Poverty rate rises for second year while incomes are little changed

The U.S. poverty rate climbed for a second straight year in 2021 and household income slipped slightly as the economy slowly started a recovery from the COVID-19 pandemic.

The poverty rate rose to 11.6% from 11.5% in the prior year, annual data released Tuesday by the U.S. Census Bureau showed. It reached the lowest in six decades in 2019. Last year, 37.9 million people were in poverty, about 3.9 million more than in 2019. The U.S. poverty rate has been roughly cut in half over the last 60 years.

Median inflation-adjusted household income decreased last year to $70,784. It has declined about $2,000 over the last two years but has risen by about $20,000 since 1967.

The data help flesh out the picture of American families’ economic health in the first full year of President Biden’s term after the turbulence of 2020, when the pandemic was declared a national emergency.

In 2021, the annual jobless rate fell to 5.3% after surging to 8.1% in 2020, a nine-year high. In 2019, the rate was roughly where it is today at 3.7%.

In March of last year, Biden signed the American Rescue Plan, a $1.8-trillion pandemic relief package that provided $1,400 checks for millions of people — at a $410-billion cost — and extended unemployment benefits for those out of work. That followed the two major packages in 2020 totaling almost $3 trillion under President Trump.

There was a clear divergence between the wealthy and the poor: Median incomes at the 90th percentile rose to $211,956 in 2021, while incomes for those among the bottom 10th fell to $15,660. In 2020, the income-percentile limit for the lowest 10th was $16,400.

The so-called Gini index, a measure of income inequality, rose to 0.494, indicating the widest disparity on record.

The report affirms the importance of investment in the social safety net, said Kim Janey, president of nonprofit Economic Mobility Pathways.

“We should do more, and we should do better,” she said.

Last year, median incomes for Asians were at $101,418, Non-Hispanic whites at $77,999, Hispanics of any race at $57,981 and for Black Americans at $48,297.

The earnings ratio of women to men narrowed to 83.7%.