COVID-19 Pandemic Pinches Finances of America’s Lower- and Middle-Income Families

The financial hardships caused by the COVID-19 recession in the U.S. were endured mostly by lower- and middle-income families. From 2019 to 2020, the median income of lower-income households decreased by 3.0% and the median income of middle-income households fell by 2.1%. In contrast, the median income of upper-income households in 2020 was about the same as it was in 2019, according to a new Pew Research Center analysis of government data. 

The setbacks to the finances of lower- and middle-income households during the pandemic mark a significant reversal from their recent experiences. From 2010 to 2019, following the end of the Great Recession, the median incomes of households in all income tiers had increased at about the same pace – an annual average rate of 1.8% for lower-income families, 1.6% for middle-income families and 1.9% for upper-income families, after adjusting for inflation.