Well-being

Median household income decreased over $2,000 and the amount of people in poverty rose nearly 1 percentage point between 2019 and 2020, according to the U.S. Census Bureau.

The U.S. Census Bureau announced Sept. 14 that median household income in 2020 decreased 2.9% between 2019 and 2020, and the official poverty rate increased 1.0 percentage point. Meanwhile, the percentage of people with health insurance coverage for all or part of 2020 was 91.4%. An estimated 8.6% of people, or 28.0 million, did not have health insurance at any point during 2020, according to the 2021 Current Population Survey Annual Social and Economic Supplement (CPS ASEC).

Median household income was $67,521 in 2020, a decrease of 2.9% from the 2019 median of $69,560. This is the first statistically significant decline in median household income since 2011.

Between 2019 and 2020, the real median earnings of all workers decreased by 1.2%, while the real median earnings of full-time, year-round workers increased 6.9%. The total number of people with earnings decreased by about 3.0 million, while the number of full-time, year-round workers decreased by approximately 13.7 million.

The official poverty rate in 2020 was 11.4%, up 1.0 percentage point from 2019. This is the first increase in poverty after five consecutive annual declines. In 2020, there were 37.2 million people in poverty, approximately 3.3 million more than in 2019.

Private health insurance coverage continued to be more prevalent than public coverage, at 66.5% and 34.8%, respectively. Some people may have more than one coverage type during the calendar year. Of the subtypes of health insurance, employment-based insurance was the most common subtype of health insurance, covering 54.4% of the population for some or all of the calendar year.

These findings are contained in two Census Bureau reports: Income and Poverty in the United States: 2020 and Health Insurance Coverage in the United States: 2020. For consistency with past reports, the income and poverty estimates in the Income and Poverty in the United States: 2020 report are based on the concept of money income, which is pretax and does not include stimulus payments and tax credits. An appendix to the income and poverty report provides post-tax estimates of median household income and income inequality metrics that do reflect the stimulus payments.

Another Census Bureau report, The Supplemental Poverty Measure: 2020, was also released today. The Supplemental Poverty Measure (SPM) rate in 2020 was 9.1%. This was 2.6 percentage points lower than the 2019 SPM rate. The SPM estimates reflect post-tax income that include stimulus payments. The SPM provides an alternative way of measuring poverty in the United States and serves as an additional indicator of economic well-being. The Census Bureau has published poverty estimates using the SPM annually since 2011 in collaboration with the U.S. Bureau of Labor Statistics (BLS).

All three reports are based on data from the CPS ASEC. The Current Population Survey (CPS), sponsored jointly by the Census Bureau and BLS, is conducted every month and is the primary source of labor force statistics for the U.S. population. It is used to calculate monthly unemployment rate estimates. Supplements are added in most months. The CPS ASEC — conducted in February, March and April — is designed to give annual, national estimates of income, poverty and health insurance numbers and rates. It collects information about income and health insurance coverage during the prior calendar year.

The impact of the coronavirus (COVID-19) pandemic on the CPS ASEC

The Census Bureau administers the CPS ASEC each year between February and April by telephone and in-person interviews, with the majority of data collected in March. In 2020, data collection faced extraordinary circumstances due to the onset of the COVID-19 pandemic as the Census Bureau suspended in-person interviews and closed both telephone contact centers. The response rate for the CPS basic household survey was 73% in March 2020, about 10 percentage points lower than preceding months and the same period in 2019, which were regularly above 80%.

During collection of the 2021 CPS ASEC, for the safety of both interviewers and respondents, in-person interviews were only conducted when telephone interviews could not be done. In March 2021, the response rate for the CPS basic household survey improved to about 76%, though not quite returning to the prepandemic trend. While the response rate improved, it is important to examine how respondents differ from nonrespondents, as this difference could affect income and poverty estimates. Using administrative data, Census Bureau researchers have documented that the nonrespondents in both 2020 and 2021 are less similar to respondents than in earlier years. Of particular interest, for the estimates in this report, are the differences in median income and educational attainment, indicating that respondents in 2020 and 2021 had relatively higher income and were more educated than nonrespondents. For more details on how these sample differences and the associated nonresponse bias impact income and official poverty estimates, refer to our Research Matters blog.

Income

• Median household income was $67,521 in 2020, a decrease of 2.9% from the 2019 median of $69,560.

• The 2020 real median income of family households and nonfamily households decreased 3.2% and 3.1% from their respective 2019 estimates. The difference between the 2019 to 2020 percent changes in median income for family and nonfamily households was not statistically significant.

• Real median household incomes decreased 3.2% in the Midwest and 2.3% in the South and the West from their 2019 medians. The change for the Northeast was not statistically significant. The differences between the 2019 to 2020 percent changes in median household income among all regions were not statistically significant.

• The Gini index is a statistical measure of income inequality ranging from 0.0 to 1.0. It measures the amount that any two incomes differ, on average, relative to mean income. It is an indicator of how far apart or “spread out” incomes are from one another. A value of 0.0 represents perfect equality, and a value of 1.0 indicates total inequality. The money income Gini index was 0.489 in 2020, not statistically different from 2019.

Post-tax income and inequality estimates

In response to the COVID-19 pandemic, Congress passed legislation to aid individuals and families. This legislation included the Coronavirus Aid, Relief, and Economic Security Act (CARES Act); the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA Act); and the Families First Coronavirus Response Act (FFCRA). The CARES and CRRSA Acts provided households with additional income in the form of stimulus payments and tax credits. Given the large scale of the stimulus payments, the income and poverty report includes an appendix which compares household median income and inequality measures based on post-tax income.

• Post-tax, real median household income increased 4.0% between 2019 and 2020.

• The Gini index based on post-tax income fell 3.1% from .442 in 2019 to .428 in 2020.

Race and Hispanic origin

Race data refer to people reporting a single race only. Hispanics can be of any race.

• The 2020 real median incomes of non-Hispanic white, Asian and Hispanic households decreased from their 2019 medians, while the change for Black households was not statistically different. Between 2019 and 2020, median incomes declined 2.7% for non-Hispanic white, 4.5% for Asian, and 2.6% for Hispanic households. However, the differences between the 2019 to 2020 percent changes in median household income among the race groups were not statistically significant.

Earnings

• In 2020, real median earnings of those who worked full-time, year-round increased 6.9% from their 2019 estimate. Median earnings of men ($61,417) and women ($50,982) who worked full-time, year-round increased by 5.6% and 6.5%, respectively. The differences between the 2019 to 2020 percent changes in median earnings among all full-time, year-round workers; male full-time, year-round workers; and female full-time, year-round workers were not statistically significant.

• The real median earnings of all workers age 15 and over with earnings decreased 1.2% between 2019 and 2020, from $42,065 to $41,535.

• The total number of those who worked full time, year-round declined by 13.7 million between 2019 and 2020. This was the largest year-to-year decline in the number of full-time, year-round workers since 1967, the first year for which there is comparable data. The number of female full-time, year-round workers decreased by about 6.2 million, while the decrease for their male counterparts was approximately 7.5 million.

Poverty

• As defined by the Office of Management and Budget (OMB) and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2020 was $26,496. (Refer to <www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-thresholds.html> for the complete set of dollar value thresholds that vary by family size and composition.) (OMB determined the official definition of poverty in Statistical Policy Directive 14).

• The official poverty rate in 2020 was 11.4%, up 1.0 percentage point from 2019 This is the first increase in poverty after five consecutive annual declines.

• In 2020, there were 37.2 million people in poverty, approximately 3.3 million more than in 2019.

• Between 2019 and 2020, poverty rates increased for married-couple families and families with a female householder. (In the income and poverty report, families with a female householder with no spouse present are referred to as families with a female householder. Families with a male householder with no spouse present are referred to as families with a male householder.)

• The poverty rate for married-couple families increased from 4.0% in 2019 to 4.7% in 2020.

• For families with a female householder, the poverty rate increased from 22.2% to 23.4%. The poverty rate for families with a male householder was 11.4% in 2020, not statistically different from 2019.

Race and Hispanic origin

Race data refer to people reporting a single race only. Hispanics can be of any race.

• Between 2019 and 2020, the poverty rate increased for the non-Hispanic white and Hispanic populations.

• Among the non-Hispanic white population, 8.2% were in poverty in 2020, while the Hispanic population had a poverty rate of 17.0%. Among the major racial groups examined in this report, the Black population had the highest poverty rate (19.5%), but did not experience a significant change from 2019. The poverty rate for the Asian population (8.1%) in 2020 was not statistically different from 2019. The 2020 poverty rates for the Asian and non-Hispanic white populations were not statistically different.

Age

•Poverty rates for people under the age of 18 increased from 14.4% in 2019 to 16.1% in 2020. Poverty rates also increased for people ages 18 to 64 from 9.4% in 2019 to 10.4% in 2020. The poverty rate for people ages 65 and older was 9.0% in 2020, not statistically different from 2019.

Supplemental Poverty Measure

The SPM extends the official poverty measure by taking into account many of the government programs designed to assist low-income families and individuals that are not included in the current official poverty measure, such as the stimulus payments enacted as part of economic relief legislation related to the COVID-19 pandemic.

Additionally, the SPM deducts necessary expenses for critical goods and services from income. Deducted expenses include taxes, childcare, commuting expenses, contributions toward the cost of medical care and health insurance premiums, and child support paid to another household. The SPM permits the examination of the effects of government transfers on poverty estimates. The SPM does not replace the official poverty measure and is not used to determine eligibility for government programs.

While the official poverty measure includes only pretax money income, the SPM adds the value of in-kind benefits, such as the Supplemental Nutrition Assistance Program (SNAP), school lunches, housing assistance, stimulus payments and refundable tax credits.

• The SPM released Sept. 14 shows that in 2020, the overall SPM rate was 9.1%. This was 2.6 percentage points lower than the 2019 SPM rate.

• The SPM rate for 2020 was 2.3 percentage points lower than the official poverty rate of 11.4%. This is the first time in the history of the SPM where poverty is lower using the SPM than the official poverty rate.

• The 2020 SPM rate of 9.1% was the lowest rate since estimates were initially published for 2009.

• Social Security continued to be the most important antipoverty program, moving 26.5 million individuals out of poverty.

• Unemployment insurance benefits, also expanded during 2020, prevented 5.5 million people from falling into poverty.

• Stimulus payments, enacted as part of economic relief legislation related to the COVID-19 pandemic, moved 11.7 million persons out of poverty. For example, not including stimulus payments in resources, the poverty rate for all people would have been 12.7% rather than 9.1%.

• There were 11 states plus the District of Columbia for which SPM rates were higher than official poverty rates, 30 states with lower rates, and 9 states for which the differences were not statistically significant.

Age

• SPM rates were down for all major age categories: children under age 18, adults ages 18 to 64, and adults age 65 and older between 2019 and 2020.

Health insurance

In previous years, the Census Bureau released estimates of health insurance from two surveys. The CPS ASEC asks people about coverage during the previous calendar year. The American Community Survey (ACS) asks people to report their health insurance coverage at the time of interview. However, this year’s report relies solely on data from the CPS ASEC because of impacts of the COVID-19 pandemic on the 2020 ACS.

• In 2020, 8.6% of people, or 28.0 million, did not have health insurance at any point during the year. The percentage of people with health insurance coverage for all or part of 2020 was 91.4%.

• In 2020, private health insurance coverage continued to be more prevalent than public coverage at 66.5% and 34.8%, respectively. (Some people may have more than one coverage type during the calendar year.). Of the subtypes of health insurance, employment-based insurance was the most common subtype, covering 54.4% of the population for some or all of the calendar year.

• Between 2018 and 2020, the rate of private health insurance coverage decreased by 0.8 percentage points to 66.5%, driven by a 0.7 percentage-point decline in employment-based coverage to 54.4%.

• Between 2018 and 2020, the rate of public health insurance coverage increased by 0.4 percentage points to 34.8%. In that time, there was a 0.5 percentage-point increase in Medicare coverage. This increase was due to growth in the number of people age 65 and over. The proportion of the population 65 years and older with Medicare coverage decreased between 2018 and 2020 from 93.9% to 93.5%. However, the percentage of the U.S. population 65 years and older increased between 2018 and 2020.

• In 2020, 87.0% of full-time, year-round workers had private insurance coverage, up from 85.1% in 2018. In contrast, those who worked less than full-time, year-round were less likely to be covered by private insurance in 2020 than in 2018 (68.5% in 2018 and 66.7% in 2020).

•More children under the age of 19 in poverty were uninsured in 2020 than in 2018. Uninsured rates for children under the age of 19 in poverty rose 1.6 percentage points to 9.3%.

Regional estimates are available for income, poverty, SPM and health insurance in each respective report. There is also a table showing state-level poverty rates using the supplemental poverty measure.

The CPS ASEC is subject to sampling and nonsampling errors. All comparisons made here and in each respective report have been tested and found to be statistically significant at the 90% confidence level, unless otherwise noted.

Additional information on the source of the data and accuracy of the income, poverty and health insurance estimates is available at https://www2.census.gov/programs-surveys/cps/techdocs/cpsmar21.pdf.

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