SEPT. 12, 2023 — The U.S. Census Bureau announced today that real median household income in 2022 fell in comparison to 2021. The official poverty rate of 11.5% was not statistically different between 2021 and 2022. The Supplemental Poverty Measure (SPM) rate in 2022 was 12.4%, an increase of 4.6 percentage points from 2021. This is the first increase in the overall SPM poverty rate since 2010. Meanwhile, 92.1% of the U.S. population had health insurance coverage for all or part of 2022 (compared to 91.7% in 2021). An estimated 25.9 million or 7.9% of people did not have health insurance at any point during 2022, according to the 2023 Current Population Survey Annual Social and Economic Supplement (CPS ASEC). That compares to 27.2 million or 8.3% of people who did not have health insurance at any point during 2021.
Real median household income fell by 2.3% from $76,330 in 2021 to $74,580 in 2022. Income estimates are expressed in real or 2022 dollars to reflect changes in the cost of living. Between 2021 and 2022, inflation rose 7.8%; this is the largest annual increase in the cost-of-living adjustment since 1981. This year’s report is the first in which the Census Bureau used the Chained Consumer Price Index to adjust prior year income estimates for inflation. You can find more in-depth analysis in our recent Random Samplings blog.
The real median earnings of all workers (including part-time and full-time workers) decreased 2.2% between 2021 and 2022, while median earnings of those who worked full-time, year-round decreased 1.3%. Between 2021 and 2022, the number of full-time, year-round workers increased by 3.4%, compared to a 1.7% increase in the number of total workers. This suggests a continuing shift from working part-time or part-year to full-time, year-round work in 2022.
The official poverty rate in 2022 was 11.5%, with 37.9 million people in poverty. Neither the rate nor the number in poverty was significantly different from 2021. The SPM rate in 2022 was 12.4%, an increase of 4.6 percentage points from 2021. This increase can be attributed to key changes in federal tax policy, including the expiration of temporary expansions to the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) as well as the end of pandemic-era stimulus payments. This is the first increase in the overall SPM poverty rate since 2010.
In 2022, 7.9% of people did not have health insurance at any time during the calendar year. Private health insurance coverage continued to be more prevalent than public coverage, at 65.6% and 36.1%, respectively. Some people may have more than one coverage type during the calendar year. Of the subtypes of health insurance, employer-based insurance was the most common subtype of health insurance, covering 54.5% of the population for some or all of the calendar year, followed by Medicaid (18.8%), Medicare (18.7%), direct-purchase coverage (9.9%), TRICARE (2.4%), and VA and CHAMPVA coverage (1.0%).
These findings come from three Census Bureau reports: Income in the United States: 2022, Poverty in the United States: 2022, and Health Insurance Coverage in the United States: 2022. While the official poverty measure is based on the concept of money income, which is pretax and does not include stimulus payments and tax credits, the SPM is a post-tax and transfer poverty measure. 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).
For consistency with past reports, the income estimates in the “Income in the United States: 2022” report are based on the concept of money income. Appendix B of the income report provides post-tax estimates of median household income and income inequality metrics.
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 provide annual, national estimates of income, poverty and health insurance estimates, collecting information about job status, income and health insurance coverage during the prior calendar year.
Although the 2023 ASEC was collected using standard procedures, response rates are still lower than they were before the pandemic. The response rate for the CPS basic household survey declined from 72.2% in March 2022 to 68.9% in March 2023. Since the response rates remain below pre-pandemic levels, which were regularly above 80%, it is important to examine how respondents differ from nonrespondents, as this difference could affect the accuracy of the estimates. For more details on how sample difference and the associated nonresponse bias impact income and official poverty estimates, refer to the Research Matters blog: “Using Administrative Data to Evaluate Nonresponse in the 2023 Current Population Survey Annual Social and Economic Supplement.”
Race data refer to people reporting a single race only. Hispanic people can be of any race.
Post-tax income is defined as money income net of federal and state income taxes and credits, payroll taxes (FICA), and temporary cash payments administered by tax agencies, like rebates or stimulus payments. In 2022, several tax policies, enacted by the American Rescue Plan Act (ARPA) in 2021, lapsed, including: an expansion of the Earned Income Tax Credit for filers without children and full refundability of the Child Tax Credit and Child and Dependent Care Credit. In 2020 and 2021, most households also received Economic Impact Payments (EIP) that were no longer issued in 2022. The contraction in federal tax programs led to a substantial decline in real post-tax income between 2021 and 2022. Appendix B of the income report compares household median income and inequality measures based on post-tax income.
As defined by the Office of Management and Budget (OMB) Statistical Poverty Directive 14 and updated for inflation using the Consumer Price Index, the weighted average poverty threshold for a family of four in 2022 was $29,678. (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.)
The SPM extends the official poverty measure by accounting for several government programs that are designed to assist low-income families but are not included in official poverty measure calculations. The SPM also accounts for geographic variation in housing expenses when calculating the poverty thresholds and includes federal taxes, state taxes, work expenses, and medical expenses. The SPM does not replace the official poverty measure; however, it does provide a different metric of economic well-being that includes resources from government programs and tax credits to low-income families. In 2022, there were key changes in federal tax policy, including the expiration of temporary expansions to the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) as well as the end of pandemic-era stimulus payments which lead to increases in SPM poverty.
The CPS ASEC asks people about coverage during the previous calendar year. People are considered to be insured if they were covered by any type of health insurance for part or all of the previous calendar year. People are considered uninsured if, for the entire year, they were not covered by any type of insurance. Among the findings:
Regional estimates are available for income, poverty and health insurance coverage in each respective report. There is also a table showing state-level poverty rates using three-year averages.
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/cpsmar23.pdf>.