The relentless attack of the Trump-Vance administration on basic needs programs, access to data, and economic equity will harm the well-being of Native families and children even more. This is evident when we examine the impact of the administration’s cuts to vital programs like Medicaid and SNAP. The ongoing government shutdown threatens to further exacerbate the gaps in the provision of quality services that Native communities rely on for their health and nutritional needs.

Poverty continues to disadvantage AIAN children and their families

More than 1 in 6 (16.6%) AIAN children continued to live under the poverty line last year. This figure has remained statistically unchanged since 2022 (see Figure A) and is much higher than it was in 2021 when fewer than 1 in 10 AIAN children wrestled with poverty. The big difference in the numbers from 2021 and 2022 was due to pandemic relief efforts like the enhanced Child Tax Credit (CTC), which helped thousands of AIAN families with children meet their basic needs and avoid material shortcomings. But these gains for AIAN families and children were short lived. By 2022, AIAN child poverty rates climbed again, more than doubling after the expiration of the expanded social safety programs.

The situation of these economically vulnerable families and children has not changed since then and is only likely to deteriorate further with the historic cuts to basic needs programs (like Medicaid and SNAP) that the Trump-Vance administration passed this year. These cuts will disproportionately harm economically vulnerable families of color, such as AIAN families who are more likely than their peers to have a parent or child with a disability and who are still recovering from the impact of the last two recessions.

Figure A

Native families are more likely to suffer food insecurity than their peers

Early this year, we wrote about the rising threat of food insecurity for families of color. The persistent experience of AIAN families with poverty leaves them disproportionately affected by these concerns surrounding their ability to meet the nutritional needs of their household. Between 2016 and 2021, for example, AIAN households recorded a much higher prevalence of food insecurity relative to other groups (see Figure B). During this period, nearly 1 in 4 (23.3%) AIAN families struggled with food insecurity, compared with fewer than 1 in 10 (8%) white households.

Figure B

The situation of AIAN parents is even worse. During the six-year period referenced, more than 1 in 4 AIAN households with children under 18 (27.8%) and families with children under 6 (27.4%) did not feel secure in their ability to provide their families with an adequate and balanced diet. Irrespective of the characteristics of the household, AIAN families are significantly more likely than all families to struggle with food insecurity.

This disadvantage will likely compound in the years ahead as the Trump-Vance administration cuts funding for the Department of Agriculture (USDA), further restricts eligibility for programs like SNAP, and limits public access to crucial data about hunger. This year, for example, Trump’s USDA canceled the country’s leading survey that helps us understand the magnitude and severity of hunger and food insecurity in the U.S., on the grounds that it was “redundant” and “politicized.”

Lack of access to health insurance leaves Native communities disproportionately vulnerable to an early death

The well-being of Native communities is also threatened by lack of access to health insurance. Relative to peers, AIAN individuals suffer the highest uninsured rate in the U.S. Nearly 1 in 5 (18.9%) AIAN individuals (amounting to more than half a million people) lacked access to health insurance last year (see Figure C). While the Affordable Care Act (ACA) helped reduce the uninsured rate for AIAN individuals (nearly 3 in 10 AIAN individuals lacked health insurance in 2010), disparities in access have persisted over the years. Compared with their non-Hispanic white peers, AIAN people have been more than twice as likely to lack access to health insurance in just the last decade. These inequities also translate into disparities in life expectancy. AIAN men and women, for example, record a lower life expectancy at birth than their peers. Trump’s attacks on public health agencies, their personnel, research infrastructure, and programs for the needy threaten to exacerbate these disparities for years to come. 

Figure C

The Trump-Vance administration has weakened the agencies and programs that help the U.S. meet its obligations to Native communities

In less than a year, the Trump-Vance administration has weakened every aspect of the U.S. social safety net that helps AIAN families and children escape poverty, hunger, and disease. Trump began his second term by cutting staffing and funding for public health agencies and programs. By April 2025, the administration had reduced the Department of Health and Humans Service by more than 20%. Trump’s attack on equity also targeted workplace safety regulations and the broader research infrastructure for public health that works to identify and address the structural barriers that yield and widen racial and ethnic disparities in health. 

To top this off, Trump’s most significant legislative achievement this year delivered historic cuts to health programs (like Medicaid and CHIP) that are estimated to strip 10 million people of their health insurance coverage by 2034. More than 1 million AIAN individuals rely on Medicaid and CHIP. While AIAN individuals will be exempt from the new Medicaid work requirements, public health experts have warned that cuts to the program can widen gaps in tribal health services and disparities that already exist due to chronic federal underfunding of AIAN communities.

Trump’s major legislative achievement this year also weakened SNAP, the country’s most important nutritional assistance program. In FY 2023, more than 500,000 AIAN households relied on SNAP to meet their nutritional needs and avoid deeper economic insecurity. Trump’s reconciliation legislation from this summer is estimated to impact the benefits of millions of SNAP recipients. While pre-existing work requirements exemptions partially mitigate the harmful impact of Trump’s law on AIAN individuals, the phasing out of culturally relevant initiatives (such as SNAP-Ed) and cuts to the broader program weaken an important vehicle through which the U.S. delivers its obligations to Native communities.

In addition, beginning on November 1 of this year, the Trump-Vance administration has been denying access to SNAP benefits to millions of people due to the administration’s unwillingness to use SNAP’s contingency reserve funds during the government shutdown. In doing so, the administration is removing a critical safety net for Native American tribes and for over 1 in 5 Native American households more broadly.

States with some of the largest Native American populations are also states with higher overall population shares participating in SNAP. Oklahoma and New Mexico have some of the highest Native populations and more than 16% of their population receive SNAP benefits. Native Americans living in Oklahoma, on reservations, and other designated areas may be able to continue to receive food assistance through the Food Distribution Program on Indian Reservations (FDPIR). However, that program may face constraints due to additional demand and is not accessible for many Native people who do not live near federally recognized tribes that participate in FDPIR.

With every step this year, the administration has weakened the capacity of the federal government to meet the needs of Native communities. And families and children are being hurt in the process because they are disproportionately vulnerable to costly disparities in poverty, food insecurity, and health care access.

This interactive chartbook provides a statistical snapshot of race and ethnicity in the United States, depicting racial/ethnic disparities observed through

• Population demographics
• Civic engagement
• Labor market outcomes
• Income, poverty, and wealth
• Health

The chartbook also highlights some notable intersections of gender with race and ethnicity, including educational attainment, labor force participation, life expectancy, and maternal mortality. The findings are bracing, as they show how much more work we need to do to address longstanding and persistent racial inequities.

Most charts include data for five racial/ethnic groups in each of the charts—white, Black, Hispanic, Asian American and Pacific Islander (AAPI), and American Indian and Alaska Native (AIAN). In the charts and text, “Americans” refers to all U.S. residents, regardless of citizenship status.

Researchers seeking disaggregated data and statistics for AAPI and AIAN groups are encouraged to look at sources cited in the companion essays in the Anti-Racist Economic Research and Policy Guide: AAPI Data and the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.

As our efforts illustrate, collecting and maintaining data sources that are representative of the entire U.S. population is an essential first step toward overcoming the invisibility, neglect, and lack of understanding experienced by many communities of color. Future work on this project will involve identifying comparable data from alternative sources that fill in as much of the missing information in the chartbook as possible.

In this interactive chartbook, additional notes and source information can be accessed by clicking on the ellipses ( … ) in the notes and sources lines under the charts.

Population demographics

The U.S. has become more racially and ethnically diverse over the last two decades: Share of U.S. population by race and ethnicity, 2000, 2010, and 2020

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Each decennial Census since 2000 has revealed a more racially and ethnically diverse U.S. population. While the share of people who identify as Black (about 12%) or American Indian and Alaskan Native (0.7%) has remained constant, the non-Hispanic white share of the population has declined from 69.1% in 2000 to 57.8% in 2020. On the other hand, a growing share of U.S. residents identify as Hispanic (increasing from 12.5% in 2000 to 18.7% in 2020) or Asian American and Pacific Islander (increasing from 3.7% in 2000 to 6.1% in 2020). These changing population demographics reflect different trends in birth, mortality, and immigration rates across groups. Since 2000, there have also been significant changes in how people identify racially. Notably, a growing share of people identify as being of two or more races (this would include people who, for example, identify as Black and AAPI, but would not include people who identify as Black and Hispanic, as they are identifying Black alone as their race and Hispanic as their ethnicity). Also, a growing but still small share of people identify as being of a race other than those explicitly defined by the Office of Management and Budget (OMB).

As Trevon Logan notes in his essay, it is the OMB that issues regulations regarding the classifications of race and ethnicity by federal agencies, including the U.S. Census Bureau, which conducts the major household and business surveys used by researchers. There are six permitted race categories and two ethnicity classifications, Hispanic and non-Hispanic. As such, everyone is a member of both a race and ethnicity. For more on the current classifications, see Logan’s essay.

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While U.S. residents are overwhelmingly citizens, Asian American/Pacific Islander and Hispanic citizens are more likely to be first-generation immigrants: Share of U.S. population by race/ethnicity and nativity, 2024

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Across all racial and ethnic groups, an overwhelming majority of people in the United States are U.S. citizens, according to data from the Current Population Survey. However, nativity shares vary across racial groups. White persons (95.9%), American Indian and Alaskan Native (AIAN) persons (81.3%), and Black persons (88.6%) are most likely to have been born citizens (born in the United States or to United States citizens abroad), compared with over half of the Hispanic population (66.7%) and more than one-third (37.8%) of the Asian American and Pacific Islander (AAPI) population.

Immigration status also varies widely. AAPI residents are most likely to be immigrants: more than one-third (38.3%) were not born U.S. citizens but became U.S. citizens (i.e., are naturalized U.S. citizens), while another 23.9% are not citizens. Hispanic residents are next most likely to be immigrants: 12.6% are naturalized citizens and 20.7% are not citizens. These statistics highlight only a fraction of the diversity represented within and across different racial and ethnic groups. As several essays in the Advancing Anti-Racist Economic Research and Policy guide explain, analyses that use categories or group descriptions that are too broadly defined can lead to inaccurate conclusions.

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The uneven geographic distribution of racial and ethnic populations highlights the influence of state and local policy on racial inequality: Share of state population by race and ethnicity, 2020

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The U.S. Census Bureau projects that Black, Hispanic, AAPI, and other people who do not identify as white will collectively account for over half of the population of the United States by 2044. In California, Hawaii, Maryland, Nevada, New Mexico, Texas, and the District of Columbia, the white population is already in the minority, and in Arizona, Florida, Georgia, New Jersey, and New York, white persons make up just over half of the population. This interactive map shows areas of population density for each race or ethnic group (click on a race or ethnic group) along with the racial and ethnic distribution of each state’s population (click on a state). It shows that Southern states and the District of Columbia have the largest shares of residents who are Black, with the highest shares in the District of Columbia (40.9%), Mississippi (36.4%), and Louisiana (31.2%). Southwestern and Western states are home to a large percentage of Latinos, with the highest shares in New Mexico (47.7%), Texas (39.3%), and California (39.4%). AAPI residents, including Native Hawaiians, predictably account for nearly half (46.8%) of the population of Hawaii but are also a significant share of the population in California (15.5%) as well as New Jersey and Washington state (10.2% each). Also, as the group’s name would indicate, American Indian and Alaska Native residents account for the highest share of the population in Alaska (14.8%), followed by New Mexico (8.9%), South Dakota (8.4%), and Oklahoma (7.9%). White Americans account for the largest majority of the population in several Northeastern states (90.2% in Maine, 89.1% in Vermont, and 87.2% in New Hampshire) and West Virginia (89.1%).

The patterns illustrated in the map trace each group’s unique history of settlement, immigration, and migration in this country. But they also help to make a point about the important role that state and local policies play in either improving or worsening racial disparities in the United States. As just one example, EPI research shows that Southern states, which have a high density of Black residents, are more likely than states in other regions to use preemption laws to stop local governments from setting strong labor standards, such as raising the minimum wage and guaranteeing paid sick leave.

For more on preemption laws in the South, see Hunter Blair et al., Preempting Progress: State Interference in Local Policymaking Prevents People of Color, Women, and Low-Income Workers from Making Ends Meet in the South, Economic Policy Institute, September 2020.

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Current population demographics by race/ethnicity and age support projections that people of color will become the collective majority by 2050: Share of U.S. population within given age ranges, by race and ethnicity, 2024

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The changing racial and ethnic makeup of the U.S. population is foretold in the age distribution of different racial and ethnic groups. In 2024, over a quarter (28.9%) of people who identified as Hispanic were under the age of 18, as were about a quarter of those who identified as Black (24.5%), American Indian and Alaska Native (AIAN) (27.9%) and a fifth within those who identified as Asian American and Pacific Islander (19.9%). A smaller share of the white population (17.8%) belonged to this younger age cohort while over a third (36.9%) of white residents were near or at retirement age (age 55 or older)—a much larger share than for other racial and ethnic groups. As the current population ages, the older population will remain predominantly non-Hispanic white while Black, Hispanic, AAPI, and AIAN persons will be a growing share of the younger population. This racial and ethnic generation gap will require balancing the interests of a younger, less wealthy, more racially and ethnically diverse population with those of an older, wealthier, predominantly white population. However, these generations are linked in important ways. Older workers and retirees have a stake in worker, economic, and racial justice for those younger workers who in the years ahead will be a growing share of workers driving the national economy and providing many of the services the aging population relies on. Census population projections from 2022 (the latest available) indicate that in 2050, non-Hispanic white persons will account for less than half (48.4%) of the U.S. population (see U.S. Census Bureau, 2023 National Population Projections Tables, Table 4).

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Men’s educational attainment is highly stratified by race and ethnicity, with American Indian and Alaska Native, Hispanic, and Black men most likely to be “working class”: Share of men aged 25 and older within given level of educational attainment, by race and ethnicity, 2024

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The term working class has been used to describe working-age adults who have less than a bachelor’s degree. Based on their high shares without a bachelor’s degree or more education, American Indian and Alaska Native (AIAN) (85.3%), Hispanic (80.9%), and Black (76.5%) men are more likely to be considered working class (under this definition) than are white (60.3%) or Asian American and Pacific Islander (AAPI) (40.7%) men. Even among the groups of men most likely to be considered working class, there is still a wide range of educational attainment that includes everything from less than a high school diploma to some college. The some college category includes attendance at a four-year or two-year institution, but no degree; it also includes completion of a two-year associate or technical degree. The groups with the highest shares of people with less than a high school education are Hispanic men (27.6%) and AIAN men (23.5%) and 57.7% of Hispanic men and over half of AIAN men (58.2%) have no education beyond high school. While about half (47.0%) of Black men also have no education beyond high school, Black men are more likely than either Hispanic or AIAN men to have a bachelor’s or advanced degree, but still much less likely to have that level of education than either white or AAPI men. AAPI men lead all other racial groups in the share (59.2%) who have a bachelor’s or advanced degree. These patterns of educational attainment are shaped by multiple factors, including differences in immigration policies applied to Asian versus Latin American countries, as well as the legacy of racial discrimination and oppression that severely limited educational opportunities for generations of Black and Native Americans.

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Most women have more than a high school education, but Latinas and AIAN women lag behind other groups in attaining higher education: Share of women aged 25 and older within given level of educational attainment, by race and ethnicity, 2024

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In 2024, across most racial and ethnic groups, at least half of women aged 25 or older had some education beyond a high school diploma. Latinas were the exception—only 49.1% had some level of education beyond high school and 24.2% had less than a high school education, a much higher percentage than any other group of women (1.2 to nearly 5 times as much). Those women least likely to have a bachelor’s or advanced degree were American Indian and Alaskan Native (AIAN) women (19.7%) and Latinas (23.9%). Asian American and Pacific Islander (AAPI) and white women had the highest levels of educational attainment with 56.9% of AAPI women and 41.8% of white women having at least a bachelor’s degree, followed by 29.9% of Black women. As with men, these patterns of educational attainment are shaped by multiple factors, including differences in immigration policies applied to Asian versus Latin American countries, as well as the legacy of racial discrimination and oppression that severely limited educational opportunities for generations of Black and Native Americans. But compared with male educational attainment by race and ethnicity women tend to have higher levels of educational attainment (see Chart 5).

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While the Black and AIAN imprisonment rate has decreased, Black and AIAN people are still five times as likely as white people to be imprisoned: Imprisonment rates per 100,000 U.S. residents by race and ethnicity, 2012–2022

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In response to the demand for criminal justice reform and a shift away from the “tough on crime” politics of the 1980s and 1990s, imprisonment rates for Black, American Indian and Alaska Native (AIAN), Hispanic people have fallen over the last decade. But Black, AIAN, and Hispanic people are still much more likely to be incarcerated than white people, whose imprisonment rate has stagnated over the past decade. Over 1,000 out of every 100,000 U.S. residents who are Black or American Indian and Alaska Native (AIAN) were imprisoned in 2023, followed by 603 out of 100,000 Latino U.S. residents, 229 out of 100,000 white U.S. residents, and 88 out of 100,000 Asian American and Pacific Islander U.S. residents. Thus, the approximately 1.8 million people held in U.S. prisons at the end of 2022 —an often-forgotten segment of the U.S. population—are disproportionately Black, AIAN, Hispanic, and other people of color. 

Data on the size of the overall incarcerated population come from the “Correctional Populations in the United States, 2022—Statistical Tables” published by the U.S. Department of Justice in May 2024. 

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Black and AIAN men have an exceptionally high imprisonment rate: Imprisonment rates per 100,000 U.S residents, by race/ethnicity and gender, 2022

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This chart makes two facts very clear: That imprisonment in the United States is not only a gendered issue—with men being much more likely to be imprisoned—but also an issue of racialized gender, with Black and American Indian and Alaska Native (AIAN) men being far and away the most highly imprisoned group. Among women, AIAN residents had the highest imprisonment rate (173 per 100,000), followed by Black residents who had an imprisonment rate (64 per 100,000) in 2022. AIAN women were almost three times as likely to be imprisoned as Black women, around four times as likely to be imprisoned as White and Hispanic women, and 34 times as likely to be imprisoned as AAPI women. Among men, Black residents had the highest imprisonment rate (1,826 per 100,000), followed by AIAN men (1,443 per 100,000). Black men were more than twice as likely to be imprisoned as Hispanic men, more than five times as likely to be imprisoned as white men, and almost 13 times as likely to be imprisoned as AAPI men. AIAN men were almost twice as likely to be imprisoned as Hispanic men, more than four times as likely to be imprisoned as white men, and more than ten times as likely to be imprisoned as AAPI men.

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Civic engagement

Consistently higher turnout among white voters was challenged by historic Black voter turnout in 2012 and, to a lesser extent by historic Hispanic and Asian voter turnout in 2020: Voter turnout in presidential election years by race and ethnicity, select years 1992 to 2024

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The right to vote is the most powerful right of U.S. citizenship—and widespread voter participation is essential to a functional democracy. Yet many U.S. citizens ages 18 and older do not vote. Data on voter participation during presidential election years since 1992 reveal that turnout varies significantly by race and ethnicity and changes over time. Since 1992, voter turnout has typically been highest among white voters—ranging from 60.7% to 70.9%—although Black voter turnout saw a huge increase in 2008 and 2012 during the election and reelection of the nation’s first Black president, Barack Obama. In fact, 2012 was the only election in which Black voter turnout (66.2%) exceeded white voter turnout (64.1%). Hispanic and Asian voter turnout was less than 50% in all presidential election years between 1996 and 2016, until both groups had the largest turnout in decades in 2020 (53.7% and 59.7% respectively). In the 2024 presidential election, voter participation declined among Black, Hispanic and AAPI adults. While one’s personal decision to participate in an election can be influenced by any number of factors—including enthusiasm about a particular candidate or confidence in the democratic process—rampant forms of voter suppression in some states undoubtedly contribute to these disparities as well.

For more on the impact of state laws that limit access to voter registration, revoke the right to vote for returning (formerly incarcerated) citizens, or otherwise make it more difficult for certain populations to cast a ballot, see “State Voting Laws,” Brennan Center for Justice, accessed May 5, 2022;  “State Voting Rights Tracker,” Voting Rights Lab, accessed May 5, 2022.

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Amid dramatic decline in union membership since the 1970s, Black workers have held onto the highest rate of union membership for decades: Union membership rates, by race and ethnicity, 1973–2024

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Like the constitutional right to vote in civil society, union membership gives workers a voice—in this case, a voice at work. But as the chart shows, since 1973, union membership has declined for all racial and ethnic groups. Union membership is an important metric of the state of the American worker given the role that labor unions play in giving workers a stronger, collective voice to advocate for higher pay, better benefits, and training and promotional opportunities, as well as protections against discrimination and harassment. In a unionized workforce, for example, collective bargaining results in labor contracts that help to create greater transparency through clearly defined policies and pay structures. These contracts help reduce the potential for pay discrimination by limiting an employer’s discretion in paying different wages to comparably qualified individuals doing the same job and by providing workers with critical protections and direct recourse against other forms of exploitation or mistreatment. The benefits of union membership are a likely contributor to the higher union membership rate of Black workers, given their long history of unequal treatment relative to other groups of workers. Between 1973 and 1980, Hispanic workers also had higher rates of union membership than white workers. While the subsequent across the board decrease in union membership has brought union membership rates by race and ethnicity closer together, in 2024, Black workers were still more likely to be union members (11.7%) compared with white workers (10.0%), Asian American and Pacific Islander workers (8.9%), and Hispanic workers (8.5%).

Still, the labor movement, like any other U.S. institution, is not immune to racism. Unions must continue to become more diverse, inclusive, and dynamic as they serve the vital role of leveling the playing field for all workers.

For more on the benefits and protections conferred by union membership, see Celine McNicholas et al., Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19, Economic Policy Institute, August 2020 and Valerie Wilson, “The Costs of Racial and Ethnic Labor Market Discrimination and Solutions That Can Contribute to Closing Employment and Wage Gaps,” testimony before the U.S. House of Representatives Select Committee on Economic Disparity and Fairness in Growth, January 20, 2022.

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Labor market

Black women have maintained the highest labor force participation rate amid post-1970 rise in women’s labor force participation overall: Labor force participation rate for women by race and ethnicity, 1973–2024

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The labor force participation rate is an important indicator of economic well-being. It shows the number of people in the labor force—people who are employed or unemployed but looking for work—as a share of the number of civilian, noninstitutionalized people ages 16 and older. Across racial and ethnic groups, women’s labor force participation rose significantly from the 1970s through the 1990s for a number a reasons: increased access to higher education, and the introduction and widespread availability of the birth control pill, to name a few. After leveling off during most of the first decade of the 2000s, labor force participation by women declined during or after the Great Recession of 2007–2009. And it declined again during the 2020 COVID-19 pandemic and recession as the burden of job losses and care responsibilities disproportionately impacted women. In 2024, Black women had the highest labor force participation rate at 60.5%, followed by Hispanic (58.9%), Asian (58.6%), white (56.7%), and American Indian and Alaska Native women (55.1%). While Latinas have historically had the lowest rates of labor force participation among women, their labor force participation rate had been climbing steadily in the four years leading up to the COVID-19 pandemic. Historically, Black women have had stronger labor force attachments than other groups of women. This is part of the legacy of being forced to work as enslaved people, but the necessity of work has continued for Black women who are often co-breadwinners if not sole earners for their households.

For more on the rise of women’s labor force participation from the 1970s see Elisabeth Jacobs and Kate Bahn “Women’s History Month: U.S. women’s labor force participation”, Washington Center for Equitable Growth, March 22, 2019.  

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Hispanic men have maintained the highest labor force participation rate even as labor force participation of all men has declined since the 1970s: Men’s labor force participation rate by race and ethnicity, 1973–2024

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Across all racial and ethnic groups, men’s labor force participation rates have declined significantly since the 1970s, with the sharpest decline occurring during and since the Great Recession of 2007–2009. While this trend in part reflects an aging population with a growing share of retirees, researchers have suggested that labor force participation has fallen among prime-age men (ages 25–54) due to a rise in serious health conditions that are a barrier to work, the emerging opioid crisis, or technological changes that encourage younger men  (under age 30) to allocate less time to work and more time to leisure activities like playing video games. Unlike with Black women, who have the highest labor force participation rate among women, Black men in 2024 had the lower labor force participation rates than white and Asian men (65.9%). And unlike with Hispanic women, who have historically had the lowest labor force participation rates among women, Hispanic men have had the highest labor force participation rate, which reached 75.5% in 2024. The ranking of men’s labor force participation rates by race and ethnicity has remained constant over the last three decades.

For more on the likely reasons for declining male labor force participation see Alan Krueger, Where Have All the Workers Gone? An Inquiry into the Decline of the U.S. Labor Force Participation Rate, Brookings Papers on Economic Activity, September 2017; and Mark Aguiar et al., “Leisure Luxuries and the Labor Supply of Young Men,” National Bureau of Economic Research Working Paper 23552, June 2017.

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Black and AIAN unemployment is consistently higher than unemployment of all other racial and ethnic groups: Annual unemployment rate by race and ethnicity, 1979–2024

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Relative rates of unemployment by race and ethnicity have been remarkably consistent over time. Typically, the annual unemployment rates of American Indian and Alaska Native (AIAN), Black, and Hispanic workers are significantly higher than those of white workers. The difference between Asian and white unemployment rates is smaller, and the size of the gap fluctuates, as does which group has the lower unemployment rate. In 2024, this pattern held, with an unemployment rate of 6.5% for AIAN workers, 6.0% for Black workers, followed by 5.1% for Hispanic workers, 3.6% for white workers, and 3.5% for Asian workers. While 2023 saw historical low rates for Black unemployment, one of the most enduring features of the U.S. labor market is the roughly 2-to-1 ratio of the Black and white unemployment rates.

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Higher education typically lowers a worker’s chances of being unemployed but does not eliminate racial and ethnic disparities in unemployment rates: Unemployment rate by race/ethnicity and educational attainment, 2024

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A breakdown of unemployment rates by race, ethnicity, and education level shows the limits of educational attainment as a factor in addressing inequitable economic outcomes. As the chart shows, racial and ethnic disparities in unemployment rates exist at every level of educational attainment. And Black workers have the highest rates of unemployment among all groups without a college degree. In fact, even at historically low rates of unemployment in 2024, only the most highly educated Black workers approached anything near unemployment rate parity with their white counterparts. The figure also shows that while education can contribute to better outcomes—unemployment rates are lower for all groups at higher levels of education—education alone does not necessarily create equal outcomes. Reading this chart alongside Chart 13 suggests that differences in the average unemployment rates of racial and ethnic groups can only be partially explained by relative differences in education, skill, experience or local labor market conditions—discrimination remains an undeniable factor.

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Black, Hispanic, and AIAN workers earn lower wages and have smaller gender wage disparities than their white and AAPI counterparts: Median wages by race/ethnicity and gender, 2024

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There are sharp differences in the wages earned by typical workers of different racial groups in the United States. Asian American and Pacific Islander (AAPI) and white workers are paid the highest wages at the median, while Black, Hispanic, and American Indian and Alaska Native (AIAN) workers are paid significantly less. The gender differences are also greater among AAPI and white workers than among Black, Hispanic and AIAN workers. While AAPI and white men far out-earn AAPI and white women, Black and Hispanic men and women have much more similar median wages.

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Even after controlling for education and other factors known to affect earnings, women—particularly Black and Hispanic women—are paid far less than white men: Regression-adjusted hourly wage gaps for women relative to non-Hispanic white men, by race and ethnicity, 2024

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Women of all racial and ethnic groups in the U.S. have a significant pay penalty by virtue of their gender, even when we account for several factors that could reasonably influence a worker’s productivity or wage rate, including education, marital status, age (a measure of potential experience) and geographic area (a measure of local labor market conditions). Black and Hispanic women face an additional pay penalty by virtue of their race or ethnicity. The chart depicts these wage gaps, presented as how much less women make than non-Hispanic white men. The fact that Black and Hispanic women earn about a quarter less than white men on average when calculating regression-adjusted wage gaps mean, then, that the pay penalty is not a result of differences in formal education between those groups of women and white men. One partial explanation for these wage disparities is occupational segregation, by which women of color are more highly concentrated in occupations with low pay, even relative to their education level. However, women of all races and ethnicities also often earn less than men in the same occupation (not shown in the chart), an indication of potential pay discrimination.

For more on occupational segregation and on gender pay gaps by occupation, see Jessica Schieder and Elise Gould, Women’s Work” and the Gender Pay Gap: How Discrimination, Societal Norms, and Other Forces Affect Women’s Occupational Choices—and Their Pay, Economic Policy Institute, July 2016; Emily Carew and Valerie Wilson, “Latina Equal Pay Day: Latina Workers Remain Greatly Underpaid, Including in Front-Line Occupations,” Working Economics Blog, Economic Policy Institute, October 20, 2021; Valerie Wilson, “Black Women Face a Persistent Pay Gap, Including in Essential Occupations During the Pandemic,” Working Economics Blog, Economic Policy Institute, August 2, 2021.

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Income, poverty, and wealth

Racial and ethnic disparities in median household income have been largely persistent across time: Inflation-adjusted median household income (2024 dollars), by race and ethnicity, 1972–2024

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In the United States, households of different racial and ethnic backgrounds bring in significantly different amounts of income and have done so for decades. At the median, Black, Hispanic, and American Indian and Alaska Native (AIAN) households earn the least on an annual basis, while Asian and white households earn the most. It is notable, though, that in 2023, Black households had the highest household income on record and experienced the largest increase in income between 2020 and 2023. Significant gaps in employment opportunities (shown in Chart 13) and lower wage levels (shown in Chart 15) translate into lower incomes among Black, Latino, and AIAN households. Household income is also a function of the number of earners in a household. Though not shown here, past EPI research found that in the pre-pandemic economy, about a third of Black nonelderly households (where the head of household is age 18–64) had two or more earners, compared with nearly half of white and Hispanic nonelderly households. This racial disparity in the number of household earners is not just a function of how many working-age adults live in the household, or family structure, but is another measurable consequence of the persistent 2-to-1 ratio between the Black and white unemployment rates (shown in Chart 13). As income inequality in the United States has increased in general over the past 50 years, disparities between the least and most well-off groups have continued to persist and, in some cases, have grown.  

For more on earners per household by race, see Elise Gould and Valerie Wilson, Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality, Economic Policy Institute, June 2020. For more on increasing income inequality, see Elise Gould, “Decades of Rising Economic Inequality in the U.S.,” testimony before the House of Representatives Ways and Means Committee, Washington, D.C., March 27, 2019.

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Black and AIAN households are more likely to have the lowest annual incomes—under $25,000 per year in 2024: Share of households within given income range by race and ethnicity, 2024

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This chart extends beyond the data on median or midpoint of household income shown in Chart 17 to provide a more detailed look at where different groups fall across the entire household income distribution. In 2024, 22.9% of Black households, 23.3% of American Indian and Alaska Native households, 15.1% of Hispanic households had annual incomes under $25,000, compared with just 11.4% of white households and 9.3% of Asian households. This $25,000 figure is well below the 2024 official poverty threshold for a family of two adults and two children ($31,812). Conversely, 29.3% of Asian households and 17.8% of white households had annual incomes at or above $200,000—the highest income category—compared with only about 6%-10% of Black, AIAN, and Hispanic households.  

Poverty threshold data can be found in the U.S. Census Bureau’s Poverty in the United States: 2024 data tables, published September 09, 2025 

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Persistently elevated AIAN, Black, and Hispanic child poverty rates have thwarted progress reducing overall child poverty in the U.S.: Child poverty rates, by race and ethnicity, 1974–2024

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A cruel and unfortunate reality of structural racism in the U.S. economy is that even in the “best” of economic times, Black, American Indian, and Alaska Native (AIAN), and Hispanic children experience much higher rates of poverty than white children. In 2024, 30.5% of AIAN children, 25.4% of Black children and 20.2% of Hispanic children lived below the official poverty threshold, compared with just 8.2% of non-Hispanic white children 6.4% of Asian children. While child poverty has fallen significantly for Black, Hispanic, and Asian American children over the past 40 years, Black and Hispanic child poverty rates remained over 20% in 2024. Additionally, in 2024, AIAN children had the highest rates of child poverty at over 30 percent (30.5%). This large and persistent disparity in child poverty combined with the fact that Black and Hispanic children have become an increasing share of the underage 18 population over time (see Chart 1 and Chart 4) has resulted in very little change in the overall child poverty rate since 1974. Given the long-term effects of exposure to poverty in childhood, addressing these persistent disparities must play a role in our approach toward building equity and moving the needle on child poverty.

For more on the long-term effects of exposure to poverty in childhood, see Kerris Cooper and Kitty Stewart, “Does Money Affect Children’s Outcomes? An Update,” CASEpapers (203), The London School of Economics and Political Science, July 2017; Randall Akee et al., “Parents’ Incomes and Children’s Outcomes: A Quasi-Experiment,” American Economic Journal: Applied Economics, January 2010.

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Poverty rates are higher among AIAN, Black and Hispanic working-age adults: Poverty rates for age 18–64, by race and ethnicity, 1974–2024

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While poverty across the working-age population (ages 18 to 64) is lower than that for children (see Chart 19), disparities by race and ethnicity follow a similar trend, with American Indian and Alaska Native (AIAN), Black, and Hispanic adults more likely to be impoverished than white and Asian adults. Poverty is a measure of economic deprivation, and among working-age adults in particular, reflects disparities in unemployment, wages, and income. Life circumstances, such as severe disability and major illness—which can also limit earned income or quickly deplete any available savings—also contribute to poverty for this age group. The racially coded misrepresentation of poverty as some kind of moral or cultural pathology has hindered the political will needed to sustain and strengthen vital income supports that have proven effective in fighting poverty.  

For more on the misrepresentation of poverty as a cultural pathology see William “Sandy” Darity Jr., “Revisiting the Debate on Race and Culture: The New (Incorrect) Harvard/Washington Consensus.” Du Bois Review: Social Science Research on Race 8, no. 2, 467–476. For more on the vital income supports that would lessen poverty see Asha Banerjee and Ben Zipperer, “Social Insurance Programs Cushioned the Blow of the COVID-19 Pandemic in 2020,” Working Economics Blog, Economic Policy Institute, September 14, 2021.

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There are large racial disparities in poverty at older ages (65 and older)—likely reflecting differences in retirement preparedness and/or lifetime income disparities: Poverty rates for people ages 65 and older, by race and ethnicity, 1974–2024

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The poverty seen among older Americans in the chart is most likely the result of a lifetime of low earnings and a lack of retirement preparedness. While research shows that Social Security plays a critical role in keeping poverty rates among older Americans lower than they otherwise would have been (not depicted in the chart), older Black, Hispanic, and American Indian and Alaska Native (AIAN) adults still have relatively high poverty rates. Older Asian Americans are also more likely to live in poverty than older white Americans. Additionally, older Asian Americans have higher poverty rates than younger Asian Americans (see Chart 19 and Chart 20). This is likely due to a larger share of older Asian Americans having worked comparatively few years in the United States, or in jobs where they were unable to accumulate the necessary years for Social Security eligibility, leaving them less able to take advantage of work-based social safety net programs like Social Security.

For more on the causes of poverty among older Americans and the capacity of Social Security to lift older Americans—particularly women and people of color—out of poverty, see Kathleen Romig, Social Security Lifts More People Above the Poverty Line Than Any Other Program, Center on Budget and Policy priorities, April 2022. For more on the economic condition of the older Asian American population, see Victoria Tran, “Asian American Seniors Are Often Left Out of the National Conversation on Poverty,” Urban Wire (Urban Institute blog), May 31, 2017.

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Racial wealth disparities are stark and persistent, reflecting a history of exploitation and exclusion: Median family net worth by race and ethnicity, selected years from 1989 to 2022

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The chart shows sharp racial and ethnic disparities in net worth observed across time in the United States. Though not shown in the chart, these disparities reflect the differences in lived economic experiences between white, Black, Hispanic, and Asian families. Wealth can be accumulated both within and across generations, such that a high net worth can result from the benefit of prime earning years with 1) relatively few employment disruptions, 2) access to wealth-building savings and investment vehicles, 3) relatively few serious negative health shocks, and 4) well-timed wealth transfers from parents and grandparents.  The typical white household has many times the wealth of the typical Black or Hispanic household due to 1) their privileged position in the American labor market, which grants them access to more consistent and higher-quality employment opportunities, 2) their more limited exposure to the health risks brought on by poorer living conditions and discrimination, and 3) their history of access to wealth-building opportunities from which other groups have been excluded. 

In 2022, the Survey of Consumer Finances reported household wealth data for the Asian American population for the first time. Asian household wealth far outstrips that of other households in 2022, though this statistic should be couched with appropriate context: Asian Americans are an incredibly diverse group with varying economic circumstances related to, among other things, immigration history and country of origin; moreover, the SCF oversamples households that are likely to be wealthy. Further disaggregation of wealth data by immigration history could be useful in illuminating wealth disparities within the Asian American population.  

For more on the systemic barriers to Black wealth building see Natasha Hicks, Fenaba Addo, Anne Price, and William Darity Jr., Still Running Up the Down Escalator: How Narratives Shape Our Understanding of Racial Wealth Inequality, The Samuel Dubois Cook Center on Social Equity, 2021. For more on the barriers to Hispanic wealth building see Dedrick Asante-Muhammad, Alexandra Perez, and Jamie Buell, “Racial Wealth Snapshot: Latino Americans.” National Community Reinvestment Coalition, September 17, 2021.

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Health

Racial disparities in life expectancy reflect the cumulative disadvantage of living as a minority in the United States: Women’s and men’s life expectancy at birth, by race and ethnicity, 2022

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Racial disparities in life expectancy have been documented as far back as statistics on life expectancy have been recorded in the U.S, with clear and persistent distinctions between privileged groups and disadvantaged groups. That is, rather than groups shifting in their ranking of life expectancy randomly across time, there are distinct patterns in which groups live longer lives than others. In general, Black and AIAN women and men live much shorter lives than white and Asian women and men. 

In 2022, Asian American women and men had the longest life expectancies, at 86.3 years and 82.3 years respectively. AIAN women and men had the lowest life expectancies, at 64.5 years and 71.3 years respectively. This massive gap in life expectancy approaching two decades can be attributed to several factors, many of which are structural and rooted in economic disparity. In recent years, life expectancy gains have disproportionately gone to those in the highest income categories, who are disproportionately white and Asian (see Chart 18). Alongside the history of white supremacy and anti-Black racism in the United States, these economic roots of also help to explain persistent the persistent Black-white gap in life expectancy. That Black-white gap has fluctuated somewhat over the past decade, shrinking due to the impact of opioid-related “deaths of despair” on lowering white life expectancy, and reopening as COVID-19 related mortality disproportionately impacted Black and brown communities. 

Hispanic women and men tend to live longer than white women and men, though that life expectancy advantage has been shown to diminish with subsequent generations of U.S.-born Latinos. This suggests that there may be something uniquely deleterious about living as a minority in the United States.

For more on gaps in life expectancy, effects of the opioid crisis, and Hispanic life expectancy see Congressional Research Service, The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age, CRS Report R44846, July 6, 2021; Helena Hansen and Julie Netherland, “Is the Prescription Opioid Epidemic a White Problem?” American Journal of Public Health 106, no. 12 (December 2016), 2127–2129 (doi: 10.2105/AJPH.2016.303483); Osea Giuntella, “The Hispanic Health Paradox: New Evidence from Longitudinal Data on Second and Third-Generation Birth Outcomes,” SSM – Population Health, vol. 2 (December 2016), 84–89 (doi.org/10.1016/j.ssmph.2016.02.013).

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The Affordable Care Act significantly reduced uninsured rates across racial and ethnic groups, but disparities remain: Uninsured rates by race and ethnicity, 2008–2024

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The Affordable Care Act (the ACA or “Obamacare”) expanded health insurance coverage to middle- and low-income Americans, which disproportionately benefited those groups with the least access—Hispanic Americans and American Indians and Alaska Natives (AIAN), and to a lesser extent Black Americans. Despite the marked improvement in health insurance coverage rates since the implementation of ACA, disparities between groups remain stark, with Hispanic and AIAN uninsured rates double Black rates, and approaching four times as high as the uninsured rates of white and Asian American and Pacific Islanders (AAPI). Early diagnosis and treatment are essential to minimizing the severity of chronic illnesses, and regular health care is important for promoting better overall health. The lack of health insurance often results in a choice to delay receiving health care until one’s condition is critical, contributing to racial disparities in health outcomes and life expectancy.

For more on how the ACA expanded health coverage, particularly to certain groups, see Samantha Artiga, Latoya Hill, Kendal Orgera, and Anthony Damico. “Health Coverage by Race and Ethnicity, 2010–2019,” Kaiser Family Foundation, July 16, 2021; Jesse Cross-Call, Medicaid Expansion Has Helped Narrow Racial Disparities in Health Coverage and Access to Care, Center on Budget and Policy Priorities, October 2020.

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Black mothers are far more likely to die from pregnancy-related causes than are white and Hispanic mothers: Pregnancy-related deaths per 100,000 live births by race and ethnicity, 2023

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Maternal mortality rates are a stark indicator of racial disparities in public health in the United States. Black women are over twice as likely to die from a pregnancy-related cause as white women, almost three times as likely as Hispanic women, and almost four times as likely as Asian women. Although not shown in the chart, these racial disparities persist regardless of a woman’s social or economic status. Health status and differential access to quality prenatal care play a major role in maintaining these disparities, as does structural racism more generally. To adequately address these disparities in maternal health outcomes, we must confront racism and bias in the U.S. health care system and the implications for how health care providers and personnel communicate with and treat patients.

For more on the causes and solutions to Black maternal mortality, see “Working Together to Reduce Black Maternal Mortality,” Centers for Disease Control and Prevention, April 6, 2022.

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AIAN population 1-year estimates and 3-year rolling averages, select charts

Appendix

Appendix

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Although job growth began to wane in the second half of 2024, the current administration’s economic mismanagement has led to a significant slowdown in job growth this summer. The most recent jobs report confirmed that the economy actually lost jobs in June 2025, and job growth for August was much weaker than anticipated.

Despite all this chaos and uncertainty, Hispanic workers have managed to hold on to their previous job market gains. This resilience is largely a story about employment growth among Latinas. But there are growing signs that these workers and their families remain vulnerable to economic hardship as the current administration attacks immigrants, basic needs programs, and common-sense economics.

Despite a labor market slowdown, Hispanic workers continued to show strength in the first half of 2025

By 2023, the employment rate of Hispanic workers (63.8%) had achieved a near-full recovery from the shock of the COVID-19 pandemic. Despite weaker overall job growth earlier this year, the same share of Hispanic workers remained employed in April 2025 (see Figure A). While this figure declined marginally to 63.4% in August 2025, it is much less pronounced than the decline Black workers are now experiencing. This is because Black workers are more directly affected by federal government layoffs and are generally among the first to sharply experience the adverse effects of an economic slowdown and eventual downturn.

Figure A

Latina workers remain the backbone of this story of resilience

Although Latinos have historically enjoyed higher employment rates than Latinas, the record gains for Hispanic workers over the last few years have been largely driven by Latinas. Despite being disproportionately affected by the pandemic recession, Latinas reached a record-high employment rate (56%) in 2023. The share of Latinas with a job reached a new peak (59.6%) in April 2025 (see Figure B). Once again, this experience differs from that of Black women, who have been adversely impacted by the weaker job growth since February of this year. In fact, the employment rate of Latinas surpassed that of Black women for the first time in March 2025.  

Figure B

Hispanic workers continue to face persistent disparities in earnings and poverty

Undoubtedly, Hispanic workers have shown remarkable resilience in the face of the Trump-Vance administration slowing job growth dramatically in 2025. But these workers and their families remain vulnerable to economic insecurity as fears of a downturn continue to rise. Income disparities and variability leave Hispanic workers and their families with less financial cushion than their peers to maintain their standard of living in case of a job loss. Less than half of Hispanic adults have enough savings to cover an unexpected $400 expense with cash or its equivalent.   

Latinas and Hispanic children are especially vulnerable to economic insecurity and hardship. Latinas face a greater pay gap than most other groups of women in the labor market. Inequities in household incomes also leave Hispanic children three times more likely to experience poverty than their white peers. Given their material needs, these families and children will be unfairly affected by a weakening economy and Trump’s attacks on basic needs programs like food stamps and Medicaid—not to mention a senseless approach to immigration and trade policy.

Today, the Census Bureau released 2024 state-level income and poverty data from the American Community Survey (ACS). Although these data come from a different survey than the national income and poverty data, the overall trends are similar, with a range of outcomes across states.

Importantly, these data describe trends for 2024 and tell us nothing about economic conditions this year, in which Trump administration actions—chaotic tariffs, mass deportations, attacks on federal employees—have weakened the labor market, put upward pressure on prices, and threatened to undo recent progress of historically high wage growth and declining inequality.

State-level changes in household income

Between 2023 and 2024, U.S. median household income rose 2.0% to $81,604.1 Median household income varied significantly by state, from a low of $59,127 in Mississippi to $109,707 in the District of Columbia in 2024. Compared with 2023, median household incomes saw the largest decline in Rhode Island (–4.5%) and the largest increase in Alaska (7.3%). Twenty-nine states had a statistically significant increase in median income while the remaining 21 states and D.C. had no measurable year-over-year change in household income, positive or negative.

Because single-year changes can be volatile, it’s useful to look over a longer timeframe to identify trends. Specifically, we compare 2024 data with 2019—the year before the COVID-19 pandemic began—to understand the change in median household income between two recent years in which the economy was relatively strong. Between 2019 and 2024, ACS-measured median household income nationally increased only 1.1% after adjusting for inflation. Idaho (8.3%) and Montana (7.3%) experienced the largest increases in median household income since 2019, while Wyoming (–5.4%) and Minnesota (–4.9%) saw the largest declines. Overall, 30 states experienced an increase in median incomes from 2019 to 2024 and 20 states plus D.C. experienced a decline (see Figure A).

Figure A

State-level changes in poverty

The Census reported that poverty rates measurably fell in 13 states from 2023 to 2024. The share of people with incomes below the poverty line ranged from a low of 7.2% in New Hampshire to a high of 18.7% in Louisiana in 2024, compared with the U.S. average of 12.1% as measured by the ACS. Regionally, poverty rates were higher in the South and lower in the Northeast and West. Since 2023, poverty declined nationwide by 0.4% but declined much faster in Montana (–1.5%), New Mexico (–1.4%), and South Dakota (–1.4%). Poverty increased by more than one percentage point in DC (3.3%) and North Dakota (1.3%).

Poverty rates declined slightly less over the past year compared with 2019, but most states made progress nonetheless. Twenty-nine states had lower poverty rates in 2024 than in 2019, while 18 states and D.C. had poverty rates above their 2019 rates, and there was no change in California, New Jersey, and Wyoming (see Figure A). Since 2019, the poverty rate increased the most in D.C. (3.8%)—from 13.5% to 17.3%.

Trump administration actions will harm working families and deepen inequality

The Biden administration’s fiscal response to the COVID-19 pandemic prevented prolonged economic pain, particularly in comparison to the Great Recession. Though inflation was pronounced in 2022, inflationary pressures declined in 2023 and 2024 while wages continued to rise, outpacing inflation and bolstering household income.

Unfortunately, Trump administration policies will undermine recent progress and exacerbate economic precarity for low-income households. In the years ahead, the Republican “One Big Beautiful Bill Act” will decimate access to health care and nutrition assistance for the poorest households while providing a massive tax cut for the wealthy—a giveaway that will cause pain for millions of U.S. households. And Trump’s chaotic trade policies and mass deportation agenda will harm U.S.-born and immigrant workers alike. In fact, some of these harms are already being felt. This month’s jobs report showed slowed growth and rising unemployment.

The Trump administration has also taken actions to undermine the work of civil servants who collect and analyze the data summarized here. The Bureau of Labor Statistic and U.S. Census Bureau provide high-quality, nonpartisan economic data that allow policymakers at all levels of government—as well as business leaders—to plan and make decisions that keep our economy functioning. But the Trump administration has implemented deep staffing cuts at federal agencies and politicized the work of economists and statisticians, eroding trust in government and threatening the credibility of future data collection and analysis efforts.

Amid federal attacks on working families, state lawmakers can advance economic justice

While recently released household income and poverty data showed some improvement in 2024, much more progress is needed to address income inequality and disparities by race and gender in every state. For example, policymakers need to raise the minimum wage, increase workers’ access to a union, implement pro-family policies like affordable child care and paid leave, and make our tax system fairer. In the face of anti-worker policies at the federal level, state lawmakers have an opportunity and responsibility to champion policies that enable workers and families to thrive.

Note

1. According to the data released on Tuesday from the Current Population Survey (CPS), U.S. median household income in 2024 was $83,730—a small (1.3%) but not statistically significant change from 2023. The 2024 value was also essentially the same as that from 2019 ($83,260). The ACS data released Thursday show that median household income rose 2.0% nationally from 2023 to 2024. The differences between these values reflect differences in the methodologies of the two surveys that make them not directly comparable; however, the fact that the ACS change was a statistically measurable increase validates the direction of the change reported by the CPS.

Who are low-income families of color?

Families in which the household head identifies as

• Black
• Hispanic
• American Indian or Alaska Native (AIAN)
• Asian American or Pacific Islander (AAPI)

With at least one child under the age of 18 living at home

With a total family income below 200% of the federal poverty line (below $64,300 in 2025 for a family of two adults and two children)

Introduction

Low-income families of color live in a permanent cycle of economic insecurity and uncertainty. These families make up a disproportionate share of the nearly 10 million families with children (9.7 million) who are either poor or vulnerable to poverty. As a result of their economic precarity, these families are among the first to experience the painful consequences of a recession. This was evident during the last two business cycle downturns: the Great Recession and the pandemic recession. We find that these two economic contractions dealt a mighty blow to the employment security of these families, triggering a rise in poverty and housing insecurity.

Given the weak policy response to the Great Recession, it took economically vulnerable families of color nearly a decade to recover in nearly all the economic domains we examine, including employment, poverty status, and housing insecurity. While the bold response to the pandemic recession led to a relatively faster rebound in employment, economically vulnerable families of color remain disproportionately burdened by poverty and housing insecurity.

Instead of easing the pain of economically vulnerable families, the Trump-Vance administration and congressional Republicans have been on the attack in the first half of 2025. They have gone after the agencies, laws, and programs that help protect these families from joblessness, discrimination, poverty, hunger, and premature death. In just its first 100 days, the administration deliberately cut the wages of workers, rolled back protections against bias in employment, and hacked away at staffing at agencies that support the well-being of low-income families (like the Department of Education and the Department of Health and Human Services). As if this weren’t enough, the administration and congressional Republicans prioritized dealing a historic blow to Medicaid and Supplemental Nutrition Assistance Program (SNAP). They cut spending on programs that provide desperately needed health care and nutritional support to families by more than $1 trillion (CBO 2025b).

The chaos and uncertainty ushered in by the economic mismanagement of the Trump-Vance administration even led to the first quarterly contraction in economic growth since 2022. With the prospects of another recession rising, the administration has done everything in its power to leave low-income families even more vulnerable to the pain ahead. As we illustrate in this report, economic downturns hit these families the hardest, and while we’ve learned a great deal since 2007 about how to protect them, the administration has chosen not to build upon those lessons. Instead of protecting the strong labor market they inherited, empowering workers to bargain for better pay and working conditions, and strengthening basic needs programs, the Trump-Vance administration is fighting for an economic agenda centered on austerity for the economically vulnerable and subsidies for the rich.

In just a short period of time, the Trump-Vance administration has left low-income families more economically insecure and vulnerable to pain as recession risks continue to rise

Since taking office, the Trump-Vance administration has worked to dismantle the basic protections that help shelter low-income families from even deeper economic insecurity and hardship. This attack on families has taken the form of executive actions undermining civil and workers’ rights. While some of President Trump’s executive orders have been challenged in court, their introduction has altered the policy discourse and the lived experience of low-income families of color throughout the U.S. with an explicitly racist and xenophobic agenda. Beyond executive actions, the Trump-Vance administration and congressional Republicans also passed one of the most sweeping cuts to the U.S. social safety net in recent history, gutting basic needs programs and making Medicaid and SNAP benefits much more difficult for families in need to access (Shierholz 2025). All of this was done to help offset the cost of tax cuts that disproportionately benefit rich households and corporations (The Budget Lab 2025).

Few policy issues have received as much priority in the Trump-Vance administration as their attack on economic justice and initiatives promoting diversity, equity, and inclusion (DEI). In just his first day in office, President Trump rolled back numerous executive actions expressing the federal government’s commitment to racial justice for Black, Hispanic, Native American, and Asian American, Native Hawaiian, and Pacific Islanders (EPI 2025d). President Trump later also rescinded executive actions that identified systemic barriers impeding Black Americans’ opportunity to fully participate in American society on a level playing field (EPI 2025e). Equity in the classroom is also under attack. This was evident when President Trump rescinded an executive order stating that all students should be guaranteed an educational environment free from discrimination, including discrimination in the form of sexual harassment, sexual violence, and on the basis of sexual orientation or gender identity (EPI 2025c). These efforts form part of more than a dozen executive actions signed by President Trump in his first 100 days to roll back years of progress on racial and economic justice (McNicholas et al. 2025).

The Trump-Vance administration is also working to roll back anti-discrimination protections by weakening the Equal Employment Opportunity Commission (EEOC) (Maye and Wilson 2025). Just days into his second term, President Trump dismissed two EEOC commissioners and the agency’s general counsel, years before the expiration of their appointment (Olson and Savage 2025; EPI 2025b). As a result of these dismissals, the commission lost the quorum needed to perform key functions. Trump has also redirected the EEOC’s priorities to focus more on investigating so-called DEI-motivated race and sex discrimination and anti-American national origin bias and discrimination (EEOC 2025; DOJ 2025). Because wages are the primary source of income for low-income families, weaker enforcement of anti-discrimination laws leaves families of color more vulnerable to employment and pay discrimination in the labor market.

The EEOC is not the only federal body that the Trump-Vance administration has weakened to the detriment of low-income families. In March 2025, President Trump signed an executive order that would effectively eliminate the U.S. Department of Education (ED). The U.S. Supreme Court later lifted a lower court decision that had blocked the administration from firing more than 1,300 employees at ED (Sherman 2025). While the merits of the case before the Supreme Court have yet to be decided, the gutting of ED will disproportionately harm children from low-income families of color that benefit from federal funding for under-resourced schools and programs aimed at closing learning and achievement gaps (Dianis 2025; EPI 2025a; Santhanam 2025).

More broadly, ED serves an essential role in helping enforce Title VI of the Civil Rights Act, which prohibits discrimination based on race, color, or national origin in programs or activities that receive federal financial assistance (ED n.d.). Even the U.S. public health infrastructure is now under attack, as the Trump administration is committed to carrying out layoffs at federal health agencies focused on reducing premature and preventable deaths associated with pervasive racial health disparities (Moore 2025).

President Trump’s attacks on federal agencies that are vital to the provision of public goods and services for families are part of a larger war his administration has waged on workers. In his first 100 days, Trump replaced the leadership of the National Labor Relations Board (NLRB)—the federal agency tasked with protecting the most fundamental U.S. labor rights—with members more likely to carry out his agenda to erode workers’ union and collective bargaining rights (McNicholas et al. 2025). This will hurt the ability of workers to form and join unions at work. Unions are vital to working families, as union workers enjoy better wages and working conditions than their nonunion peers (Banerjee et al. 2021).

Beyond executive actions, the main legislative priority of the Trump-Vance administration imposed more than $1 trillion in cuts to basic needs programs in exchange for continuing a tax regime that overwhelmingly favors rich households and corporations (CBO 2025b; Shierholz 2025). Extending the 2017 tax cuts that President Trump enacted in his first term will not just favor the rich disproportionately. On its own, this extension can even suppress economic growth over the long run and leave policymakers with significantly less room to respond to another recession (Bivens 2025b). To help offset the cost of these large tax cuts to the rich, the Republican-led budget reconciliation bill that Trump signed into law adds more stringent work requirements to Medicaid and SNAP on top of historic cuts.

This combination will leave more than 22 million families at risk of losing some or all of their SNAP benefits and strip away health coverage for more than 11 million people (CBO 2025a; Wheaton et al. 2025). These cruel and misguided efforts will disproportionately hurt low-income families of color and children who are more likely than their peers to rely on Medicaid and Children’s Health Insurance Program (CHIP) for health insurance, and SNAP and other nutritional assistance programs to avoid going hungry in the face of growing food insecurity (Cid-Martinez, Moore, and Maye 2025; Cid-Martinez 2025).

In its totality, the policy positions President Trump has advanced in his first 100 days via executive orders and legislative priorities will leave low-income families of color and children much more vulnerable to hardship. In the face of a recession, which is no longer a hypothetical scenario, the consequences would be devastating. The Bureau of Economic Analysis (BEA) reported the first quarterly contraction of economic growth since 2022, and while growth climbed again in the second quarter, the U.S. economy is now growing significantly slower in the first half of 2025 than in the previous year (BEA 2025). And the chaotic economic climate that the current administration has generated with its trade, immigration, and macroeconomic policy management has increased the prospects of a recession (Bivens 2025a).

The fear of an approaching recession increased with the downward revision of employment gains that defined the weak jobs report published in August 2025 (EPI Staff 2025). What we see in the first half of 2025 is an economy being held back by anemic growth and a deteriorating labor market.

The upheaval that this administration has produced leaves low-income families of color exposed to future hardship. Without a bold policy response to recessions and the support of a strong welfare state, these families are hit hardest by economic downturns and sluggish economic recoveries (Bivens et al. 2025). This report sheds light on this reality by examining how the last two recessions impacted the well-being of low-income families, as captured by their employment situation, poverty status, and housing insecurity.

Low-income families of color with children and the last two recessions

What do we mean by low-income families of color with children?

The sample of families included in this analysis are those in which the household head has at least one child of their own, under age 18, living at home. Within these households, there may also be other members who have children under 18. Families of color are broadly defined as those whose household head identifies as Black, Hispanic, American Indian or Alaska Native (AIAN), or Asian American or Pacific Islander (AAPI).[1]

We further restrict this sample to a subset of economically vulnerable, or low-income, families, defined as having total family income below 200% of the federal poverty threshold.[2] To place the poverty threshold in context, the federal poverty line (FPL) for a single individual in the 48 contiguous states (excluding Alaska and Hawaii), and Washington, D.C., is $15,560 in 2025. While the FPL increases by $5,500 for each additional family member, a year-round worker earning the federal minimum wage ($7.25 an hour) can’t afford to keep their family out of poverty in 2025 (Hickey and Cid-Martinez 2025). For the remainder of this report, we will use families (of color) to refer to families (of color) with children, and the terms “economically vulnerable” and “low income” will be used interchangeably.

Drawing a demographic portrait of economically vulnerable families

While our main economic analysis is focused exclusively on Black and Hispanic families due to data limitations associated with the sample size of other groups, this section provides a demographic picture of low-income families of color more broadly. Table 1 shows low-income families by race and ethnicity, using data from the 2023 American Community Survey (ACS). As depicted in Table 1, families of color are generally overrepresented among the 9.7 million families with children that are economically vulnerable. While Black, Hispanic, AIAN, and AAPI families collectively account for 44.4% of all families with children, they represent 61.1% of economically vulnerable families with children. Although white families make up a larger share of low-income families than any other single racial or ethnic group, they are underrepresented among low-income families (38.9%) relative to their share of all families (55.6%).

More than 3 in 10 (32.6%) low-income families are Hispanic and more than 1 in 5 (21.5%) are Black. Together, Black and Hispanic families represent more than half (54.1%) of all low-income families with children, but just over one-third (35.1%) of all families with children. While less than 1.5% of all families are AIAN, they too are slightly overrepresented (1.8%) among the economically vulnerable. AAPI families account for 7.9% of all families and 5.2% of economically vulnerable families; however, the aggregate socioeconomic status of AAPI families hides important differences that become evident when we separate groups by country of origin (Cid-Martinez and Marvin 2023).

Immigrant families also make up a disproportionate share of low-income families and are especially prevalent among low-income Hispanic and AAPI families. Foreign-born families made up 23.6% of all families in 2023, but a higher share (30.5%) of low-income families were immigrant families. Slightly more than 8 in 10 (81.1%) economically vulnerable AAPI families are foreign-born, as are more than 6 in 10 (61.9%) comparable Hispanic families.

Beyond economic insecurity, these families face ongoing threats under Trump’s draconian mass deportation agenda, which the administration and congressional Republicans bolstered with new financing in the budget reconciliation bill that Trump signed into law (Costa 2025; NIJC 2025). These attacks on immigrant families and the immigrant workforce will also have ripple effects on the labor market, costing the U.S. economy nearly 6 million jobs, particularly in construction and child care (Zipperer 2025). All of this will also put upward pressure on food and housing prices (McNicholas et al. 2025).

In terms of family structure, low-income families are generally more likely to be headed by women or a non-married household head.[3] However, one finds noticeable variations in these patterns across racial and ethnic groups. For example, Black and AIAN families are most likely to be headed by women, 78.7% and 69.5% respectively, compared with less than half (43.3%) of low-income AAPI families. There are also differences in marital status. Low-income AAPI families are significantly more likely to be led by a married couple (76.2%), compared with about half of white (50.5%) and Hispanic (51.6%) families. More than one-third of low-income AIAN families and one-quarter of low-income Black families are led by married couples. Apart from Black families, less than 1% of low-income families report having a partner or spouse of the same sex in 2023. Because most low-income Black families are headed by women, attacks on women’s reproductive rights, along with efforts to undermine nondiscrimination enforcement for racial and ethnic minorities, women, and LGBTQ+ individuals, impose additional disadvantages for these families.

Economically vulnerable families are also more likely to have more than one child (under age 18): 67% of low-income families have two or more children, compared with 58.7% of all families. However, among low-income families, there is little variation in the number of children across racial and ethnic groups. For example, about two-thirds of all low-income families has two or more children, and only 12.6% have four or more children.

The share of low-income families with either a disabled child or parent of a child shows considerable variation across race and ethnicity. AIAN families stand out as having the highest prevalence of disability. About 1 in 3 (33.7%) AIAN households has a parent or child with a disability. Similarly, more than one-quarter of white families, and more than 1 in 5 Black and Hispanic households have a parent or child with a disability. AAPI households had the smallest share (16.2%) of households with a disabled parent or child.

The share of low-income families that is a part of intergenerational households varies significantly by race and ethnicity group. More than 1 in 8 (13.1%) AAPI households are multigenerational or intergenerational, followed by 7.8% of Hispanic households and 5.9% of AIAN households. Economically vulnerable white families are the least likely to be intergenerational, as less than 4% have a grandparent in the household.

Table 1

The Great Recession and the pandemic recession: Differences and similarities

As this report contrasts the economic experience of families during two different recessions, it is important to first understand the severity and duration of these events.

By official accounts, the Great Recession began in December 2007 and ended in June 2009, representing the longest economic downturn to impact the U.S. economy in the postwar period (NBER 2010). We assess the severity of the Great Recession by examining the impact that it had on the labor market via the employment situation of workers of color (EPI 2025g). These workers are among the first to lose a job during a downturn of the business cycle. Between 2007 and 2010, for example, the unemployment rate for Hispanic workers more than doubled, rising from 5.6% to 12.5%. Similarly, the unemployment rate for Black workers shot up from 8.3% in 2007 to 15.9% in 2010. While the recession had been declared officially over by 2009, it took nearly a decade for the unemployment rate of workers of color to fully recover. This prolonged suffering was largely due to the anemic policy response that followed the Great Recession, largely characterized by austerity measures at both the federal and state levels (Bivens 2019; Bivens 2011). 

Compared with the Great Recession, the pandemic recession was considerably shorter. Officially, the pandemic recession only lasted two months, from February 2020 to April 2020, making it the shortest economic contraction in U.S. history (NBER 2021). But this doesn’t mean that the impact on workers was less severe. Just between February 2020 and April 2020, the unemployment rate for Hispanic workers more than tripled, and that of Black workers more than doubled.

Unlike previous contractions, the economic impact on women was particularly pronounced (Alon et al. 2021).[4] By April 2020, more than 1 in 5 (20.3%) Latina workers were out of a job and seeking employment, as the unemployment rate of these workers quadrupled between February and April of that year.[5] Similarly, the unemployment rate of Black women more than tripled during this period, rising from 5% in February 2020 to 16.4% in April 2020.[6] The nature of the economic shock explains much of the disproportionate impact on these workers, as the public health crisis and mitigation efforts fell most heavily on low-wage industries and occupations in which women of color are overrepresented due in large part to occupational segregation (Wilson 2020).

Despite the sharp rise in joblessness caused by the pandemic recession, the economic suffering didn’t last as long as during the Great Recession. Within two years, the unemployment rate for Black and Hispanic workers had fully recovered to 6.2% and 4.3% respectively, reaching historical lows (EPI 2025g). Black women and Latinas experienced similar rebounds; by 2022, the unemployment rate for Black women and Latinas (at 6.2% and 4.4% respectively) was among their lowest in recorded history (EPI 2025g). This swift and atypically even rebound was not just a function of a much shorter recession. As we detail later in this report, the swift and bold policy response to the pandemic and the economic contraction that followed was qualitatively different from that of previous recessions in the United States. Rather than the austerity and conditional support provided during the Great Recession, policymakers responded to the pandemic crisis with more generous cash transfers and extended support for unemployed workers and families with children.

Weathering crises: How did the last two recessions impact the employment security, poverty status, and housing insecurity of economically vulnerable families?

In this section, we examine how the Great Recession and the pandemic recession impacted the well-being of low-income families in three domains: their employment security, poverty status, and housing insecurity.

Employment security: Labor market attachment of families and employment rate of parents

One way of assessing the impact that business cycle downturns have on the economic well-being of families is by examining the impact that these events have on their employment security and attachment to the labor market. Since earnings represent the primary source of income for most families, involuntary separation from the labor market is likely to magnify the economic hardship experienced by these households. In this section, we examine changes in the labor market attachment of economically vulnerable families by looking at the share of families with at least one full-time earner and by capturing shifts in the employment rate of parents between the ages of 25 and 54.

Labor market attachment

Given the importance of work for low-income families, the prevalence of full-time employment in the household provides a measure of their attachment to the labor market. On average, more than two-thirds of low-income families had at least one full-time earner before the Great Recession. However, as can be seen in Figure A, differences in attachment existed by race and ethnicity even before the crisis. In 2007, 63.6% of Black families had at least one full-time earner, compared with more than 67.7% of white families and 77.7% of Hispanic families.

The Great Recession, and the weak policy response that followed, left a major dent in the labor market attachment of families. By 2010, the attachment gap between white and Black families had widened, as only 56% of Black families had at least one full-time earner that year, compared with 63.1% of their white counterparts. The share of low-income Hispanic households with at least one full-time earner also fell by nearly 10 percentage points, from 77.7% in 2007 to 68.1% in 2010. Comparatively, the rate of attachment for white families dropped by less than five percentage points during this period. While Hispanic families were more likely to report a stronger attachment to the labor market than their white peers, this advantage declined during the crisis and its aftermath. Overall, Black and Hispanic families took nearly a decade to recover, as their attachment to the labor market remained below the pre-crisis level in 2016. 

Leading to the COVID-19 pandemic and the recession, families of color regained a significant measure of the employment they had lost during the Great Recession. By 2018, for example, 64.4% and 76.6% of Black and Hispanic families respectively had at least one full-time earner. Largely due to the much shorter duration of the contraction and the robust policy response that followed, the pandemic recession had a much more muted impact on the labor market attachment of these families. Between 2018 and 2020, the share of economically vulnerable families of color with at least one full-time earner in the household declined only marginally, by about three percentage points for Black and Hispanic families.

By 2022, the share of Black families with a full-time earner had rebounded to 68.1%. This figure was nearly identical to the attachment rate for white families in the same year, and it represented the highest rate for Black families since 2007. While that number declined in 2023, it was still higher than in most years since 2007. On the other hand, by 2023, Hispanic families continued to lag considerably behind their 2007 peak.

Figure A

Employment rate of prime-age low-income parents

Examining changes in the prevalence of full-time earners within the household can provide us with a sense of the impact that crises have on the annual labor market attachment of families. But it does not capture monthly changes in the employment situation of parents over the business cycle. This is particularly important in the context of the pandemic recession since it represents the shortest economic recession in U.S. history. To best capture the impact that this economic contraction had on the employment situation of economically vulnerable parents of color, we examine changes in the employment-to-population (EPOP) ratio of low-income parents between the ages of 25 and 54.

In Figure B, prime-age Hispanic parents enjoyed higher employment rates than their Black and white peers before the pandemic. This pattern is also consistent with those shown in Figure A. Leading to the pandemic in January 2020, 94.7% of low-income Hispanic parents between the ages of 25 and 54 were employed, compared with 89.8% of white parents and 88.6% of Black parents, who face the greatest employment disadvantage historically.

As evidenced in Figure B, the gap in employment between Black and white prime-age parents widened during the pandemic recession. Much of this is explained by the disproportionate impact that the pandemic recession had on parents of color. Between January 2020 and April 2020, the employment rate of prime-age low-income Black and Hispanic parents plummeted by more than 32.7 and 27.0 percentage points respectively. By April 2020, only around half (55.9%) of prime-age Black parents had a job. At this point, prime-age Hispanic parents also saw their employment rate drop to a low of 67.7%. While the employment rate of white parents declined by 17.6 percentage points between January 2020 and April 2020, these parents remained about 29% and 7% more likely to be employed in April 2020 than their Black and Hispanic peers respectively. 

While the employment rate of parents of color declined to historically low levels in 2020, the bold policy response to the pandemic recession led to a quick rebound in the labor market. By the end of 2023, 88.9% of prime-age low-income Black parents and 91.6% of their Hispanic peers had a job. The strong recovery of parents of color also helped narrow the racial gaps in employment seen at the height of the pandemic recession in April 2020.

Figure B

Poverty status: Prevalence of poverty and severe poverty

As low-income families are largely dependent on wage earnings to meet their financial obligations, business cycle fluctuations can significantly affect their economic vulnerability. Without a proportional policy response or adequate social protection systems, these families are the first to fall victim to material hardship during an economic downturn. The Great Recession and the pandemic recession exemplify this, as these crises pushed more low-income families of color into poverty and severe poverty. This is evident when we examine changes in the prevalence, severity, and distribution of poverty over time.

Prevalence of poverty

Leading to the Great Recession, economically vulnerable Black and Hispanic families were more likely than their white peers to fall below the federal poverty line (FPL).[7] In 2007, more than half (53.6%) of low-income Black families were poor, relative to 44.6% and 38.7% of Hispanic and white families respectively (see Figure C). The Great Recession and the inadequate policy response to the downturn pushed a larger share of these families into poverty quickly and for a prolonged period of time. By 2010, more than half (51.2%) of Hispanic families fell below the FPL. The poverty rate for Black families continued to rise the following year, reaching nearly 6 in 10 (58.5%) in 2011. The poverty rates of both Hispanic and Black families did not return to pre-Great Recession levels until 2015, more than half a decade later. While racial gaps first widened and then narrowed throughout the crisis and the slow recovery, poverty rates remained much higher among Black and Hispanic families, relative to their white counterparts. 

By the lead-up to the COVID-19 pandemic and the recession that followed, the poverty rates of families of color were lower than they were in 2007, but a large racial poverty gap remained. While less than half (49.3%) of Black families fell below the FPL in 2018, they remained about 30% more likely to suffer material hardship than their white peers.

Largely because of policy, the material situation of families was not impacted as severely by the pandemic recession as it was during the Great Recession. While Hispanic families experienced a marginal increase in poverty between 2019 and 2022, rising by 3.3 percentage points (relative to the larger increase, of 6.6 percentage points, during the previous downturn), the share of Black families that fell below the FPL during this period declined. By 2022, low-income Black families recorded the lowest poverty rate (44.1%) in the entire period between 2007 and 2023. After economic relief measures expired, poverty rates were relatively stable for Hispanic families but had increased for Black families.

Figure B

Prevalence of severe poverty 

Economic downturns don’t just push economically vulnerable families into poverty. Without the support of a strong social safety net, families can fall deeper into economic deprivation when parents lose their jobs during a recession. The parents struggle to make ends meet and provide their children with the resources they need to flourish and to participate in society without shame. This happened far too often during the Great Recession as an increasing share of low-income families experienced severe poverty, with an income below half (50%) of the federal poverty line. To place this figure in context, the severe poverty threshold for the 48 contagious states and Washington, D.C., amounts to $7,825 annually for a single individual in 2025 (HHS n.d.).

Before being hit by the Great Recession, more than 1 in 4 (26.1%) Black families suffered severe poverty in 2007 (see Figure D). At this stage, Black families were about 61% more likely than their white peers to fall among the poorest of the poor. While Hispanic families fared relatively better in 2007 (with a severe poverty rate close to that of white families), disparities quickly widened. By 2010, more than 1 in 5 (21.6%) Hispanic families fell among the poorest of the poor, and an even larger share (30.3%) of Black families experienced similar material hardship, compared with 18% of their white peers. The anemic policy response to the Great Recession left an elevated share of these families under a prolonged state of economic deprivation until about 2015.

The strong policy response to the pandemic recession prevented a large uptick in the prevalence of poverty, especially for Black families, but severe poverty rates rose significantly for families as the material shortcomings of the most vulnerable worsened. Between 2018 and 2020, the share of Black families that fell among the poorest of the poor increased by 4.7 percentage points, from 22.5% to 27.2%. Hispanic families fared slightly better, as the severe poverty rate for these families rose from 15.6% in 2018 to 18.9% in 2021.

While the exposure of families of color to severe poverty fell in 2022, reaching a historic low of 22% for Black families, severe poverty again rose once economic relief measures ended. By 2023, the share of Black and Hispanic families among the poorest of the poor remained above the pre-recession levels of 2018. In contrast, severe poverty among white families had returned to the pre-recession rate by 2023.

Figure D

Housing insecurity: Prevalence and severity

Business cycle downturns that lead to significant job losses don’t just leave low-income families more vulnerable to poverty. Recessions also leave families much more exposed to housing insecurity, irrespective of whether these families own or rent their homes. As we illustrate below, this is because housing represents a significant expense for resource-constrained families. Low-income families of color are particularly vulnerable to even more pain during downturns as they are also forced to contend with an economy that suffers from an obstinate deficit in affordable housing and one in which the housing and lending markets have historically discriminated against them (Moore and Maye 2024).

In this section, we examine the impact that both the Great Recession and the pandemic recession had on the rent and homeownership rates of families of color. We also look at how the cost burden of housing evolved for both renters and homeowners during and after the crises.

Renters and housing insecurity

Given the high economic barriers to homeownership, Black and Hispanic families are generally more likely to rent, relative to their white peers (see Appendix Table 1). But, as homeownership rates declined during the Great Recession, the share of low-income families who rent has increased. Leading to the COVID-19 pandemic, in 2018, more than 80% of Black families and more than 70% of Hispanic families were renters. In contrast, slightly more than half (55.3%) of white families rented their homes that same year. While the share of renters was lower post-pandemic, racial gaps widened in 2023 with Black and Hispanic families being 61% and 36%, correspondingly, more likely to rent than their white peers.

The pandemic and the short economic downturn that followed exacerbated the already precarious position that low-income renters found themselves in after the Great Recession. By 2017, nearly a decade after the Great Recession, the share of economically vulnerable families that spend 30% or more of their income on rent remained above the pre-recession levels of 2007 (see Figure E). In 2018, for example, more than 8 in 10 Black and Hispanic families that rent were housing poor. The strong pandemic recovery did little to shelter these families from the housing affordability crisis in the U.S. that was amplified by the global health crisis (Moore and Maye 2024). By 2023, racial gaps had widened as the share of Black and Hispanic families that spend over 30% of their income on rent climbed above the peaks reached in the aftermath of the Great Recession.

Figure E

The impact of the last two recessions on families fell most heavily on those that spend more than half of their income on rent. While some of these renting families had recovered by the time that the pandemic recession rolled in, the share of Hispanic families experiencing severe housing insecurity remained above pre-recession levels in 2019 (see Figure F). Black families were particularly disadvantaged. Nearly half (48.3%) of low-income Black families spent over half of their income on rent in 2019. The situation quickly worsened for all families, as the strong economic recovery failed to protect these families from the growing affordability crisis in housing. By 2023, a higher share of white, Black, and Hispanic families spent more than half of their income on rent than at any other point since 2007. Low-income Black and Hispanic families remain most disadvantaged, as more than half of these families spend over 50% of their income on rent.

Figure F

Homeowners and housing insecurity

The Great Recession deepened the racial divide in homeownership rates, as families of color were disproportionately touched by the crisis (see Appendix Table 1). The share of low-income Black families that owned their home declined from 21.5% in 2007 to 15.7% in 2016, and from 34.6% to 28.3% during the same period for their Hispanic peers. By 2017, a decade after the start of the crisis, the homeownership rate of families had yet to recover, and racial disparities had widened. At this stage, economically vulnerable white families were 169% and 48% more likely than their Black and Hispanic peers respectively to own their home. 

Despite the steep gaps in homeownership, the pandemic recession didn’t quite lead to a suppression of homeownership rates for families. Partly as a function of younger households transitioning toward ownership, low interest rates, and the generous (albeit temporary) economic relief measures enacted in response to the pandemic recession, the downturn failed to reverse the gains in homeownership that economically vulnerable families of color were already experiencing in 2018 and 2019 (Sanchez-Moyano 2024; Callis 2023).

By 2023, slightly more than one-third (34%) of low-income Hispanic families owned their home, compared with about 3 in 10 (29.7%) in 2018. Black families also experienced gains. During this period, the homeownership rate of low-income Black families increased by 5.3 percentage points, from 16.4% in 2018 to 21.7% in 2023. By 2023, the homeownership of low-income Black and Hispanic families had achieved a near full recovery from both the Great Recession and the pandemic recession. While these achievements in homeownership helped narrow racial disparities, economically vulnerable families of color remained significantly less likely to own their homes in 2023 compared with their white peers.

While owning a home can be an important step toward wealth creation, economically vulnerable homeowners spend a significant share of their income on housing costs associated with mortgage payments, taxes, insurance, and more (U.S. Census Bureau 2004). Leading to the pandemic recession, Black homeowners remained more likely to spend over 30% of their income on housing costs (see Figure G). At this stage in 2019, 65.2% of economically vulnerable Black families who owned their homes were housing poor, compared with fewer than 6 in 10 Hispanic and white families. Despite the economic relief measures that helped economically vulnerable families weather the shock of the pandemic recession, housing insecurity rose for nearly all families. By 2023, a slightly higher share of Black and Hispanic families who owned their homes spent over 30% of their income on housing than in 2019.

Figure G

The impact of the pandemic recession and the increasing cost of housing in the U.S. is even more evident when we examine the situation of low-income families suffering from severe housing insecurity (Moore and Maye 2024). These are homeowning families who spend over half of their income on housing. Despite the short duration of the most recent downturn, the share of economically vulnerable families who face severe housing insecurity climbed by more than four percentage points between 2019 and 2023 (see Figure H). By 2023, Black families remained disproportionately vulnerable to economic pain with a prevalence of severe housing insecurity comparable to the hardship they experienced in the lead-up to the Great Recession. Since 2007, more than 2 in 5 economically vulnerable Black families who own their homes were unable to escape severe housing poverty as a result of having to spend over 50% of their income on housing costs.

Figure H

Lessons learned: Key policy choices that made a difference during the pandemic recession and are still needed to break the cycle of economic vulnerability for families

By nearly every measure of economic well-being examined above, low-income families of color weathered the pandemic recession better than the Great Recession largely because of policy choices. The weak policy response to the Great Recession, centered on austerity at the federal and state levels, contrasted sharply with the bold response to the pandemic recession guided by economic relief measures and public investments. This enabled families to avoid a prolonged separation from the job market and a worsening of their material conditions.

The last two recessions and their distinct recoveries left us with a clear blueprint for action. The economic lessons are not unfamiliar:

• Full employment policies that create tight labor markets also promote economic equity for workers and their families.
• Good jobs are union jobs.
• A strong social safety net helps families avoid unnecessary and scarring economic deprivation.

Breaking the vicious cycle that leaves low-income families more susceptible to hardship during recessions will require a renewed commitment to full employment, stronger worker rights and unions, and a robust welfare state that meets the needs of families and children. While the policies that can accomplish these objectives commonly face political headwinds, actions taken by the Trump administration and Congress will create even worse conditions.

Full employment policies are equity-enhancing policies 

While economists debate the overall rate of unemployment that constitutes full employment, there is less debate about the equity-enhancing effects of a tight or “high-pressure” labor market, one in which willing workers can obtain access to a job and the working hours they prefer (Bivens 2021; Bivens and Zipperer 2018). Sustained periods of low unemployment can effectively boost the earnings of low-wage workers and help narrow persistent racial disparities in a labor market that disproportionately disadvantages the employment situation of workers of color and the economic well-being of their families (Wilson 2023; Bivens 2021). The narrowing of these gaps would not constitute full healing from the legacy and continued expression of structural racism and xenophobia in the U.S. economy, but it would be a step in the right direction. Historical evidence points to increased economic equity via low unemployment and rapid job growth. 

The recent economic recovery from the COVID-19 pandemic and the economic contraction that followed serves as a good example of a policy regime that aimed, in large part, to provide a strong or high-pressure labor market. Unlike the economic recovery from the Great Recession, the rebound from the pandemic recession has been characterized by bold fiscal policies, via much-needed relief and strategic public investments, and more accommodating monetary policy that kept downward pressure on unemployment (Wilson 2023; Bivens 2024; Bivens 2016). The results of this policy regime are unambiguously clear: Workers of color made historic gains over the last five years in both employment and earnings, with Black and Hispanic real wages (adjusted for inflation) growing more than three times faster over the last five years than the four decades prior (Cid-Martinez, Maye, and Marvin 2025).

Instead of providing continuity to the economic regime they inherited, the Trump-Vance administration is pursuing a macroeconomic and trade policy that is sowing economic uncertainty and chaos and has already led to a contraction of economic growth in the first quarter of 2025.

Unions help narrow economic disparities that hurt workers and their families

It is easy to envision growing income disparities that threaten the economic security of working families as endemic features of the U.S. economy. Between 1979 and 2023, for example, the real annual earnings for the top 1% of earners increased by 181.7%, while the earnings for the bottom 90% grew just 43.7% (Gould and Kandra 2024). This economic divide mirrors another increasing gap between economywide productivity and the hourly pay of the typical worker, a gap that is even more pronounced for the typical Black and Hispanic worker (Moore and Banerjee 2021). But none of these trends is inevitable.

Behind these rising inequities one finds a wide range of deliberate policies choices that have weakened labor standards and stripped workers of their ability to bargain collectively for better compensation and working conditions (Mishel and Bivens 2021), including the erosion of union membership since the late 1950s (Bivens et al. 2023b).

Workers of color have been disproportionately touched by the decline of union density in the U.S. economy since they typically receive a larger wage boost from union membership. Compared with the premium of the average worker, the union pay premium is higher for Black and Hispanic workers (Bivens et al. 2023a). Black workers, for example, are more likely than white workers to be unionized (13.1% vs 11.2%), and the wage advantage unionized Black workers receive from being covered by collective bargaining is 12.6% (EPI 2025f; EPI 2025h). This premium is higher than the 11.9% average wage premium for unionized white workers. While Hispanic workers have slightly lower union coverage (9.7%) than white workers, they claim a higher union wage advantage of 16.4%.

Unions can also protect workers from discrimination and improve working conditions. Because private employment in the U.S. is for the most part “at will,” employers can terminate workers for nearly any reason, without providing notice or severance. This power imbalance harms workers of color disproportionately, as they are more likely than their white peers to report unfair dismissals (Bivens et al. 2023a). Unions protect these workers with the provision of “just cause” rights that shelter workers from discriminatory and retaliatory practices and unfair dismissals. Unions also offer workers better employment conditions. This is important for economically vulnerable families who face care needs alongside scarce resources. Unionized workers, for example, are more likely than their nonunion peers to have access to paid sick days and employer-sponsored health and retirement benefits (Shierholz et al. 2024).

Low-income working parents stand to gain the most from union membership. However, few of them belong to a union. Only 8% of prime-age Black parents and 4.9% of Hispanic parents belonged to a union in 2023. Similarly, only 5.3% of economically vulnerable white parents between the ages of 25 and 54 belonged to a union in the same year.

Instead of strengthening the rights of workers to bargain collectively, President Trump has openly embarked on an anti-worker agenda centered on weakening the federal agency tasked with protecting the most basic and fundamental U.S. labor rights, the National Labor Relations Board (McNicholas et al. 2025). These efforts will leave families of color much more vulnerable to discrimination in the labor market and to wage theft and mistreatment at work.

The social safety net expanded in response to the pandemic, which demonstrated that poverty remains a policy choice

The welfare of economically vulnerable families of color and their children is not an insurmountable problem beyond the reach of public policy. This became most evident during the COVID-19 pandemic. The federal government responded to this crisis boldly with an array of economic relief measures, such as economic impact or stimulus payments; with provisional expansions of social programs like the Supplemental Nutrition Assistance Program and the unemployment insurance (UI) program; with temporary enhancements of tax credits, such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC); and with increased federal assistance to state and local governments. Overall, these measures kept millions of people out of poverty in 2021 (Banerjee and Zipperer 2022). The economic impact or stimulus checks alone kept nearly 9 million people out of poverty in 2021, including more than 2 million children (Shrider and Creamer 2023).

The expanded social safety net had a notable impact on alleviating the material hardship experienced by families of color. This is most evident when we look at trends in the prevalence of child poverty. For this, we rely on child poverty rates based on the Census Bureau‘s Supplemental Poverty Measure, which accounts for cash and in-kind transfers as well as geographic differences in housing costs. By this measure, the post-pandemic social policy regime looks particularly effective in its ability to reach children of color and to alleviate the human suffering that accompanies deprivation at a young age. Between 2019 and 2021, for example, child poverty rates fell by more than half across nearly all groups, reaching their lowest levels in recorded history (see Figure I). Before the pandemic, more than 1 in 5 Black and Hispanic children fell below the supplemental poverty line in 2019. By 2021, these rates plummeted by nearly 60%, as the Black and Hispanic child poverty rate dropped to 8.3% and 8.4% respectively. The Asian American and AIAN child poverty rates also declined by more than 40% during this period, reaching historic lows of 5.1% and 7.4% respectively in 2021.

Many of the gains in poverty reduction were driven by the expansion of the Child Tax Credit (Gould 2022). Relative to all income transfers in 2021, the expanded CTC drove an estimated 44% of the reduction in child poverty that year (Parolin 2023). The impact was especially pronounced for children of color (Burns and Fox 2022). For example, this expanded credit lifted an estimated 1.2 million Hispanic children out of poverty in 2021. Similarly, more than 700,000 Black children and over 100,000 Asian children avoided falling below the supplemental poverty line in 2021 because of the expanded CTC. The rest of the social policy levers (aside from Social Security) that drove the bulk of the historic reduction in child poverty had also been provisionally expanded under the American Rescue Plan Act (ARPA), including EITC, SNAP, and UI benefits.

Despite the powerful effect these measures had in extinguishing poverty, nearly all the enhanced social safety net measures under ARPA expired by 2022. This purposeful expiration erased the bulk of the gains in poverty alleviation that families and children of color had achieved economically in 2021 (Cid-Martinez and Zipperer 2023). This is evident when we examine how the end of the expanded welfare state impacted the prevalence of poverty for children of color. Between 2021 and 2023, the poverty rates of Black, Hispanic, Asian, and AIAN children had more than doubled, returning to or exceeding 2019 levels (see Figure I). This increase marked an obliteration of the gains achieved in poverty reduction between 2019 and 2021. In fact, by 2023, the poverty rates of all groups were either higher, or no different, than the pre-pandemic estimates of 2019. 

Instead of expanding the CTC to help more low-income parents meet the basic needs of their children and reduce poverty, the Republican-led budget reconciliation bill that Trump signed into law fails to increase benefits for the 17 million children who receive less than the full value of the credit because their parents earn too little to meet the earnings requirement (Maag 2025). The Republican law is also particularly harmful to children of migrant parents, as it revokes the credit eligibility of children that are U.S. citizens if both spouses in a married couple lack a Social Security number (Tax Policy Center 2025). At least one spouse will now need to have a Social Security number in order for a U.S. citizen child to qualify for the CTC. While the Republican law increases the maximum credit from $2,000 to $2,200 per child, no significant changes in the refundability structure and earnings requirement mean that CTC benefits will remain out of reach for the children of the poorest of the poor, while middle- and high-income families continue to receive most of the benefits (Collyer et al. 2025; Crandall-Hollick, Maag, and Jha 2025).

The Republican budget reconciliation bill that the president signed into law also missed an opportunity to break the cycle of economic vulnerability that poor children face with the “Trump accounts.” These new tax-free investment accounts will provide a single government contribution of $1,000 to every child born in the next four years (Hamilton and Pressley 2025). The current administration is also discussing these accounts as a “back door for privatizing Social Security,” a program that helps narrow racial and income disparities, lifting more than one million children out of poverty in 2023 (Price and Mascaro 2025; Morrissey and Bivens 2025; Shrider 2024).

Unlike the more popular Baby Bonds, which require sustained contributions from the federal government throughout childhood with the goal of narrowing the racial wealth gap, the Trump accounts are built on the mistaken premise that low-income families lack an incentive to save when the real issue is that they lack enough discretionary income to put into a savings account (Markoff, Radcliff, and Hamilton 2025). The employment, income, and wealth disadvantages that low-income families with children face leave them in a perennial struggle to access basic necessities like health care, housing, and child care. These families are often an emergency away from falling into poverty or severe poverty. Helping families escape this generational challenge will require more than a new savings vehicle that will further widen the divide between the rich and poor by providing yet another giveaway to rich families.

Figure I

Conclusion

Low-income families of color were disproportionately impacted by the economic suffering that came in the wake of the last two recessions. Both the Great Recession and the pandemic recession worsened the employment security, poverty status, and housing insecurity of these families. In contrast with the Great Recession, policymakers responded to the pandemic with a show of strength that helped families recover their employment and bounce back from poverty significantly faster. But housing insecurity and poverty continue to leave these families particularly vulnerable when the next recession strikes.

While the prospects of a recession continue to rise due to the chaos and uncertainty generated by the Trump-Vance administration, they are deliberately ignoring the lessons of the past. This administration has failed to protect the strong labor market they inherited, has failed to empower workers to bargain for better pay and working conditions, and has failed to strengthen basic needs programs. Instead, the administration is proudly advancing an economic agenda that forces austerity on low-income families, strips away protection from discrimination for people of color, and offers more tax cuts for those who do not need it—the ultrarich. This economic agenda will push even more families into poverty and prolong the pain that follows a recession.

Appendix

Appendix Table 1

Acknowledgments

Support for this research was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.

Notes

[1] Our classification of race and ethnicity is mutually exclusive, such that white families are non-Hispanic white, and Black families represent all families in which the head identified their race as Black in combination with other races. Hispanic families include those in which the head identified Hispanic origin, irrespective of race. Among the remaining pool, those who identified as American Indian in combination with other races are listed as AIAN, and respondents who identified as Asian or Pacific Islander in combination with other races (such as Asian and white or Pacific Islander and white) are listed as AAPI.

[2] Total family income is the sum of the individual incomes of each family member. Because unmarried partners are nonrelated household members, the unmarried partner’s total income is not incorporated in the primary family’s total family income. In cases where the income statuses of the household head and the unmarried partner are different, we use the income status of the household head.

[3] Similarly to race and ethnicity, the marital status of the family is informed by the status of the household head, such that married captures respondents who identify as married, irrespective of the presence of the spouse. All other responses are classified as not married.

[4] As we point out below, this disproportionately affected low-income families of color,  which are more likely to be headed by women.

[5] The unemployment rate here is captured by the seasonally adjusted unemployment rate of Hispanic women, 20 years old and over.

[6] The unemployment rate here is captured by the seasonally adjusted unemployment rate of Black women, 20 years old and over.

[7] This federal poverty line is informed by the official poverty measure (OPM) published annually by the Census Bureau since 1967. This measure uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. While the Supplemental Poverty Measure (SPM) is considered to be a more accurate and comprehensive measure because it accounts for government transfers and geographic cost-of-living expenses, including housing, published estimates only go back to 2009 (Shrider 2024). For the purpose of this analysis, we rely on OPM to capture the impact of both the Great Recession and pandemic recession.

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Set at an adequate level, the minimum wage is one of the strongest policy tools for improving the economic security of low-wage workers, and an effective tool at lowering poverty. Yet instead of addressing this massive hole in our economy’s social safety net by working to raise the minimum wage, congressional Republicans are pushing policies like imposing work requirements on safety net programs and cutting Medicaid. Supporters of these proposals characterize them as tools to incentivize work and protect the dignity of work, but these policies fail to account for the nature of low-wage work in our economy. Instead, they stand to deepen hardship for low-income workers with no economic upside for working people or the larger economy.

The minimum wage and the federal poverty line

When the minimum wage was created as part of the Fair Labor Standards Act in 1938, the policy was intended to protect the nation from “the evils and dangers resulting from wages too low to buy the bare necessities of life.”1 The federal wage floor is clearly not fulfilling this objective anymore because of a historically long period of inaction by Congress. The last time Congress increased the federal minimum wage was in July 2009, meaning that as prices have risen over the last 15 years, the value of the minimum wage has fallen by 30%. Figure A shows how annual earnings for a full-time minimum wage worker fall short of the poverty line for a household of any size.

Figure A

This comparison severely understates the economic vulnerability of these workers and their families. This is because the federal poverty guidelines—which are used at the federal, state, and local level to determine eligibility for public programs like Medicaid and SNAP—are informed by the Census Bureau’s official poverty measure (OPM), a reductionist measure of poverty. The OPM relies solely on a multiple of the current cost of the minimum food diet from 1963 to calculate the poverty line and identify the poor. The Census also publishes a more expansive measure of poverty known as the supplemental poverty measure (SPM), which accounts for the cost of a broader basket of items including food, clothing, shelter, utilities, internet and telephone, but this latter measure does not inform the poverty line used to determine eligibility for public programs.

As Figure B demonstrates, the share of workers in poverty is significantly higher when we rely on the SPM instead. By this measure, more than 10 million workers (7.0%) between the ages of 18 and 64 failed to earn enough to avoid economic deprivation in 2023, the latest year for which these statistics are available, whereas the OPM captured only 4.5% of all workers.

Figure B

The discrepancy between the federal minimum wage and the real experience of workers throughout the country has led 30 states and Washington, D.C., to increase their minimum wage above the federal level. In the 20 states still using the federal minimum, 11.8 million workers earn less than $17 per hour, more than 1 in 5 workers in those states. Those states are disproportionately located in the South. The stagnation of the federal minimum wage allows Southern policymakers to maintain low wages in their economies. Southern workers have lower earnings even when adjusting for cost-of-living differences between regions. In part due to wage-suppressing policies like a low-minimum wage, Southern workers experience greater poverty than those in other regions.

Increasing the minimum wage boosts earnings and reduces poverty

The federal minimum wage is a powerful tool in fighting poverty in the U.S. The best economic research has consistently shown that increasing the minimum wage lifts earnings for low-wage workers, with little to no impact on employment. Research shows that increasing the minimum wage decreases poverty by increasing the incomes of low-income families, even accounting for decreases in public benefits as families earn more from higher wages. In analysis of legislation introduced in 2021 to gradually increase the federal minimum wage to $15 an hour, EPI concluded that the policy would lift between 1.8 to 3.7 million individuals out of poverty, including up to 1.3 million children. 

Despite persistent opposition from the business lobby and obstruction from conservative policymakers, raising the minimum wage remains popular among the public, and some legislators keep raising the call for federal action on this issue. Recently, members of Congress led by Sen. Bernie Sanders (I-Vt.) and Rep. Bobby Scott (D-Va.) once again reintroduced the Raise the Wage Act, which would gradually increase the federal minimum wage to $17 an hour. This would raise wages for more than 22.2 million workers, 4.2 million of whom live in households below the poverty line.

By contrast, Republican policies will make it harder for workers to escape poverty

While the minimum wage has been left to wither, Republican budget proposals in 2025 will either erode other elements of the social safety net or make them much harder to access. Republicans seek to cut Medicaid and ratchet up work requirements on both Medicaid and SNAP.2 This will harm low-income workers and their families, as these social programs help improve the living standards of millions of workers who don’t earn enough to avoid economic hardship. In 2023 alone, social programs that rely on the poverty guidelines kept more than 7 million individuals out of poverty.3 

Republicans have framed cutting benefits and expanding work requirements as a way to encourage people to work. The justification for these proposals is that generous Medicaid and SNAP benefits should be pared back because they encourage recipients to depend on government assistance instead of working. This seems to overlook the fact that two-thirds of non-elderly Medicaid enrollees and more than 85% of working-age adults who receive SNAP do work.

This conservative philosophy is an old idea that is deeply wedded to racist stereotypes about Black families being users of welfare programs. However, evaluating these proposals on their economic merits shows that they will increase hardship for low-wage Americans without creating economic benefit. Medicaid cuts at the levels proposed by Republicans would reduce incomes of low-wage families significantly, including a 7.4% reduction in income for families in the bottom 20% of the income distribution. Medicaid is also a vital investment in low-income children, who grow up healthier and with better education and income outcomes because of the Medicaid support they receive. Research suggests that Medicaid pays for itself through this investment in poor children. Cutting Medicaid will likely reduce these children’s educational achievement and wages earned over their lifetimes.

Similarly, research shows that adding work requirements to benefit programs is a punitive choice with no upside. Studies of work requirements on Medicaid and SNAP find little to no increase in employment outcomes in places where the policies have been implemented. What these policies do achieve is to make it harder for individuals to access the benefits they are eligible for.

A reason why work requirements are ineffective is that they do not account for the precarious nature of low-wage work. Unpredictable scheduling practices are pervasive in low-wage jobs, including cancelled shifts and short notice changes to shift schedules. Low-wage workers also frequently change jobs in an effort to find better-paying work. The scheduling unpredictability and level of turnover in many low-wage jobs can make it difficult for workers to fulfill the consistent work-hour requirements needed to satisfy work requirement policies. Work requirements effectively act as cuts to existing beneficiaries and limit new participants who have little control over the labor market conditions associated with low-wage work.

Conclusion

The minimum wage is a powerful tool for increasing the economic security of low-wage workers. Yet Republican lawmakers have repeatedly denied increases in the federal minimum wage and are now pursuing a tax and budget plan that would cut Medicaid and limit access to safety net programs to finance tax cuts for the richest Americans. If it goes into effect, the combination of tax cuts and Medicaid cuts would effectively lower incomes for workers in the bottom 40% of the income distribution while boosting incomes for the top 1%. These cuts are also likely to harm people and children of color, who are disproportionately more likely to rely on Medicaid. 

If lawmakers were serious about lifting families out of poverty and enabling them to fully participate in the labor force, they would be enacting policies to raise wages and expand access to good-paying jobs. By keeping wages low and making it more challenging to access benefits, lawmakers are seeking to deprive low-income households of the resources they need to thrive.

1. S. Rep. No. 884 (75th Cong., 1st Sess.), p. 4

2. Supplemental Nutrition Assistance Program (SNAP, formerly known as the food stamp program) is a crucial safety net program providing benefits so that low-income people in the United States can purchase food. SNAP has work requirements for most beneficiaries ages 16–59 who are able to work. In addition, there are more stringent work requirements for able-bodied adults without dependents (ABAWDs).

3. These individuals lived in households that qualified for SNAP benefits, housing subsidies, free or reduced-priced school meals, or cash assistance from the Temporary Assistance for Needy Families (TANF) program.

The Trump administration occasionally makes vague promises that it will maintain current federal resources flowing to public schools, but this is far from assuring. Today’s federal education aid is extremely well-targeted toward high-need districts, and even if the level of federal aid to states is maintained, it’s not clear that it would remain as well-targeted.  

Currently, a large share of ED funding goes to high-poverty districts through Title I funds and to special education programs through IDEA programs. These resources are crucial in offsetting the differences in local funding between low- and high-income districts, which rely heavily on property taxes. Over the last few years, COVID relief packages bolstered federal funding to public schools, with the Elementary and Secondary Schools Emergency Relief fund helping districts recover from learning losses that occurred during the pandemic. In 2022, districts received 14.0% of their total revenue, on average, from federal sources.   

To get a sense of how this federal money is distributed, we used data from the National Center for Education Statistics to calculate district-level estimates of federal revenue shares, the amount of Title I and IDEA funds each district receives, and the federal funding equivalent in the number of full-time teachers and staff. The results of this analysis can be seen in Figure A. Federal funding is crucial for schools across the country—the median amount a school district receives is $2.69 million. Federal funds make up less than 20% of a district’s budget in most cases (82%), but some districts rely on the federal government to contribute a much larger share of their funding—as much as 71.4% at the highest end.

Figure A also shows that because federal funds are meant to make up for state and local funding shortfalls, they are unevenly distributed across the country. Of the 25% of districts that receive the highest shares of revenue from the federal government, 54.6% are in the South. Removing this financial support would do disproportionate harm to children who live in a region that already severely underfunds public services. Additionally, states like Arizona and South Dakota would see massive cuts to their public schools, especially those that primarily serve Indigenous students. Nine of the 10 districts nationally with the highest revenue shares of federal funding are on or near reservations. These cuts would exacerbate racial inequity across the country.

Key to ED’s efficacy is that the revenue is redistributive: 51% goes to the third of schools with the highest neighborhood poverty while 18% goes to the third of districts with the lowest neighborhood poverty. Figure B shows a scatterplot of the share of federal revenue going to a district and the number of children with family income below the poverty line. The scatterplot is basically a straight line: As neighborhood poverty in a district increases, so too does the share of federal funding going to support that district. This basic need and special education funding serves children with high learning needs, ensures that there are enough support staff, and—coupled with child nutrition funding—helps students get proper nutrition in addition to receiving a quality education. Given the strong relationship between neighborhood poverty and federal funding, it’s hard to imagine a different program being more effective at reducing inequalities in education than the Department of Education’s spending priorities in K–12.

Given the unprecedented nature of these administrative actions, many organizations have responded with useful fact sheets and data tools showing how dismantling the Department of Education would affect their states (see here, here, here, and here). These data tools all tell a consistent story regarding the significance of federal aid, but they tend to differ in some details. For example, our district-level estimates include all federal funding that supports education, including grants beyond the Department of Education, such as grants from the United States Department of Agriculture (USDA) that support child nutrition. We break down these overall estimates into separate categories for Title I funding and IDEA funding, which directly come from ED, so that users can see the role each program plays in overall funding. This choice means that our total federal funding estimates are larger than other estimates that strictly use ED grants from the FY2023–FY2025 president’s budget. Further, our district-level estimates, which are from FY 2021–2022, exclude charter schools and very small districts (districts with fewer than 100 students), whereas some other fact sheets and data tools don’t make this exclusion.  

Finally, we use data from the National Center of Education Statistics, which are retrospective and rely on actual spending data reported to the Census Bureau. Other data sources on district school funding include the federal Department of Education’s budget service or state-level education departments. Often, these other sources will include more timely data but are based on grants that are allocated rather than already spent. While there are differences between what these various sources report about federal aid to districts for education, the differences tend to be quite small. 

Overall, the Trump administration’s policy choices could have devastating consequences on children’s well-being and educational success. Further, these choices are in line with a broader Republican attack on public education, which often begin with criticisms about curriculum decisions (complaints about excess focus on diversity, equity, and inclusion measures and left-wing “indoctrination” are all too common.) But behind these culture war complaints lies a quieter, yet devastating, attack on the basic level of resources available to public schools to educate children. The larger Republican goal—pursued at both federal and state levels—seems clear: starve funding to K–12 schools.

Children of color endure a disproportionate share of the burden of poverty in the United States. In 2023, Black, Hispanic, and American Indian and Alaska Native (AIAN) children remained about three times as likely as their non-Hispanic white peers to fall below the poverty line (see Figure A below). Similarly, Asian children were about twice as likely to suffer material shortcomings relative to their white peers.

Figure A

The results of the policy response to the pandemic proved that we purposely choose to tolerate a disproportionately high level of poverty for children of color in the United States. Between 2019 and 2021, the poverty rate of all these children declined by about half. This decline was largely attributed to the expanded Child Tax Credit (CTC), which helped lift out of poverty more than 700,000 Black children and more than 1 million Hispanic children. But after lawmakers failed to extend the expansion of the CTC, nearly all the gains in poverty reduction disappeared the next year.

Inequities remained unjustifiably high even when the poverty rate for children of color declined to its lowest point in 2021, reflecting the embeddedness of structural racism in the U.S. economy. Black and Hispanic children remained three times as likely as their white peers in 2021 to suffer the debilitating effects of poverty at a young age (see Figure A above). This racial gap is partly explained by the inadequacies of the expanded CTC to reach all families in need. But structural racism and the myth of race-neutral policies lie behind the broader persistence of the poverty gap.  

The material shortcomings endured by children reflect the economic situation of their parents and family. Black households are more likely to experience joblessness and low earnings than their non-Hispanic white peers. In 2023, the typical Black and Hispanic household earned just 63 cents and 74 cents, respectively, for every dollar earned by the median non-Hispanic white household. These persistent disadvantages leave families of color much more vulnerable to poverty. At the same time, the eroding U.S. social safety net leaves children from economically vulnerable families much more defenseless in the face of economic shocks.

Realizing Dr. King’s dream will require a recognition that the brunt of economic disparities falls largely on children of color, and Black children in particular. The early deprivation that poor Black children are left to endure is likely to compound once they enter a labor market that shapes outcomes by race and economic status. Breaking this cycle of economic vulnerability will require some form of child allowance, akin to the enhanced CTC, that doesn’t exclude families who stand to gain the most due to their material shortcomings.

The ability of unconditional cash transfers to relieve families from economic hardship and food insufficiency in 2021 proved once and for all that we don’t need to run social experiments to know that all families in need are deserving of relief. Similarly, our sustained commitment to full employment and fighting for stronger workers’ rights and unions should form part of a broad basket of policy solutions that enhance economic equity. Republicans in Congress are currently considering plans to do the exact opposite. House Republicans are proposing to slash spending on social safety net programs like the Supplemental Nutrition Assistance Program (SNAP)—or food stamps—to essentially make hungry families pay for federal tax cuts for wealthy households. Food stamps alone kept more than 1.3 million children out of poverty last year. Continuing to gut the social safety net in the face of persistently high poverty fails all children and robs our economy of their future contributions.

Real (inflation-adjusted) median household income increased by 4.0% to $80,610, the first increase since the pandemic. Between 2022 and 2023, the labor market added 3.5 million jobs while real wages increased. Considering most households rely on income from work to make ends meet, it’s no surprise that median household income increased in 2023.

Today’s data highlight the extraordinary strength of the recovery from the economic crises caused by the pandemic, a recovery driven by policy choices—particularly large fiscal relief and recovery packages—that aimed to quickly heal the labor market. The rapid growth of household incomes charted in today’s data is powerful evidence that the policy approach of recent years was the right choice.

Officially, median household income for 2023 is statistically indistinguishable from the last income peak of 2019. While that is the case in the official data, it is important to note that there were significant data collection issues in the survey for 2019 as responses were collected just as the pandemic hit in early 2020. The pandemic disruptions introduced significant “nonresponse bias”—meaning it was harder to talk to households to collect the data, and the households who were harder to reach were disproportionately lower income. This nonresponse bias boosted income measures in 2019 artificially. Census Bureau researchers subsequently estimated that this bias meant that real median income was 2.8% lower in 2019 than reported in the initial release. If we applied this data correction to income levels in 2019, this would mean that real household incomes in 2023 rose above 2019 levels and are now at their highest level on record.

Other welcome news include that income for lower-income households rose faster than for those at the median or at the top. Income for the 10^th-percentile household increased 6.7% between 2022 and 2023. Income for high-income households—at the 90th percentile—rose 4.6%. This significant increase for lower-income households led to a drop in the official poverty rate of 0.4 percentage points to 11.1% in 2023.

In 2022, the poverty rate increased and incomes fell as high inflation and the loss of pandemic-era safety net programs overshadowed labor market improvements. Even though those safety net programs have not returned, the Census data will likely show that a continued strong labor market coupled with falling inflation meant that livings standards increased among U.S. households in 2023.

In this blog post, we find:

1. The labor market continued to pull workers off the sidelines as job growth was strong across demographic groups, particularly for those often left behind by economic growth.
2. After spiking in 2022, inflation dropped sharply in 2023, far faster than the milder deceleration in nominal hourly and weekly wages. Real—inflation-adjusted—wages rose between 2022 and 2023, particularly among lower-wage workers, women, and Black workers.

The labor market recovery strengthened in 2023

The labor market experienced a tremendous bounceback from the depths of the pandemic recession. Large-scale policy interventions early in the recovery, such as expanded unemployment benefits and economic impact payments, helped families stay afloat and drove a recovery several times faster than the drawn-out recovery from the Great Recession. This strong fiscal boost is why it took just two years to regain the pre-pandemic prime-age employment-to-population ratio (EPOP)—the share of the population 25–54 years old with a job—compared with about 10 years to reach the same point following the Great Recession.

Figure A illustrates that the labor market continued to expand for workers in 2023. Even as the low unemployment rate held steady at 3.6%, the share of the population with a job grew, including for young adults (18–24 years old) and prime-age adults. 

Among prime-age workers, Black and women workers had the largest gains. In particular, Black men’s EPOP rose 1.7 percentage points and Hispanic women’s EPOP rose 1.5 percentage points between 2022 and 2023. Black and white women also experienced solid gains.

In fact, Black workers and women overall—including Black, Hispanic, and white women—experienced historically high employment rates in 2023. While disparities remain, this means that the stakes for a robust labor market recovery are even higher for historically marginalized groups. 

Figure A

Inflation fell sharply in 2023—paving the way for real wage increases

Even though job growth was strong and unemployment fell sharply in 2022 from the year before, the inflationary spike of that year swamped much of those gains. Between 2022 and 2023, however, inflation fell nearly in half, from 7.7% to 3.9%. Figure B shows this sharp decline in inflation juxtaposed against the much slower deceleration in average hourly wages and weekly earnings. As a result, nominal wages exceeded price growth in 2023, causing real hourly wages to rise.

Average nominal weekly earnings—perhaps a better signal for the annual income data out next week—also increased faster than inflation between 2022 and 2023.

Figure B

Real wages rose in 2023

Figure C illustrates real wage changes between 2022 and 2023 for select wage levels, educational attainment, and demographic characteristics. As with the last four years in general, lower-wage workers have experienced faster wage growth.

Very low-wage workers (10th percentile) and low-wage workers (20th percentile) saw strong wage growth of 4.4% and 2.6%, respectively. Workers with lower levels of formal educational attainment also experienced relatively faster wage growth. Taken together with expanding employment, these trends are a promising sign that poverty may have fallen in 2023. Unfortunately, the pandemic safety net measures so critical coming out of the recession have long since expired, dashing any hopes of returning to the historically low poverty rates of 2021 (as measured by the supplemental poverty measure which includes those additional income sources).

While slower than the tremendous growth for lower-wage workers, middle-wage workers—the average of the 40th to 60th percentiles—saw their hourly pay rise by 0.9%. As with employment opportunities, the strongest middle-wage growth was among Black workers and women workers, each increasing 1.1% over the year.

Figure C

Overall, I’m optimistic that a growing labor market, falling inflation, and rising wages will lead to a solid Census report on earnings, incomes, and poverty. Hopefully the stronger growth among historically disadvantaged groups will mean some shrinking of persistent large disparities.