Jump to statistics on:

• Earnings
• Incomes
• Poverty
• Policy / SPM

This fact sheet provides key numbers from today’s new Census reports, Income and Poverty in the United States: 2020 and The Supplemental Poverty Measure: 2020. Each section has headline statistics from the reports for 2020, as well as comparisons with the previous year. This fact sheet also provides historical context for the 2020 recession by analyzing changes between the last business cycle peak in 2019 to 2007 (the final year of the economic expansion that preceded the Great Recession), and to 2000 (the prior economic peak). All dollar values are adjusted for inflation (2020 dollars). Because of a redesign in the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) income questions in 2013, we imputed the historical series using the ratio of the old and new method in 2013. All percentage changes from before 2013 are based on this imputed series. We do not adjust for the break in the series in 2017 due to differences in the legacy CPS ASEC processing system and the updated CPS ASEC processing system, but these differences are small and statistically insignificant in most cases.

Earnings

Median annual earnings for men working full time grew 5.6%, to $61,417, in 2020. Prior to the 2020 recession, men’s earnings rose 3.0% between 2007 and 2019, and were 3.6% higher in 2019 than they were in 2000.

Median annual earnings for women working full time grew 6.5%, to $50,982, in 2020. Prior to the 2020 recession, women’s earnings rose 9.0% between 2007 and 2019, and were 15.7% higher in 2019 than they were in 2000.

Incomes

Median household income fell 2.9%, to $67,521 in 2020. Prior to the 2020 recession, median household income rose 7.3% between 2007 and 2019, and was 6.5% higher in 2019 than it was in 2000.

Median non-elderly household income fell 2.6%, to $76,800, in 2020. Prior to the 2020 recession, median non-elderly household income rose 8.1% between 2007 and 2019, and was 4.3% higher in 2019 than it was in 2000.

Median household income for white, non-Hispanic households fell 2.7%, to $74,912, in 2020. Prior to the 2020 recession, median household income rose 8.2% between 2007 and 2019, and was 8.2% higher in 2019 than it was in 2000.

Median household income for Black households fell 0.1%, to $46,600, in 2020. Prior to the 2020 recession, median household income rose 6.3% between 2007 and 2019, and was 1.4% higher in 2019 than it was in 2000.

Median household income for Hispanic households fell 2.6%, to $55,321, in 2020. Prior to the 2020 recession, median household income rose 21.1% between 2007 and 2019, and was 17.3% higher in 2019 than it was in 2000.

Poverty

The poverty rate rose 0.9 percentage points, to 11.4%, in 2020. Prior to the 2020 recession, the poverty rate fell 2.0 percentage points between 2007 and 2019 and was 0.8 percentage points lower in 2019 than it was in 2000.

The child poverty rate rose 1.7 percentage points, to 16.1%, in 2020. Prior to the 2020 recession, the child poverty rate was 3.6 percentage points lower in 2019 than it was in 2007 and was 1.8 percentage points lower in 2019 than it was in 2000.

The white, non-Hispanic poverty rate rose 0.9 percentage points, to 8.2%, in 2020. Prior to the 2020 recession, the white, non-Hispanic poverty rate fell 0.9 percentage points between 2007 and 2019, and was 0.1 percentage points lower in 2019 than it was in 2000.

The Black poverty rate rose 0.6 percentage points, to 19.3%, in 2020. Prior to the 2020 recession, the Black poverty rate fell 5.7 percentage points between 2007 and 2019, and was 3.8 percentage points lower in 2019 than it was in 2000.

The Hispanic poverty rate rose/fell 1.3 percentage points, to 17.0%, in 2020. Prior to the 2020 recession, the Hispanic poverty rate fell 5.8 percentage points between 2007 and 2019, and was 5.8 percentage points lower in 2019 than it was in 2000.

Policy matters

The Supplemental Poverty Measure (SPM) is an alternative poverty measure published by the Census Bureau since 2010 that is more sophisticated than the official poverty measure referenced earlier in this fact sheet. The SPM takes into account an array of typical expenses—such as housing, food, clothing, health care, and more—as well as people’s income from both market sources and government programs. Using the Supplemental Poverty Measure, we can evaluate how government assistance lifts people out of poverty. 

SPM poverty rate in 2020: 9.1%

Public safety net and social insurance programs kept tens of millions of people out of poverty in 2020. The Census SPM data show that:

• Social Security kept 26.5 million people out of poverty in 2020.
• Economic Impact/stimulus kept 11.7 million people out of poverty in 2020.
• Unemployment insurance kept 5.5 million people out of poverty in 2020.
• Refundable tax credits (such as the Earned Income Tax Credit) kept 5.3 million people out of poverty in 2020.
• The Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) and school lunch assistance kept 3.2 million people out of poverty in 2020.

Jump to statistics on:

• Earnings
• Incomes
• Poverty
• Policy / SPM

This fact sheet provides key numbers from today’s new Census reports, Income and Poverty in the United States: 2019 and The Supplemental Poverty Measure: 2019. Each section has headline statistics from the reports for 2019, as well as comparisons with the previous year, with 2007 (the final year of the economic expansion that preceded the Great Recession), and with 2000 (the historical high point for many of the statistics in these reports). All dollar values are adjusted for inflation (2019 dollars). Because of a redesign in the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) income questions in 2013, we imputed the historical series using the ratio of the old and new method in 2013. All percentage changes from before 2013 are based on this imputed series. We do not adjust for the break in the series in 2017 due to differences in the legacy CPS ASEC processing system and the updated CPS ASEC processing system, but these differences are small and statistically insignificant in most cases. Also, there are significant concerns about data quality, given the fall in survey response rates. It appears that nonresponse biased income estimates up and poverty statistics down so the actual reported improvement should be taken with a grain of salt.

Earnings

Median annual earnings for men working full time grew 2.1%, to $57,456, in 2019. Men’s earnings are up 3.0% since 2007, and are 3.6% higher than they were in 2000.

Median annual earnings for women working full time grew 3.0%, to $47,299, in 2019. Women’s earnings are up 9.0% since 2007, and are 15.7% higher than they were in 2000.

Incomes

Median household income rose 6.8%, to $68,703, in 2019. Median household income is up 7.3% since 2007, and is 6.5% higher than it was in 2000.

Median nonelderly household income rose 6.7%, to $77,873, in 2019. Median nonelderly household income is up 8.1% since 2007, and is 4.3% higher than it was in 2000.

Median household income for white, non-Hispanic households rose 5.7%, to $76,057, in 2019. Median household income is up 8.2% since 2007, and is 8.2% higher than it was in 2000.

Median household income for African American households rose 8.5%, to $46,073, in 2019. Median household income is up 6.3% since 2007 and is 1.4% higher than it was in 2000.

Median household income for Hispanic households rose 7.1%, to $56,113, in 2019. Median household income is up 21.1% since 2007 and is 17.3% higher than it was in 2000.

Poverty

The poverty rate fell 1.3 percentage points, to 10.5%, in 2019. The poverty rate is 2.0 percentage points lower than in 2007. The poverty rate is 0.8 percentage points lower than it was in 2000.

The child poverty rate fell 1.8 percentage points, to 14.4%, in 2019. The child poverty rate was also 3.6 percentage points lower in 2019 than it was in 2007 and is 1.8 percentage points below to its 2000 level.

The white, non-Hispanic poverty rate fell 0.8 percentage points, to 7.3%, in 2019. The white, non-Hispanic poverty rate is 0.9 percentage points lower than in 2007 and is 0.1 percentage points lower than it was in 2000.

The African American poverty rate fell 2.0 percentage points, to 18.7%, in 2019. The African American poverty rate is 5.7 percentage points lower than in 2007 and is now 3.8 percentage points lower than it was in 2000.

The Hispanic poverty rate fell 1.9 percentage points, to 15.7%, in 2019. The Hispanic poverty rate is 5.8 percentage points lower than in 2007 and is 5.8 percentage points lower than it was in 2000.

Policy matters

The Supplemental Poverty Measure (SPM) is an alternative poverty measure published by the Census Bureau since 2010 that is more sophisticated than the official poverty measure referenced earlier in this fact sheet. The SPM takes into account an array of typical expenses—such as housing, food, clothing, health care, and more—as well as people’s income from both market sources and government programs. Using the Supplemental Poverty Measure, we can evaluate how government assistance lifts people out of poverty.

SPM poverty rate in 2019: 11.7%

Impact of government assistance on poverty as measured by the SPM:

• Social Security kept 26.5 million people out of poverty in 2019.
• Refundable tax credits (such as the Earned Income Tax Credit) kept 7.5 million people out of poverty in 2019.
• The Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) kept 2.5 million people out of poverty in 2019.
• Unemployment insurance kept 472,000 people out of poverty in 2019.

Jump to statistics on:

• Earnings
• Incomes
• Poverty
• Policy / SPM

This fact sheet provides key numbers from today’s new Census reports, Income and Poverty in the United States: 2018 and The Supplemental Poverty Measure: 2018. Each section has headline statistics from the reports for 2018, as well as comparisons to the previous year, to 2007 (the final year of the economic expansion that preceded the Great Recession), and to 2000 (the historical high point for many of the statistics in these reports). All dollar values are adjusted for inflation (2018 dollars). Because of a redesign in the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) income questions in 2013, we imputed the historical series using the ratio of the old and new method in 2013. All percentage changes from before 2013 are based on this imputed series. We do not adjust for the break in the series in 2017 due to differences in the legacy CPS ASEC processing system and the updated CPS ASEC processing system, but these differences are small and statistically insignificant in most cases.

Earnings

Median annual earnings for men working full time grew 3.4 percent, to $55,291, in 2018. Men’s earnings are up 1.0 percent since 2007, and are 1.5 percent higher than they were in 2000.

Median annual earnings for women working full time grew 3.3 percent, to $45,097, in 2018. Women’s earnings are up 5.8 percent since 2007, and are 12.3 percent higher than they were in 2000.

Incomes

Median household income rose 0.9 percent, to $63,179, in 2018. Median household income is up 0.4 percent since 2007, and is 0.3 percent lower than it was in 2000.

Median nonelderly household income rose 1.0 percent, to $71,659, in 2018. Median nonelderly household income is up 1.2 percent since 2007, but is still 2.3 percent lower than it was in 2000.

Median household income for white, non-Hispanic households rose 1.1 percent, to $70,642, in 2018. Median household income is up 2.3 percent since 2007, and is 2.3 percent higher than it was in 2000.

Median household income for African American households rose 1.8 percent, to $41,692, in 2018. Median household income is down 2.1 percent since 2007, and is 5.9 percent lower than it was in 2000.

Median household income for Hispanic households rose 0.1 percent, to $51,450, in 2018. Median household income is up 13.1 percent since 2007, and is 9.5 percent higher than it was in 2000.

Poverty

The poverty rate fell 0.5 percentage points, to 11.8 percent, in 2018. The poverty rate is 0.7 percentage points lower than in 2007. The poverty rate is 0.5 percentage points higher than it was in 2000.

The child poverty rate fell 1.2 percentage points, to 16.2 percent, in 2018. The child poverty rate was also 1.8 percentage points lower in 2018 than it was in 2007, and is back to its 2000 level.

The white, non-Hispanic poverty rate fell 0.4 percentage points, to 8.1 percent, in 2018. The white, non-Hispanic poverty rate is 0.1 percentage points lower than in 2007, and is 0.7 percentage points higher than it was in 2000.

The African American poverty rate fell 1.0 percentage point, to 20.7 percent, in 2018. The African American poverty rate is 3.7 percentage points lower than in 2007, and is now 1.8 percentage points lower than it was in 2000.

The Hispanic poverty rate fell 0.7 percentage points, to 17.6 percent, in 2018. The Hispanic poverty rate is 3.9 percentage points lower than in 2007, and is 3.9 percentage points lower than it was in 2000.

Policy matters

The Supplemental Poverty Measure (SPM) is an alternative poverty measure published by the Census Bureau since 2010 that is more sophisticated than the official poverty measure referenced earlier in this fact sheet. The SPM takes into account an array of typical expenses—such as housing, food, clothing, health care, and more—as well as people’s income from both market sources and government programs. Using the Supplemental Poverty Measure, we can evaluate how government assistance lifts people out of poverty.

SPM poverty rate in 2018: 13.1%

Impact of government assistance on poverty as measured by the SPM:

• Social Security kept 27.3 million people out of poverty in 2018.
• Refundable tax credits (such as the Earned Income Tax Credit) kept 7.9 million people out of poverty in 2018.
• The Supplemental Nutrition Assistance Program (SNAP, also known as food stamps) kept 3.1 million people out of poverty in 2018.
• Unemployment insurance kept 415,000 people out of poverty in 2018.

Between 2016 and 2017, the real median household income for Native Americans increased 3.2 percent, to $41,882. Native American median household income grew faster in 2017 than 2016 (1.8 percent), essentially bringing it back to the 2007 pre-recession level (though technically still $5 lower). Even with this boost, the median household income of Native Americans was just 69.4 percent of the national median in 2017. While this data comes from a different source than Wednesday’s data on household income and covers a slightly different survey period, it suggests that Native American median household income is similar to that of black households, but Native American households experienced much faster income growth than blacks over the last year.

Native Americans

Poverty among all Native Americans declined between 2016 and 2017 (from 26.2 to 25.4 percent) and 32.7 percent of Native American children lived in poverty in 2017—down 1.1 percentage points from 2016. Both rates exceed those reported for blacks in the Current Population Survey. The rate of poverty among Native Americans was nearly double the national average for all people and 1.8 times higher for children.

Native Americans

Native Americans

According to Wednesday’s Census report, Asian Americans and African Americans were the only groups who have yet to recover the income lost during the Great Recession. Asian American real median household income declined 2.2 percent between 2016 and 2017, but the difference was statistically insignificant. The 2017 ACS data shows the variance in income across the different Asian ethnic populations, as well as their disparate rates of recovery. In 2017, median household income among Asian ethnic groups ranged from $114,261 for Indians to $39,730 for the Burmese. Ten years since the start of the Great Recession in 2007, Bangladeshi and Indian households have experienced the most income growth (16.3 percent and 15 percent, respectively) among those with reported income in 2007. While Chinese and Filipino households remain just short of their 2007 income levels, real median incomes of Laotian households are 6.3 percent lower and Thai median household income is 5.8 percent lower.

Asians

The wide range of incomes and income growth across Asian ethnic groups are also generally reflected in differences in poverty rates. Three groups—Indians (7.0 percent), Filipinos (6.0 percent) and Japanese (7.5 percent)—had poverty rates below 8 percent, while nearly one-third of the Burmese (31.0 percent) and approximately one-fifth of the Bangladeshi (20.4 percent) and Nepalese (21.1 percent) populations lived in poverty.

Together with the 2017 income, poverty and health insurance coverage report, the 2017 ACS data provide a more complete picture of the economic status of America’s various racial and ethnic groups.  This information helps to address the sense of “invisibility” felt by many of these groups, provides critical information for the states and local communities where these populations are concentrated and expands the scope for evaluating the impact of national policies.

The national poverty rate, as measured by the ACS, fell 0.6 percentage points to 13.4 percent. This is 0.4 percentage points above the ACS poverty rate for the country in 2007, and 1.2 percentage points above the rate from 2000.

Between 2016 and 2017, the District of Columbia saw the largest decline in its poverty rate (-2.0 percentage points), followed by Idaho (-1.6 percentage points), Arizona (-1.5 percentage points), Maine (-1.4 percentage points), Kentucky (-1.3 percentage points), and Rhode Island (-1.2 percentage points). There were increases in poverty in Delaware (1.9 percentage points), West Virginia (1.2 percentage points), Alaska (1.2 percentage points), New Hampshire (0.4 percentage point), Hawaii (0.2 percentage point), South Carolina (0.1 percentage point), and Massachusetts (0.1 percentage point). In Wyoming, the rate remained essentially unchanged between 2016 and 2017.

Income growth at the national level and an increase in the number of jobs pulling workers off the sidelines accounted for a drop in the poverty rate in many states. While the federal minimum wage sits at $7.25, many states and localities have increased their minimum wages, which helps lift workers out of poverty. At the same time, government programs including Social Security, refundable tax credits, and Supplemental Nutrition Assistance Program (SNAP) are directly responsible for keeping tens of millions out of poverty across the country. A significant drop in the poverty rate for the second year in a row is a positive sign, but lawmakers should be careful to protect these recent gains with policies that raise wages for working families.

Poverty

From 2016 to 2017, the largest percentage gains in household income occurred in the District of Columbia, where the typical household experienced an increase of $5,258 in their annual income—an increase of 6.8 percent. With this increase, the District of Columbia now has the highest median household income in the country at $82,372—though comparing D.C. to states is problematic, since D.C. is a city, not a state. Maryland remains the state with the highest median household income at $80,776—a value essentially unchanged (0.2 percent growth) from 2016 to 2017. Households in 13 states experienced growth faster than the U.S. average of 2.5 percent: Montana (4.5 percent), Maine (3.8 percent), California (3.8 percent), Washington (3.6 percent), Tennessee (3.5 percent), Arizona (3.4 percent), Rhode Island (3.2 percent), Nebraska (3.1 percent), Colorado (3.0 percent) New Jersey (3.0 percent), Nevada (2.9 percent), Virginia (2.8 percent), and Georgia (2.7 percent).

From 2016 to 2017, there were 10 states in which the median household income declined, though only 1 of these—Alaska, at 6.3 percent—had a statistically significant drop. Alaska was one of eight states plus the District of Columbia where median household income moved in a different direction in 2017 than it did in 2016. In D.C., Louisiana, Montana, and New Hampshire, incomes started rising in 2017, having declined in 2016. In Alaska, Connecticut, Idaho, New Mexico, and West Virginia, household incomes fell in 2017, having grown in 2016.

Income

The 2.5 percent increase in median household incomes reported in the ACS is a larger increase than what the Census Bureau reported on Wednesday in their annual release of data from the Current Population Survey (CPS). This is not unusual, and does not change the story told by the CPS data that household income growth for middle-income households is slowing. The ACS and CPS have different samples and cover slightly different timeframes, which can explain the larger growth rate seen in the ACS. The CPS surveys all of its respondents in March of each year, and asks them to describe their income in the preceding calendar year. The ACS is a rolling 12-month survey—i.e., households are surveyed on an ongoing basis throughout the year and when surveyed, respondents are asked to report their income over the preceding 12 months. Thus, a significant portion of 2017 ACS respondents (those surveyed in the first half of 2017) were describing income mostly from 2016. Similarly, the 2016 ACS partially describes income in 2015. Therefore, the change in ACS incomes from 2016 to 2017 is describing changes occurring over a somewhat broader period that includes portions of 2015. Because household income growth nationally has slowed from 2015 to 2017, including changes from earlier in this period is likely leading to the ACS showing a larger increase than the calendar-year changes reported in the CPS.

Since 2010, the U.S. Census Bureau has also released an alternative to the official poverty measure known as the Supplemental Poverty Measure (SPM).1

The SPM corrects many potential deficiencies in the official rate. For one, it constructs a more realistic threshold for incomes families need to live free of poverty, and adjusts that threshold for regional price differences. For another, it accounts for the resources available to poor families that are not included in the official rate, such as food stamps and other in-kind government benefits.

As shown in Figure A, a larger proportion of Americans are in poverty as measured by the SPM than the official measure reports. (Importantly, however, researchers who constructed a longer historical version of the SPM found that it shows greater long-term progress in reducing poverty than the official measure.) In 2017, the SPM declined by 0.1 percentage points to 13.9 percent. Under the SPM, 45.0 million Americans were in poverty last year, compared with 39.7 million Americans under the “official” poverty measure.

Figure A

The SPM data also show a lower rate of child poverty than the official statistics, primarily as a result of the SPM’s inclusion of noncash income from government assistance programs. In 2017, the official child poverty rate was 17.5 percent—a decline of 0.5 percentage points as compared to both 2016 and 2007, prior to the Great Recession. Nevertheless, the official child poverty rate remains 1.3 percentage points higher than it was in 2000. Using the SPM, the child poverty rate rose 0.4 percentage points to 15.6 percent, which is not significantly different than the 15.2 percent child poverty rate in 2016.

Because it incorporates noncash sources of income into its calculations, the SPM allows us to see the enormous impact that the full spectrum of government anti-poverty programs have in reducing hardship for millions of Americans. As shown in Figure B, government assistance programs are directly responsible for keeping tens of millions of people out of poverty. Social Security is, by far, the most powerful anti-poverty program in the United States. In 2017, it was responsible for keeping 27.0 million people, or 8.4 percent of Americans, above the SPM poverty threshold. Refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit, kept 8.3 million, or 2.6 percent of Americans above the SPM poverty threshold. Smaller (but still vital) programs, such as the Supplemental Nutrition Assistance Program or SNAP (commonly known as “food stamps”) and Supplemental Security Income each prevented over 3 million people from falling into poverty.

Figure B

Government assistance programs were particularly important in keeping children out of poverty. As shown in Figure B, of the 8.3 million Americans that refundable tax credits lifted out of poverty, 4.5 million were children. Similarly, of the 3.4 million Americans that SNAP kept out of poverty, 1.5 million were children. Housing subsidies shielded almost 900,000 children from poverty. Even Social Security—too-often thought of as strictly a program for older Americans—has a large impact on the welfare of children, lifting 1.4 million kids above the poverty line.

With recent budget proposals calling for cuts to these programs, lawmakers need to recognize how critical these programs are for helping families stay afloat. The lowest-income households in America (the lowest two deciles the income distribution) suffered the largest average percentage losses of any income group in the Great Recession, and they are the only income group whose average household income remains significantly lower than in 2000 (when the economy was closer to full employment). Under such circumstances, there can be little justification for weakening the programs upon which many of these households rely.

1. In 2016, the Census Bureau made minor changes to the SPM’s methodology. At this time, they have only published historical SPM poverty rates under this new methodology back to 2013.

Figure A

Based on EPI’s imputed historical income values (see the note under Figure A for an explanation), 10 years after the start of the Great Recession in 2007, only African American and Asian households have not recovered their pre-recession median income.  Compared to 2007, 2017, median household incomes are down 1.9 percent (-$781) for African Americans and 3.8 percent ($3,225) for Asians, but up 1.1 percent ($755) for non-Hispanic whites, and 13.7 percent ($6,073) for Hispanics. Asian households continue to have the highest median income, despite large income losses in the wake of the recession.

The primary driving force behind the slow return to pre-recession income levels has been stagnant wage growth. Real wages had been essentially flat since 2000 for the typical worker, until receiving a needed boost in 2015 and 2016, in part due to a sharp slowdown in inflation. Interestingly, while real earnings of the median male and female full-time full-year worker declined 1.1 percent each in 2017, there was less uniformity in earnings growth by race, ethnicity and gender. Between 2016 and 2017, real earnings of the median white and Hispanic male full-time, full-year worker increased 2.1 percent and 1.9 percent, respectively, while the median black male worker’s earnings fell 0.2 percent. Only black men have yet to fully recover their pre-recession 2007 level of earnings.

Figure B

Among female workers, the decline in median earnings was more consistent across racial and ethnic groups. Between 2016 and 2017, real earnings of the median African American woman working full-time full-year declined 0.7 percent, followed by a decline of 0.6 percent among Hispanic women and a decline of 0.5 percent among white women. Inflation-adjusted median earnings for full-time, full-year workers remain below 2007 levels for each of these groups of women.

Figure C

The 2017 poverty rates also reflect the patterns of income growth between 2016 and 2017. Poverty rates for all groups were down slightly or unchanged, but remain highest among African Americans (21.2 percent, down 0.8 percentage points), followed by Hispanics (18.3 percent, down 1.1 percentage points), Asians (10 percent, down 0.1 percentage points) and whites (8.7 percent, down 0.1 percentage point). Following patterns of slowed income growth, the pace of improvement in the poverty rate also slowed. African-American and Hispanic children continue to face the highest poverty rates—29 percent of African Americans and 25 percent of Hispanics under age 18 live below the poverty level. African American children are over 2.5 times more likely to be in poverty than white children (10.9 percent).

Figure D

The Supplemental Poverty Measure (SPM), an alternative to the long-running official poverty measure, provides an even more accurate measure of a household’s economic vulnerability. While the official poverty rate only captures before-tax cash income, the SPM accounts for various non-cash benefits and tax credits. The SPM also allows for geographic variability in what constitutes poverty based on differences in the cost of living. According to the 2017 SPM, the official poverty rate understates poverty among Hispanics (21.4 percent) and Asians (15.1 percent) by more than among whites (9.8 percent) and African Americans (22.1 percent).

While today’s report provides a snapshot of the current economic condition of America’s largest racial and ethnic groups, Thursday’s release of the 2017 American Community Survey will provide an update on the Native American population and disaggregated data for the various ethnic groups that make up the Asian population.

To a great extent, trends in annual earnings since 2000 resemble the overall wage stagnation we’ve seen since the mid-1970s. (Here, we discuss annual full time earnings, but the long-run trends are consistent with the hourly wage data. For an extensive discussion of hourly wage trends, see The State of American Wages 2017.) Between 2016 and 2017, full-time year-round men’s and women’s earnings fell 1.1 percent. Men’s median earnings are still 1.9 percent below their 2000 level, while women’s earnings are now 7.1 percent higher than in 2000. Because of these divergent trends, the overall gender wage gap narrowed between 2000 and 2017, though at a slower rate than in the previous two decades.

These patterns in men’s and women’s full-time median annual earnings can be further broken down by race. As you can see in the figure below, real median earnings of full-time workers—male and female, black and white—have been relatively flat since 2000. Unlike the previous year’s data where only white women saw a significant increase in median earnings, only white men saw their median wages rise between 2016 and 2017. For the most part, median wages were flat or falling in the full business cycle of 2000–2007, and black men have still not grown past their 2000 levels.

Figure A

Stagnant median wages are not desirable or inevitable. There has been substantial overall economic growth since 2000, and a growing economy has the potential to increase wages and improve living standards across the board. Unfortunately, as with the decades leading up to 2000, overall economic growth has not translated into rising wages for the vast majority of workers. The figure below illustrates the growth in real median earnings for black and white, male and female full-time workers between 2000 and 2017, and provides a useful benchmark: productivity growth over the same period. Productivity growth—the growth of output of goods and services produced in an average hour of work—is a good representation of how the expanding economy could translate into broad-based wage growth. As you can see, productivity grew nearly 23 percent over this period of wage stagnation. But even white women, who had the strongest median wage growth in this figure, saw their average wage grow less than half as fast as productivity.

Figure B

While the vast majority of workers missed out on the gains from growing productivity, those at the top reaped the rewards. You can see that pulling apart most distinctly in hourly wage data, which allows an examination of the top 1 percent. Between 1979 and 2016, wages for the top 1 percent of earners increased 149 percent, while wages for the bottom 90 percent only grew 21 percent. This rising inequality has a clear cost. We should consider it a public policy failure if working people’s wages don’t grow alongside the overall economy. Between 1947 and 1979, they did. They can again.

While wage growth for most people has been stagnant or slow at best, there are also stark disparities by race and gender. Readily apparent from the first figure in this post is how much higher median earnings are for white men than any other group. Black men and white women’s salaries were about even until a mild but persistent divergence in 2010 and another in 2016. Black women’s salaries are entirely and persistently below the other groups displayed, a disparity that only worsened this year as black women suffered the largest decline in median earnings. In the figure below, we explicitly examine these differences by showing median earnings for white women, black men, and black women as a share of white men’s median earnings. Of these three groups, only white women have seen any sustained progress since 2000 narrowing the gap with white men. And, on an annual basis in 2017, white women were still only paid 77 cents on the white male dollar.

Figure C

Black men’s median earnings started out in 2000 essentially where white women were vis-à-vis white men (73.0 percent versus 72.3 percent). While white women made some progress, the gap between white and black men’s earnings actually grew. In 2017, black men were paid only 69.7 cents on the white male dollar. Meanwhile, in 2000, black women were paid 60.8 cents on the white male dollar, and by 2017, that number remained entirely unchanged. This means that there has been no progress on closing racial pay gaps since 2000, and the narrowing of the gender pay gap has been largely to the benefit of white women, a finding that is consistent with previous research on hourly wage gaps.

These findings suggest that sustained and meaningful progress toward closing persistent disparities in pay by race and gender has been hindered by at least two barriers: failure to make significant and consistent progress in ending the pay gaps between white men and other workers, and failure of wages for the vast majority of workers of any race to even come close to keeping pace with productivity growth. Policymakers should attack both of these failures. At a minimum, full enforcement of anti-discrimination laws, aided by greater pay transparency, should be pursued to dent wage gaps by race and gender. And to close gaps between overall productivity and wages for the vast majority, elements of EPI’s First Day Fairness agenda  should be adopted.

Mending the broken link between productivity and pay for the vast majority will not only raise wages across-the-board, it will also bring an end to the zero-sum logic that has pitted working people against each other in recent decades. So long as everyone’s wages were stagnant, progress for any particular set of workers could only come at others’ expense. An economy that sees the entire bottom 90 percent rise smartly can both rapidly close gaps between workers while giving everybody a raise. By the end of 2017, the unemployment rate had fallen to 4.1 percent. At that level, employers should be finding it harder and harder to attract and retain the workers they want—and, therefore they should be raising wages in order to get them. But, that’s didn’t happen and hasn’t been happening enough to move the dial on wage growth. Workers, men and women, black and white, seem to need a tighter and tighter labor market to see stronger wage growth. But, it’s of crucial importance in terms of the boost to low- and moderate-wage workers and the narrowing of employment gaps.

While the gains in household income are markedly slower than in previous years, they nonetheless represent another small step toward reclaiming the lost decade of income growth caused by the Great Recession. Part of this year’s slowdown in income growth relative to 2016 is likely driven by a small increase in the pace of inflation. In 2017, year-over-year inflation was 2.2 percent compared to 1.3 percent in 2016. However, as discussed below, this year’s report reminds us that the vast majority of household incomes (when corrected for a break in the data series in 2013) have still not fully recovered from the deep losses suffered in the Great Recession.

Non-elderly household incomes improve

The Census data show that from 2016–2017, inflation-adjusted median household incomes for non-elderly households (those with a head of household younger than 65 years old) increased 2.5 percent, from $67,917 to $69,628. Median non-elderly household income is an important measure of an improving economy, as those households depend on labor market income for the vast majority of their income. This continued, albeit slower, increase after large gains in the prior two years is a welcome trend. Median household income for non-elderly households, which finally recovered to its pre-recession level in 2017, was 0.8 percent, or $530, above its level in 2007. It’s important to note that the Great Recession and its aftermath came on the heels of a weak labor market from 2000–2007, during which the median income of non-elderly households fell significantly, from $71,577 to $69,098—the first time in the post-war period that incomes failed to grow over a business cycle. Altogether, from 2000–2017, the median income for non-elderly households fell from $71,577 to $69,628, a decline of $1,949, or 2.7 percent. In short, the last three years should not make us forget that incomes for the majority of Americans have experienced a lost 17 years of growth.

Figure A

Income gains and losses by income group

Low- and middle-income households have fared poorly since 2000 because of faltering wages compounded by the Great Recession and the slow recovery. Figure B allows us to track the extent to which households at various income levels have been able to mount a recovery from the blow to income inflicted by the Great Recession and its long shadow (looking at the cutoffs for household income deciles and the 95th percentile). The data we cite in this graph corrects income growth for a break in the income series stemming from a redesign of the income questions asked in the CPS ASEC in 2013.

Households at the bottom of the income distribution experienced larger income declines as unemployment rose from 2007–2010, and failed to see improvements even by 2014. The lower a household’s income, the greater the income losses were—exacerbating inequality. With the income gains of the last three years we see that those in the top 10 percent are the only part of the income distribution to have significantly passed their pre-Great Recession income levels. Although income growth was relatively widespread in 2015 and 2016, 2017 saw stronger income growth for those at the top than those at the middle. The lowest fifth saw a relatively strong increase of 2.3 percent, however, their incomes have only just reached their 2007 levels. Median incomes in 2017 were just below (0.1 percent) those of 2007. One more year of normal income growth will restore median incomes to their pre-great-recession level. Maintaining real wage gains and further lowering unemployment is the recipe for that reasonable outcome.

Figure B

Although all groups now have incomes at or near their 2007 levels, households were really just making up for the ground lost during the recession and the subsequent slow recovery. A better benchmark is 2000, a year when the economy was closer to full employment. As shown in Figure C, the bottom half of households are still falling short of their 2000 income levels. Despite increases in recent years, households at the 10th percentile still have incomes 4.3 percent lower than they were in 2000. While median household incomes are closing in on their 2000 levels, they still fell 0.8 percent short in 2017.

Figure C also demonstrates the longer term trend of incomes at the top pulling away from those at the middle and bottom. In 2017, the 95th percentile household income was $237,034, which is 3.9 times the median household income of $61,372. The gap between the top and middle has widened since 2000, when the average income for the top 5 percent of households was 3.5 times the median.

Figure C

Earnings fell slightly in 2017

Besides lower employment and hours in the aftermath of the financial crisis, the key driver of the post-2000 income trends highlighted above has been anemic growth of hourly wages over the last seventeen years. The continued fall in unemployment over the last couple of years would be expected to yield solid wage growth. In 2017, both full-time year round men and women’s earnings fell by 1.1 percent, failing to keep up with inflation. The median man working full-time experienced a decline in real earnings of 1.1 percent, from $52,751 to $52,146, in 2017. The median woman working full time, full year also saw a decline of 1.1 percent, from $42,448 to $41,977. For this group of full-time workers, men’s earnings are still below their 2007 level (by 2.5 percent points), while women’s earnings are now 0.9 percent above. Looking over a longer horizon, however, the trends are starkly disappointing. The median woman working full time, full year saw her earnings grow from $31,328 in 1973 to $41,269 in 2002, and then stagnate in the 2002–2007 recovery, reaching only $41,602 by 2007. Since the recession that began at the end of 2007, women’s earnings have recovered, reaching $41,977 in 2017. Full-time men’s earnings dropped from $55,317 in 1973 to $53,466 in 2007, then fell further in the recession and have recovered only to $52,146 in 2017. Since 1973, the median man working full time, full year has seen no sustained earnings growth.

Figure D

While the earnings of full-time, full-year women have improved since 1973, progress in closing the gender earnings gap slowed significantly over the last decade. The gap between women’s and men’s earnings shrunk by 17.1 percentage points during the 27 year period from 43.4 percent in 1973 to 26.3 percent 2000 (an average annual change of 0.6 percentage points), but only shrunk 6.8 percent points from 2000–2017 (an average annual chance of 0.4 percentage points). Women’s earnings were 26.3 percent lower than men’s in 2000 and 19.5 percent lower in 2017. Because men and women experienced the same decline in earnings, the gender earnings gap remained unchanged from 2016 to 2017. The economy does have the potential to increase men’s and women’s wages and close the gender wage gap—between 2014 and 2015 both men’s and women’s median wages did rise, while the gender wage gap narrowed.

Stay tuned, we will be reporting on incomes, earnings, and poverty by race and ethnicity as well as a more in-depth look at wage differentials among men and women, black and white workers.