SEPT. 14, 2021 — The U.S. Census Bureau announced today 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 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.
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.
Race data refer to people reporting a single race only. Hispanics can be of any race.
Race data refer to people reporting a single race only. Hispanics can be of any race.
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.
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.
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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