Could You Afford A $400 Emergency? Almost Half Of NYers Can't

NEW YORK — Almost half of New Yorkers are just a medical bill, an unexpected repair or a few parking tickets away from a financial crisis, new research indicates.

Some 45 percent of New York City adults say they could not pay for a $400 emergency expense with cash, slightly higher than the national rate of 41 percent, according to a report released Thursday by the Robin Hood Foundation, an anti-poverty nonprofit.

Nearly two thirds — or 63 percent — of those cash-strapped New Yorkers would deal with such a crisis in ways that could hurt their credit, such as putting the expense on a credit card or not paying it at all, researchers found. About a quarter say they would borrow money from a friend or family member to cover the expense, but 30 percent would not be able to pay for it at all, the report says.

The research shows just how common it is for people in one of the nation's wealthiest cities to live on a financial edge.

"The results confirm that a large group of New Yorkers would struggle with even a modest financial shock, let alone a more major setback like the loss of a job or a sustained period without income," Chloe Cargill, the report's lead author, said in a statement.

The report is based on Robin Hood's Poverty Tracker, a regular survey that the organization maintains with the Center on Poverty and Social Policy at Columbia University. It compares the local data with nationwide figures from a Federal Reserve report released last year.

While many New Yorkers struggle with financial emergencies, there's a big racial disparity in their ability to cover such expenses that transcends income, the research shows.

For instance, 63 percent of white, low-income New Yorkers could cover a $400 emergency with cash but the same is true for just 31 percent of black people and 28 percent of Hispanic people in that income group, the report says.

There's a similar pattern among affluent New Yorkers. Some 87 percent of white people in the top income bracket have cash for a $400 emergency, compared with just 60 percent of black people and 57 percent of Hispanic people, according to the report.

The report suggests that just a few hundred dollars could serve as an important financial buffer for New Yorkers. Of those who both couldn't cover an emergency with cash and faced a financial shock such as the loss of a job or benefits, 43 percent struggled with hardships such as an inability to afford food or utilities, according to the report.

But that hardship rate dropped to 27 percent among New Yorkers who faced a financial shock but had enough cash on hand to pay for an emergency, the research found.

"This indicates that having even a modest $400 available in the case of an emergency can protect New Yorkers from facing additional hardships as the result of costly and unexpected life events," the report reads.