Pattie Lovett-Reid: Report finds economic disparities growing amid COVID-19

The rich are getting richer and the poor are getting poorer. 

It’s hard to believe we are in the seventh month of economic disruption due to COVID-19. And as time marches on, the disparities between those who have and those who have not are becoming more evident. 

The latest MNP Consumer Debt Index highlights what is now being referred to as a "K"-shaped recovery.

“While some are fortunate enough to be able to continue working in their present jobs, but from home, others continue to struggle with financial uncertainty and not knowing whether their job will still be around after the pandemic,” Grant Bazian, president at MNP Ltd., said in a release Tuesday.

As government benefits wind down, mortgage deferrals dry up and creditors come calling those earning less than $40,000 a year, renters, women and millennials are the most likely to say their current debt situation is worse than it was in the past. According to the research, these cohorts are at higher risk of insolvency. 

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In fact, 57 per cent of renters say they are $200 or less away from insolvency. By contrast, 36 per cent of homeowners say the same. 

Generation Z seems to be the most deeply impacted after losing out on summer employment. A whopping 69 per cent say they are $200 or less way from insolvency. 

There was an initial feeling that we were in this together; however, we are not. As bills continue to mount and debt levels soar, 43 per cent of those surveyed – the second-highest level on record for this metric since 2017 – are worried about their current level of debt.

We realize once again the key distinguishing factor around financial survival is the ability to work. Understandably, four in 10 are still worried about whether either they or someone in their household could lose their job. 

One thing we can all agree on: These are unprecedented times and a solution to your financial survival is not a cookie-cutter approach, nor does one size fit all. As MNP suggests, tailor your solution. This may include budgeting, refinancing, liquidating, consolidation of debt and on the rise consumer proposals and even as a last resort bankruptcy. 

There are options to explore.