About half of Harris County residents unable to pay an unexpected $400 bill

RESEARCH :  Jun. 28, 2024

Stack of money

Photo by Giorgio Trovato on Unsplash

An increasing number of Harris County residents are unable to readily come up with $400 to cover an unexpected expense — such as replacing tires worn out from crumbling roads, replacing a refrigerator full of food after the electricity is knocked out for a couple of days, or having a kid get sick or injured and needing to make a visit to an urgent care facility.

According to the 2024 Kinder Houston Area Survey, 46% of respondents said they would not be able to pay for such an expense, the highest percentage recorded by the survey since the question was first asked in 2019. Not only is this number high, it’s been rising steadily over the last couple of years, with a low of 29% in 2022 followed by a jump to 42% in 2023 before hitting the new high mark in this year’s report.

This post is part of a series highlighting the findings from the 2024 Kinder Houston Area Survey.

The increasing number of Harris County residents unable to make a $400 emergency payment follows the end of the COVID-19 public health emergency — which brought an end to programs and services created to support families during the pandemic.

“The increase is almost certainly a reflection of the economic security that was provided to households during the pandemic by increased unemployment benefits and the stimulus payments that went out to residents a couple of times,” said Dan Potter, senior director of research for the Kinder Institute for Urban Research and lead researcher for this year’s Kinder Houston Area Survey. “While the start of the pandemic was incredibly rocky and economically disastrous for so many individuals and families in the Houston area and beyond, the economic programs put into place by the federal government offered households a sense of financial security they’d never had before and potentially since.”

With no more economic impact payments, expanded unemployment benefits, child tax credits or emergency rental assistance, many families and households find themselves unable to afford basic expenses. During the pandemic, unemployment benefits reached $600 per week for some, which was the equivalent of a yearly salary of more than $30,000, Potter explained. For many people, such as teaching assistants, phlebotomists, in-home caregivers — anyone making less than $15/hour — that equated to a pay raise.

“These benefits provided families and households with a new sense of financial security, which gave them the sense that they could come up with $400 if they needed to in an emergency,” Potter said. “Those benefits are gone, and people have returned to work, but they are not finding themselves feeling those same levels of security, which may partly be explained by both the types of jobs that returned to Houston following the pandemic as well as the role of inflation in shrinking people’s buying power for much of 2022 and 2023.”

What about the U.S.?

The percentage of residents in Houston and Harris County saying they could not cover an unexpected $400 expense is higher than that of the U.S. as a whole. According to the Federal Reserve System Economic Well-Being of U.S. Households in 2023 report released in May, 37% of survey respondents from across the country reported being unable to cover such an expense.

While the Federal Reserve has asked the question since 2013, the national trend over the past few years reflects very closely the trend for the Houston area.

For example, the percentage of U.S. residents saying they could not cover a $400 emergency expense dropped to an all-time low of 32% in 2021 before increasing in 2022 and 2023. Since data for the Kinder Houston Area Survey is collected every year in January, respondents are often reporting about experiences and conditions in the prior year. The low point of 29% of Houston-area residents saying they could not afford such an expense in 2022 reflects experiences from the same time period as the 2021 data reported by the Federal Reserve.

In both Houston and the nation, the unemployment benefits and stimulus checks seem to have had the benefit of creating a sense of financial security. But now that they’re gone, an increasing number of residents are uncertain about their ability to cover an emergency expense.

One reason for this year’s difference between Houston’s percentage (46%) and that of the U.S. overall (37%) may be Harris County’s higher poverty rates and lower incomes relative to the nation as a whole.

“The overall U.S. poverty rate in 2023 was 11.5% and during the same year was 16.4% in Harris County,” Potter said. “In 2022, the median household income in the U.S. was $74,580 while in Harris County it was $68,748. More people are in poverty and overall people are earning less in Houston than elsewhere around the country, setting up our area and its residents to have a slightly steeper climb towards that sense of financial security.”

$400 and inflation

Pandemic-era programs that created a sense of financial security for some have been over for more than a year, yet the percentage of people reporting being unable to cover an emergency $400 expense continues to tick up. Contributing factors may be higher prices and inflation.

For example, in the Houston area, a $400 expense in 2019 would be more than $490 today, an increase of 22.6%. Houston is not alone in terms of big cities experiencing rising costs and inflation:

• Dallas-Fort Worth: $500.06 today, a cumulative change of 25.01%

• Tampa, Florida: $512.43, cumulative change of 28.11%

• Phoenix: $502.37, cumulative change of 25.59%

• San Diego: $492.09, cumulative change of 23.02%

As people have returned to work, the buying power of their earned dollar has diminished, eating away at their ability to feel secure and confident in being able to cover unexpected emergency expenses.

Financial security has implications for mental and physical health and can be handed down through generations. The pandemic proved there are ways to create a greater sense of security across wide swaths of the population. Now, novel efforts are needed to provide people with resources to create greater financial security so they can live in the comfort of knowing that a broken-down car, sick kid or extreme weather event isn’t going to result in a household crisis.

KHAS 2024 report cover
Kinder Houston Area Survey: 2024 Results
May. 20, 2024

The 43rd annual Kinder Houston Area Survey provides an unparalleled look at current conditions in the region as well as the “Houston of Tomorrow.”

City of Houston skyline
After getting the lights back on, what’s Houston’s biggest problem going forward?
RESEARCH :  May. 20, 2024

Over the course of about four weeks early in 2024, residents across Harris County were asked their opinions on a variety of topics as part of the Kinder Houston Area Survey. That includes a question that has been asked every year since the survey’s founding in 1982: “What would you say is the biggest problem facing people in the Houston area today?”

It a question of when, and not if, that artificial intelligence makes an impact on Houston's workforce.
How can Houstonians keep up — and keep their jobs — in the rapidly evolving AI landscape?
PERSPECTIVES :  May. 28, 2024

About 6 out of 10 residents expect the rise of artificial intelligence to have a major impact on Houston’s workforce in the near future, according to the 43rd Kinder Houston Area Survey.



Mailing Address

6100 Main St. MS-208
Houston, TX 77005-1892

Subscribe to our e-newsletter

Physical Address

Rice University
Kraft Hall
6100 Main Street, Suite 305
Houston, TX 77005-1892

Featured Sponsor

Support the Kinder Institute