why we like to focus in on these issues as well.