Key Takeaways

  • While many are expected to experience some degree of financial loss during an extended shut-down of the economy, some groups may be hit harder than others.

  • Minority older adults are more likely to experience significant declines in financial well-being, which exacerbates economic disparities that have existed during most of their working years.

  • In this issue brief, experts analyze economic data from the 2008 downturn to better understand what's at stake for minority older adults during the COVID-19 pandemic.

Since the release of the recent brief Economic Insecurity for Older Adults in the Presence of COVID-10 Pandemic: What can we learn from the most recent major economic downturn?, we know that more than 30 million Americans have filed for unemployment and that for the first time in six years, the U.S. economy contracted with GDP growth falling to the rate of -4.8%.

While older adults suffer declines in net wealth during large and unanticipated economic downturns, as evidenced by the 2008 crisis, minority older adults, specifically, experience significant declines in financial well-being. Not surprisingly, there are major differences both within and across these groups, however the Hispanic population is exepected to experience the most dramatic declines in total net wealth. Their lower and relatively non-growing household income, coupled with higher homeownership rates than African Americans, make them particularly vulnerable to these economic swings.

This issue brief explores the impacts of the 2008 market collapse on the financial status of minority older adults age 60 and over. The purpose is to use that most recent recession experience to better understand what is at stake and the likely magnitude of financial loss that may impact minority older adults as a result of the pandemic-induced market collapse.