One in 3 American families couldn’t handle a mid-sized financial emergency before the pandemic, according to a report from the Stanford Center on Longevity and the Global Financial Literacy Excellence Center.

Roughly 27% of American families couldn’t cover an unexpected $2,000 expense within a month, and 33% were struggling to make ends meet in January 2020, directly before the Covid-19 pandemic, the report shows.   

The report looked at Americans’ financial resilience since the Great Recession, measured by someone’s ability to handle a $2,000 expense, total debt and emergency savings.

Although insecurity has been widespread, it’s more prevalent among women, Black and Hispanic Americans, individuals aged 30 years to 44 years old and those with less education, the analysis shows. 

Those with low levels of financial resilience were slower to recover from the Great Recession than the general population, contributing to wealth gaps and economic inequality, according to the report. 

“While college graduates experienced faster job and income growth, these vulnerable groups recovered more slowly,” said Jialu Liu Streeter, co-author and research scholar at the Stanford Center on Longevity.

While the pandemic is still ongoing, there have already been signs of an unequal recovery among workers.

For example, a Stanford Center on Longevity survey from December 2020 found non-standard employees — part-time, on-call, temporary, self-employment and gig workers — were less likely to have job security, emergency savings, retirement plans and adequate insurance.

However, other surveys have shown workers who didn’t lose their jobs have boosted their savings since the start of the pandemic.

Still, many workers may now be benefiting from federal aid. There may be a drop in poverty in 2021 due to government programs, such as stimulus checks, child tax credits, food assistance and more, the Urban Institute projects.

Vulnerable groups may recover from economic downturns more slowly, and the report proposes four ways to address these shortfalls: boosting income, reducing debt, expanding risk protection and increasing financial literacy. 

Those living below the poverty line may struggle to set aside $2,000 for an emergency, and the report suggests gig economy work as a flexible or temporary option to boost income.

However, the report also says these jobs may lack protections, such as employee benefits. 

While those with less education typically have lower financial resilience, the report showed those with high student loans were also vulnerable. 

“Research has shown student loans delay home buying, planning for a marriage or starting a family,” Streeter said. 

College students may need to compare their student debt to earnings potential to minimize the burden, she said.

Another shortfall is health insurance, and the report shows Hispanic Americans are least likely to have their entire family covered.

However, families may not realize they may qualify for free or reduced premiums through Healthcare.gov. Fall open enrollment begins Nov. 1, 2021.   

Although financial literacy has been a challenge, more states are adding high school classes, and some workers may improve their education through workplace financial wellness programs, Streeter said.

The Stanford Center on Longevity and the Global Financial Literacy Excellence Center used panel data from before and after the Great Recession to measure its impact and recovery across different groups. The report is funded by the Financial Industry Regulatory Authority Investor Education Foundation.