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‘Don’t have any backstop’: Americans hit hard by layoffs worry about homelessness

Denitsa Tsekova
·Reporter
·3 min read

Not long after Tommy Leak moved cross-country to Vista, California, to start as a music industry talent scout, he lost what he called the “break” of his career because of the coronavirus pandemic.

Now the 25-year-old’s worried about keeping a roof over his head.

“I was shocked,” Leak told Yahoo Money. “When I heard I was getting laid off, my first thought was, well, I have an apartment lease.”

With unemployment claims at historic highs as the pandemic grounds the economy to a halt, many Americans are struggling with diminished savings, unpaid bills, and worries over homelessness, according to a new study from Varo Money shared exclusively with Yahoo Money.

FILE - In this March 18, 2020 file photo, visitors to the Department of Labor are turned away at the door by personnel due to closures over coronavirus concerns. The coronavirus pandemic has already hurt many households financially.  Americans have been hit with layoffs, furloughs and reduced hours across the country. Those who have not are still facing massive economic uncertainty. Experts say it's more important than ever to manage your budget, reach out to lenders and seek protections available to those hit by the economic impact of the virus. (AP Photo/John Minchillo, File)
March 18, 2020, visitors to the Department of Labor are turned away at the door by personnel due to closures over coronavirus concerns. (AP Photo/John Minchillo, File)

‘Don’t have any backstop’

One in 4 renters who lost a job or income due to the COVID-19 outbreak worry they could become homeless, while 1 in 7 homeowners with a mortgage said the same, the survey of 1,234 lower and middle-class Americans earning up to $75,000 found.

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Among the renters who have lost their income, 2 in 5 expect to make their rent for a maximum of three to four weeks and 1 in 4 expect to be able to afford their rent for one to two months.

Read more: Coronavirus: Here's what to do if you can’t pay rent

“Many of these people actually fear if they will be able to cover the rent, and homelessness is becoming a real issue,” Varo Money’s CEO Colin Walsh told Yahoo Money. “We're talking about people that do not have emergency savings, they really don’t have any backstop.”

‘Start getting the resume ready’

Varo found that 43% of the survey respondents have already lost their job or had reduced wages because of the economic fallout from the pandemic. Another 36% expect a decrease in income the coming weeks.

Over 60% of middle class Americans said they feel depressed, stressed out, or afraid when thinking about their financial situation in the coming months.

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Varo found that 43% of the survey respondents have already lost their job or had reduced wages because of the economic fallout from the pandemic. Another 36% expect a decrease in income the coming weeks. (Source: Varo)

Of those who report less income or lost job, almost 6 in 10 are renters, while 3 in 10 are homeowners.

Read more: Coronavirus: How to find a job in a tough economy

Many are also on the financial edge. One in 6 said they don’t have enough money to cover basic expenses like rent or food, while 2 in 6 said those are the only expenses they can cover.

For Leak, he has limited savings and is relying on some help from family. Because he’s still young, he remains under his parents’ medical insurance. His age group, 18 to 29, also ranked second when it comes to job losses, the survey found.

“You know, it’s a hard industry to break into. This was the break I got out here for my career,” said Leak, who was a bartender before. “I’ll start getting the resume ready.”

Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.

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