Nearly half of New Yorkers couldn’t cover a $400 emergency expense with cash

Since the Great Recession, social scientists have tried to better understand how American households make ends meet in times of distress. When measuring one’s financial security by whether a respondent has the ability to pay for an unanticipated financial shock, a sizable share of New Yorkers and Americans are living on a financial ledge—one emergency away from not being able to make ends meet. Using Poverty Tracker data, we find that 45 percent of New York City adults would not be able to cover an unanticipated $400 expense with cash and 57 percent of New Yorkers could not cover three months of necessary expenses using their assets.

Unsurprisingly, low-income households and racial minorities are particularly disadvantaged. Only 31% of low-income black New Yorkers and 28% of low-income Hispanic New Yorkers could completely pay for an emergency expense of $400 using cash vs. 63% of low-income white New Yorkers. These findings reveal both a city and a nation in which nearly half of its citizens are unprepared for a modest emergency expense without relying on friends, family, or creditors to help pay the cost.

The Poverty Tracker is a joint project of Robin Hood and Columbia University in the study of disadvantage in New York City.