Household income in the US typically rises each year, but the economic disruption caused by the coronavirus pandemic took a toll on wages in 2020.

Median household income fell nearly 3%, compared with 2019, according to U.S. Census Bureau estimates. The agency said it was the first “statistically significant” decrease since 2011.

The drop in household income was largely attributable to labour-market disruptions caused by the pandemic, which resulted in layoffs, furloughs and reduced wages. The fallout from COVID-19 points to the importance of having an emergency fund to help households weather periods of unemployment or other unanticipated events.

A recent Bankrate survey found that many US households are just one financial emergency away from taking on costly credit card debt, and an emergency fund, stashed in a savings account, money market account or certificate of deposit at a federally insured bank that pays a competitive yield, could help them avoid that hardship.

Key US income statistics

Median income for US households fell to $67,521 in 2020, a drop of $2,039, or 3%, from 2019, according to the Census Bureau data, released in September. Other key findings include:

• Adults ages 45 to 54 remained the nation’s top earners, bringing in a median household income of $90,359, 3.2% less than in 2019.
• Maryland, with median household income of $94,384, topped every other state in the nation.
• Women earned a median wage of $50,982 compared with $61,417 for men, for full-time, year-round work. according to the Census Bureau.
• Same-sex married couples earned $107,200 in household income, more than opposite-sex married couples at $96,930.

Median US household income

Median household income is the amount brought in each year by all residents of a household ages 15 and over, according to the Census Bureau. It is a good measure of how families are doing financially and typically rises each year. 2020’s drop suggests that many US households were faring worse than they did in 2019.

“Median” captures the middle number, indicating that half of all households earned more while half earned less.

For 2020, The median income was $67,521, 2.9% less than the $69,560 recorded in 2019. Despite the drop, the median income in 2020 was higher than it was in the three years prior to 2019. Median household income in 2018 was $65,127, $64,557 in 2017 and $63,683 in 2016.

Age, gender, race, level of education and location all play a role in how much the average household earns.

Year	Median income
2020	$67,521
2019	$69,560
2018	$65,127
2017	$64,557
2016	$63,683

Median income by age

Median household income typically peaks when workers reach their 40s and 50s when many are well established in their careers, and 2020 was no exception. Households with workers ages 45 to 54 brought in the most income, with a median of $90,359, though it was still 3.2% less than in 2019.

The youngest (ages 16-24) and eldest workers (65 and older), also saw drops of more than 3%, to $46,886 and $46,360, respectively. Those 35 to 44 recorded the biggest fall — 4.8% — to $85,694, while 25- to 34-year-olds saw a modest increase (0.6%) to $71,566.

US workers usually see the biggest jump in income after age 24 and the biggest decrease as they approach retirement — ages 65 and older.

Median income by gender

Women continued to earn less than men in 2020. Women who worked full-time, year-round positions earned a median income of about $10,000 less than their male counterparts.

Back in 1973, working women earned 56.6 cents for every dollar that men earned, according to the Census Bureau. In 2019, the amount earned by women compared with men increased to 82.3 cents for every dollar men earned.

Full-time working women have gained some ground toward earning an equal wage over time, but a significant gap between what men and women earn remains.

According to the Center for American Progress, here are a few reasons why gender can impact income:

• Caregiving, whether raising children or taking care of ageing parents, can cause women to have fewer years of work experience.
• Caregiving can also force women into working fewer hours or only part-time.
• Women often work in lower-paying jobs or industries.
• Women, especially women of colour, historically have been discriminated against when it comes to pay.

Gender	Median U.S. income in 2020	Median U.S. income in 2019
Women	$50,982	$47,889
Men	$61,417	$58,173

Note: Median incomes are for full-time, year-round workers.
Source: U.S. Census Bureau.

Estimated median income by race

Race also plays a role in how much U.S. households bring in, though nearly all households, regardless of race, saw incomes drop in 2020.

Asian households earned the most, with a median income of $94,903, according to the Census Bureau, a 4.5% drop from $99,400 in 2019, the largest percentage drop among racial groups.

White households earned a median income of $71,231, down 2.6% from 2019, while White non-Hispanic households saw a 2.7% drop to $74,912 from $77,007 in the year prior.

Hispanic households of any race earned a median income of $55,321, also down 2.6% from $56,814 in the previous year. Black households, meanwhile, earned a median income of $45,870 in 2020, a slight drop from $46,005 in 2019, statistically unchanged.

Race	Median U.S. income (2020)	Median U.S. income (2019)
Asian	$94,903	$99,400
White	$71,231	$73,105
White, not Hispanic	$74,912	$77,007
Hispanic (any race)	$55,321	$56,814
Black	$45,870	$46,005

Source: U.S. Census Bureau.

Average income by education level

Education plays a significant role in how much workers earn during the year and over the course of their careers.

U.S. workers with a bachelor’s degree earned more than twice the income ($47,405) of those with only a high school education, according to Census Bureau data. Those with a college degree earned a median income of $106,936 in 2020, 126% more than the $47,405 earned by those with only a high school diploma.

Having some college education increased median income by more than a third (34.3%) to $63,653.

Workers with a bachelor’s degree or higher had a median income that was about 262% more than those who didn’t finish high school.

Education level	Median U.S. income (2020)	Median U.S. income (2019)
Bachelor’s degree or higher	$106,936	$110,002
Some college	$63,653	$65,510
High school, no college	$47,405	$49,316
No high school diploma	$29,547	$31,347

Source: U.S. Census Bureau.

Median income by state

According to the Census Bureau, Maryland, New Hampshire and Massachusetts had the highest median income among US states. The median income in Washington, DC was higher than every state except for Maryland, while New Mexico, Arkansas and Mississippi had the lowest.

Not all states weathered the economic downturn the same, with some reporting increases in household income, while most others reported decreases. Nevada, with a 14% drop, Oklahoma (-11.9%) and Vermont (-10%) led states with the largest decreases in median household income, while Rhode Island, with a 14.1% rise, Colorado (13.9%) and South Dakota (8.6%) recorded the largest increases. Ten states, meanwhile, saw median household incomes decrease by 1% or less.

State	Median income 2020	Median income 2019	Change
Maryland	$94,384	$95,572	-1.2%
District of Columbia	$88,311	$93,111	-5.2%
New Hampshire	$88,235	$86,900	1.5%
Massachusetts	$86,725	$87,707	-1.1%
New Jersey	$85,239	$87,726	-2.8%
Utah	$83,670	$84,523	-1.0%
Colorado	$82,611	$72,499	13.9%
Virginia	$81,947	$81,313	0.8%
Washington	$81,083	$82,454	-1.7%
Hawaii	$80,729	$88,006	-8.3%
Rhode Island	$80,012	$70,151	14.1%
Connecticut	$79,043	$87,291	-9.4%
Minnesota	$78,461	$81,426	-3.6%
California	$77,358	$78,105	-1.0%
Oregon	$76,554	$74,413	2.9%
Alaska	$74,476	$78,394	-5.0%
Illinois	$73,753	$74,399	-0.9%
Kansas	$72,815	$73,151	-0.5%
Nebraska	$72,024	$73,071	-1.4%
Pennsylvania	$70,117	$70,582	-0.7%
South Dakota	$69,787	$64,255	8.6%
Delaware	$69,132	$74,194	-6.8%
Iowa	$68,469	$66,054	3.7%
New York	$68,304	$71,855	-4.9%
Texas	$68,093	$67,444	1.0%
U.S.	$67,521	$68,703	-2.9%
Wisconsin	$67,094	$67,355	-0.4%
Vermont	$66,902	$74,305	-10.0%
Arizona	$66,628	$70,674	-5.7%
Idaho	$66,499	$65,988	0.8%
Indiana	$66,360	$66,693	-0.5%
Wyoming	$65,108	$65,134	0.0%
Michigan	$63,829	$64,119	-0.5%
North Dakota	$63,657	$70,031	-9.1%
Maine	$63,440	$66,546	-4.7%
Missouri	$61,901	$60,597	2.2%
Nevada	$60,956	$70,906	-14.0%
North Carolina	$60,266	$61,159	-1.5%
Ohio	$60,110	$64,663	-7.0%
South Carolina	$60,097	$62,028	-3.1%
Georgia	$58,952	$56,628	4.1%
Florida	$57,435	$58,368	-1.6%
Kentucky	$56,525	$55,662	1.6%
Montana	$56,442	$60,195	-6.2%
Tennessee	$54,665	$56,627	-3.5%
Alabama	$54,393	$56,200	-3.2%
Oklahoma	$52,341	$59,397	-11.9%
West Virginia	$51,615	$53,706	-3.9%
Louisiana	$50,935	$51,707	-1.5%
New Mexico	$50,822	$53,113	-4.3%
Arkansas	$50,540	$54,539	-7.3%
Mississippi	$44,966	$44,787	0.4%

Source: U.S. Census Bureau.

Asking for more money

Even as data show that household income fell in 2020 and a recent Bankrate poll showed most workers haven’t received a raise, many employees have pressed for more pay. Though the pandemic caused unemployment to surge in some sectors, depressing incomes, in others it created labour shortages, allowing some workers to demand higher wages. Others simply quit their jobs confident in the ability to find better pay and working conditions.

The phenomenon has become known as the Great Resignation, and it’s estimated that more than 47 million US workers have switched jobs in response to employment stresses driven by the pandemic, according to the U.S. Bureau of Labor Statistics.

Experts suggest there’s never been a better time to request an increase in wages, especially in careers with high demand.

“Employees whose skills are in the most demand or are among the highest performers should be able to command a premium,” says Mark Hamrick, Bankrate senior economic analyst and Washington bureau chief. “There’s an increased emphasis on jobs with higher degrees of flexibility, including hours worked, as well as opportunities to work remote or from home at least part of the time.”

Bottom line

The 2.9% drop in US household income in 2020 was unusual but not unprecedented. The coronavirus pandemic took a toll on wages, forcing median household income down in a majority of states, irrespective of race and regardless of education.

Knowing what the average household makes is key to understanding the health of the US economy and how well families navigate economic challenges, such as the pandemic and — more recently — a surge in inflation, raising the costs of housing, food and other household expenses.

Though some factors, such as the economy, are beyond workers’ control, Census Bureau data indicate that earning a college degree goes a long way toward boosting household income. Workers who have a bachelor’s degree or higher earn more than double the median income of those with only a high school diploma.

Age is also a factor. Workers 45-54, the most productive period of workers’ lives, earn much more than those who are younger and older. Tucking away some of those earnings in a retirement plan, individual retirement account (IRA) or other savings vehicle can help households afford unexpected expenses in later years.

Lastly, building a nest egg is key. Households that didn’t have to take on credit card debt or personal loans during the pandemic weren’t saddled with the debt that can prevent establishing an emergency fund, or saving for retirement or a rainy day. Having a well-funded nest egg not only ensures households can stay out of debt but also assures stability and peace of mind.