Thanks to economic pain inflicted by the COVID-19 pandemic, Americans saw their first significant decline in household income in nearly a decade last year.
According to U.S. Census Bureau data released recently, 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,” the report states.
“This is the first statistically significant decline in median household income since 2011”
U.S. Census Bureau report
The annual assessment of the nation’s financial wellbeing offers insight into how households fared during the pandemic’s first year, which prompted the government to provide aid to help keep millions of Americans from falling into poverty.
The report presents data on income, earnings, income inequality, and poverty in the U.S. based on information collected in the 2021 and earlier Current Population Survey Annual Social and Economic Supplements (CPS ASEC) conducted by the Census Bureau.
The 2020 real median incomes of family households and nonfamily households decreased 3.2% and 3.1% from their respective 2019 estimates.
The 2020 real median household incomes of non-Hispanic Whites, Asians, and Hispanics decreased from their 2019 medians, while the changes for Black households was not statistically different.
In 2020, 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 real median earnings of all workers aged 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 13.7 million between 2019 and 2020. 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.
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%.
The official poverty rate in 2020 was 11.4%, up from 10.5% in 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.
Due to the COVID-19 pandemic and the U.S. government’s policy response to it, roughly six in 10 Americans paid no federal income tax last year.
According to an Aug. 18 report from the Urban-Brookings Tax Policy Center (TPC), nearly 107 million households, or about 61%, owed no income tax or even received tax credits from the government.
SEE ALSO:
• ‘Eye-Popping’ Percentage of Americans Paid No Federal Income Tax Last Year
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
