Stimulus Payments, Other Programs Kept Millions of People Out of Poverty in 2020

A set of three reports from the United States Census Bureau—Income and Poverty in the United States: 2020, Health Insurance Coverage in the United States: 2020, and The Supplemental Poverty Measure: 2020—examine trends in household income and the important effects of social welfare programs in 2020. Median household income fell from $69,560 in 2019 to $67,521 in 2020. Using the official poverty rate, the number of people in poverty increased by 3.3 million, representing a one percentage point increase to a rate of 11.4%. At the same time, the Supplemental Poverty Measure (SPM), which incorporates post-tax transfers and government programs that assist low-income families, fell: the poverty rate for 2020 using the SPM was 9.1%, 2.6 percentage points lower than in 2019. This divergence reflects the extent to which stimulus payments, Social Security, refundable tax credits, housing subsidies, and other federal aid succeeded at keeping millions of people out of poverty.

All three reports rely on data from the Current Population Survey Annual Social and Economic Supplements (CPS ASEC). The CPS ASEC is administered each year between February and April by telephone and in-person. Data collection in 2020 was impaired by the COVID-19 pandemic, and the response rate for the CPS basic household survey in March was about 10 percent lower than in preceding months. Census Bureau researchers indicate that respondents in 2020 had relatively higher income and educational attainment than nonrespondents.

The first report, Income and Poverty in the United States: 2020, focuses on trends in income, earnings, income inequality, and poverty, and found that median income was $67,521 in 2020, a decrease of 2.9% from 2019. This is the first statistically significant decline since 2011. Between 2019 and 2020, the total number of people with earnings decreased by about 3 million. The report found that the official poverty rate in 2020 was 11.4%, up 1.0% from the previous year. There were approximately 37.2 million people in poverty in 2020, 3.3 million more than in 2019. Poverty rates among African Americans, Latinos, and Asians were 19.5%, 17.0%, and 8.1%, respectively, compared to 8.2% for non-Latino whites.

Health Insurance Coverage in the United States: 2020 finds that 8.6% of Americans, or 28 million people, did not have health insurance at any point in 2020. Between 2018 and 2020, the rate of private health insurance coverage decreased by 0.8 percentage points, and the rate of public health insurance coverage increased by 0.4 percentage points. The percentage of people covered by any type of health insurance in 2020 was not significantly different than 2018. Uninsured rates for children under the age of 19 rose 1.6 percentage points to 9.3%.

Supplemental Poverty Measure: 2020 discusses the SPM rate, which extends the official poverty measure by accounting for government assistance to low-income households and expenses for critical goods and services like housing. In 2020, the overall SPM was 9.1%, 2.6 percentage points lower than in 2019. This is the first-time poverty was lower using the SPM than the official poverty rate and likely reflects the effect of effects of extraordinary policy measures in 2020: while Social Security and unemployment insurance benefits are included in income in both the official poverty measure and the SPM, the SPM also accounts for additional benefits like economic impact payments.

The report also shows the effect that various programs have on the number who would be considered poor in 2020. Social Security kept 26.5 million people out of poverty in 2020, and economic impact or stimulus payments kept 11.7 million people out of poverty. Unemployment insurance payments and refundable tax credits kept 5.5 million and 5.3 million out of poverty, respectively. Commentary from Economic Policy Institute staff suggests expanded unemployment insurance may have kept considerably more people out of poverty than is reported, since the data rely on respondents self-reporting receipt of benefits. Housing subsidies prevented 2.4 million individuals from falling into poverty, while SNAP and Supplemental Security Income (SSI) benefits kept 2.9 million and 2.7 million people out of poverty.

All three reports are available at: