Gauging Consumers Across Income Brackets

Gauging Consumers Across Income Brackets

How They Differ (and Don’t) as a Pandemic Widens Economic Inequality

Executive Summary

The pandemic’s impact on consumers’ finances varies among income brackets. But it doesn’t fit the narrative of a blue-collar recession that leaves upper-income groups unscathed—and there was already financial fragility across brackets pre-pandemic.

How big are the disparities in income?

Huge, and not just when comparing top vs. bottom brackets. Households in the bottom income quintile make barely one-third as much as those in the next-to-bottom quintile. Those in the top income quintile have more earners than average, so it’s typically not a matter of one person in the household getting a lavish salary.

Have lower-income households been hit hardest by the recession?

Yes, especially since they’ve been most vulnerable to losing jobs. One survey showed more than one-third of low-income households experiencing layoffs. But there has been financial damage in upper brackets, too. Another survey showed more than four in 10 at the $100,000-plus level losing income, including 10% who lost it entirely. It doesn’t help that people at all income levels went into the pandemic with inadequate emergency savings.

How do consumers’ attitudes about their finances vary along income lines?

Less than their actual finances do. There’s more confidence among lower-income consumers and more anxiety among their upper-income counterparts than one might expect. In general, though, there’s more worry among the former than the latter.

How has the pandemic affected spending by different income groups?

Typically making the most discretionary purchases, upper-income consumers have made the biggest spending cuts. Consumers across income brackets have put major purchases on hold.

WHAT’S IN THIS REPORT? This report assesses the financial strength of households in different income brackets and the varying degrees of damage suffered during the pandemic. It also examines differences and similarities in how the crisis is affecting shopping behaviors of consumers with different incomes.

KEY STAT: Consumers across income brackets have postponed major purchases during the pandemic, and many look forward to making those purchases “once things return to normal.”

Here’s what’s in the full report

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Table of Contents

  1. Executive Summary
  2. Unequal Finances, Less-Unequal Anxiety
  3. Auditing Consumers’ Finances Across Income Brackets
  4. Assessing Financial Anxiety (and Confidence)
  1. Familiar and Unfamiliar Patterns in Spending
  2. Key Takeaways
  3. eMarketer Interviews
  4. Read Next
  1. Sources
  2. Media Gallery

Charts in This Report

Interviewed for This Report

Dorothy Advincula
Ipsos
Senior Vice President and US Head of Audience Measurement and Insights
Interviewed August 19, 2020
Jodie Huang
Mindshare
Consumer Insights Manager
Interviewed August 20, 2020
Tony Incalcatera
Ipsos Connect
Senior Vice President, Business and Research Operations
Interviewed August 19, 2020
Julia Wilson
KPMG
Managing Director, Strategy
Interviewed August 18, 2020

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authors

Mark Dolliver

Contributors

Bill Fisher
Senior Analyst
Lucy Koch
Junior Analyst
Jennifer Pearson
VP, Research
Jillian Ryan
Principal Analyst