Here are the states struggling the most financially during the pandemic
·Reporter
September 14, 2020, 12:36 PM CDT
A person’s financial fortune during the pandemic is tied to which state they call home, according to a new analysis.
Americans’ money distress is disproportionately felt across the 50 states and the District of Columbia, according to a study from WalletHub that compares a location’s average credit score, accounts in distress, bankruptcy filings, online searches for “debt,” and the number of loans needed due to the coronavirus.
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Financial difficulties are more pronounced in states like Louisiana, Nevada, Indiana, Oklahoma, and Florida, while those living in Vermont, Montana, Massachusetts, Alaska, and New Hampshire feel less of a financial hit, the data showed.
(Graphic credit: David Foster, Yahoo Finance)
States with more residents in dire financial straits often overlap with those states experiencing high volumes of COVID-19 cases, too, said Jill Gonzalez, a senior analyst at WalletHub, told Yahoo Money.
Among the states with the highest rates of COVID-19 per 1 million residents, five states — Florida, Louisiana, South Carolina, Nevada, and Texas — overlap with the states WalletHub identified as those in the greatest financial distress.
The inverse is also true: Vermont, New Hampshire, Oregon, Montana, and Alaska, which were identified as the least financially impacted, are also among the lowest in the country in terms of infection rate.
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The pandemic is also striking Americans differently based on income, Gonzalez said, which shows up in geography.
Social-distancing measures didn’t derail industries like media, software, and financial services that are based in the Northeast and West and could seamlessly transition to remote work. But for those living in the South and Midwest — where agriculture, machinery, or service are more prevalent — remote work isn’t an option. That’s hurting lower-earners more, because they make up the bulk of workers in those sectors.
Financial difficulties related to COVID-19 are more pronounced in states like Louisiana, Nevada, Indiana, Oklahoma, and Florida, while those living in Vermont, Montana, Massachusetts, Alaska, and New Hampshire feel less of a financial hit, data from WalletHub indicated. (Photo: Getty)
“It's very obvious that the pandemic is more of a problem for those with lower income than higher income,” Gonzalez said, explaining that the ripples can be felt in health care, employment, and personal finance. “The pandemic is driving a wedge even further between socio-economic classes.”
She noted that lower-income Americans are less likely to be insured so they might avoid getting tested, and typically tend to live in crowded homes and neighborhoods where social distancing is non-existent and could unknowingly spread the virus.
“The effects of this financially —unfortunately, more so for those who have lower income — are going to be felt for years to come,” Gonzalez said, “and entire neighborhoods are really going to be set back from this.”
WalletHub ranked each states’ financial distress for its residents from worst to best. The company used six categories to determine its ranking:
Average credit score
People with accounts in distress
Average number of accounts in distress
Change in number of bankruptcy filings from July vs. January
“Debt” search interest index
WalletHub’s “States Where People Need Loans the Most Due to Coronavirus” score
1
Louisiana
2
Nevada
3
Indiana
4
Oklahoma
5
Florida
6
Texas
7
South Carolina
8
Kansas
9
District of Columbia
10
New York
11
Missouri
12
Utah
13
Idaho
14
Kentucky
15
North Carolina
16
Delaware
17
Alabama
18
Georgia
19
Tennessee
20
Wyoming
21
Arizona
22
Hawaii
23
South Dakota
24
Virginia
25
Arkansas
26
Iowa
27
Mississippi
28
Illinois
29
Ohio
30
Pennsylvania
31
New Mexico
32
Wisconsin
33
West Virginia
34
Maryland
35
Michigan
36
Washington
37
Colorado
38
California
39
Rhode Island
40
Maine
41
New Jersey
42
Nebraska
43
Connecticut
44
North Dakota
45
Minnesota
46
Oregon
47
New Hampshire
48
Alaska
49
Massachusetts
50
Montana
51
Vermont
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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