(123)456 7890 [email protected]

How the government shutdown affected the finances of federal workers

2019-02-12 16:00:00

Researchers have been warning for years that many Americans don't have the emergency savings to deal with even a relatively short income disruption. Few events have provided a clearer field test of that assessment than the recent 35-day partial government shutdown.

To learn more about the effect of the closure on the financial health of federal employees and their households, and to help employers and policymakers consider ways to help Americans solve the financial challenges of our changing world, Prudential Financial surveyed more than 350 federal employees and contractors who went unpaid during the shutdown. The findings complement the results of Prudential & # 39; s Financial Wellness Census 2018, dividing the country almost evenly between those who are financially healthy and those who struggle to meet the current cost of living and save long-term goals.

Despite federal workers having a higher percentage of emergency savings than U.S. workers as a whole, the survey found:

Almost half of the respondents in the survey were behind on their accounts during the close. More than a quarter missed a mortgage or rent payment.

Almost a quarter cut or eliminated health or medical expenses for themselves or family members.

More than 80 percent said their overall stress level peaked, and half said they became "much more stressed."

In most cases, federal workers burned most or all of their savings.

While the survey highlights the impact of the government shutdown – an unprecedented event – on some of the U.S. workforce, for the average American, an income disruption could be the result of something much more common, such as a job loss, an injury, physical or mental health problem or even pregnancy.

An estimated 51 million working adults in the US do not have disability insurance other than basic coverage available through Social Security, which does not cover most of the challenges that workers are likely to face; and 63 percent of Americans cannot handle a $ 500 emergency.

“The recent government shutdown is a wake-up call for Americans and shows how vulnerable people are to income volatility,” said Jamie Kalamarides, president of Prudential Group Insurance. "Our survey highlights the need for emergency savings as well as the forms of insurance available in the workplace, such as disability insurance, that can help Americans protect their income when unexpected events arise."

Click here to view the full report, “Financial Fragility PDF opens in a new window

Leave a Reply

Your email address will not be published. Required fields are marked *