The U.S. Census Bureau released Income in the United States: 2021 and Poverty in the United States: 2021 on September 13. The reports present income and poverty estimates based on the 2021 Current Population Survey Annual Social and Economic Supplements (CPS ASEC), which includes household level data on employment, income, and health insurance collected from residents of all 50 states and the District of Columbia. There were no statistically significant changes in either median household income or the official poverty rate from 2020 to 2021, though the poverty rate did decline significantly as indicated by the Supplemental Poverty Measure (SPM). The 2021 SPM poverty rate of 7.8%, down 1.4 percentage points from 2020, represented the lowest SPM poverty rate since the SPM was first introduced. This historically low SPM poverty rate likely reflects the impacts of the “American Rescue Plan Act” (ARPA) and other temporary COVID-19 relief programs.
Median household income was $70,784 in 2021 but varied by race and ethnicity, educational attainment, and geography. Non-Hispanic white households had a higher median household income ($77,999) than Hispanic ($57,981) or Black ($48,297) households. Asian households had the highest median income at $101,418. In terms of educational attainment, median income was highest where householders had a bachelor’s degree or higher ($115,456) followed by some college ($64,378), a high school degree with no college ($50,401), and no high school degree ($30,378). Median household income was highest in the West ($79,430) and metropolitan areas ($73,823), and lowest in the South ($63,368) and non-metropolitan areas ($53,750).
Median household income did not change between 2020 and 2021. There were also no statistically significant changes in median household income by race or ethnicity. Households with a householder aged 65 years or older, however, saw a statistically significant decline of 2.6% in median income from $48,866 in 2020 to $47,620 in 2021. Median income also declined 4% for households where the householder only had some college education, while it increased 2.7% for households where the householder had at least a bachelor’s degree.
Approximately 37.9 million people lived in poverty in 2021 according to the official poverty measure, representing 11.6% of the U.S. population. Poverty rates, like median income, varied by race and ethnicity, educational attainment, and family type. White, non-Hispanic people had the lowest poverty rate (8.1%) followed by Asians (9.3%), Hispanics (17.1%), Blacks (19.5%), and American Indians and Alaska Natives (24.3%). People with higher levels of educational attainment were much less likely to live in poverty. Twenty-five percent of adults over age 25 without a high school diploma lived in poverty compared to just 4% with a bachelor’s degree or higher. Poverty also disproportionately impacted people in female-headed families (25.3%) compared to married-couple families (5.2%).
The Census Bureau also reported on the Supplemental Poverty Measure (SPM), which accounts for the cost of living and includes income from government anti-poverty and housing assistance programs. The SPM was particularly relevant for 2021, because it included the impacts of ARPA and other temporary COVID-19 relief programs. The SPM poverty rate of 7.8% was the lowest the Census Bureau has recorded since its first measurement in 2009 and represents only the second time the SPM poverty rate has been lower than the official poverty rate (11.6%). The SPM poverty rate was also lower than the official poverty rate in 2020, when there was also a substantial uptick in pandemic-related financial assistance.
Since the SPM accounts for government assistance, it is useful for understanding how different programs impact poverty. In 2021, Social Security kept 26.3 million individuals out of poverty – by far the most of any program. Refundable tax credits kept 9.6 million individuals out of poverty, followed by Economic Impact and stimulus payments (8.9 million) and the Child Tax Credit (5.3 million). Housing subsidies kept 2.4 million individuals out of poverty, though the SPM did not account for the expansion of housing subsidies through temporary programs such as Emergency Rental Assistance (ERA).
Read Income in the United States: 2021 at: https://bit.ly/3eQBJfM
Read Poverty in the United States: 2021 at: https://bit.ly/3xqmP6F