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COVID-19 Impact

Study: Red States Under More 

Financial Distress Than Blue States


By Steve Rensberry 
RP News
_____________

   EDWARDSVILLE, Ill. - (RP NEWS) - 9/17/2020 - Gauging the overall financial impact of the COVID-19 pandemic on Americans across the country has been a difficult but not impossible task. One recent study, by the financial enterprise WalletHub, provides some insight.

Released last week, among the key findings was that people in “Red States” -- defined as those states that voted for President Donald Trump in 2016 -- were suffering more financial distress than those in “Blue States.”

According to Financial Writer Adam McCann, the company used nine key metrics, such as average credit score, change in the number of bankruptcies between January and July, and the percentage of people with “accounts in distress,” which it defined as being either in forbearance or has its payments deferred.

“The COVID-19 pandemic is one of the biggest public health crises the U.S. has ever faced, but it has been almost as devastating to Americans’ finances as it has to their health,” McCann writes. “Between hospital bills and sky-high unemployment, the pandemic has put millions of Americans in financial distress. While the CARES Act helped mitigate some of that damage earlier in the year, the lack of a new bipartisan deal has left many people wondering how they will meet their financial obligations.”


Where Illinois stands in key categories: 
  • Change in Credit Score - August vs. January - 36th
  • Change in the share of people with accounts in distress: Aug vs. Jan. - 7th
  • Change in the Average No. of Accounts in Distress - August vs. January - 15th
  • Change in Number of Bankruptcy Filings - July vs. January - 42nd
  • “Debt” Search Interest Index' Rank - 26th
  • WalletHub “States Where People Need Loans the Most Due to Coronavirus” Score - 20th

Researchers determined the weighted average across each of the metrics to derive an overall score for each state, with the smaller the number, the more financially distressed people were in that state. Data sources included the American Bankruptcy Institute, Google Trends, and WalletHub data.

To view the full report and metrics for each state, see: Financial Distress Study