The Enduring Path to Financial Health: Graduate, Work, Marry and Have Children
The basic path to financial success in this country has been revealed once again by the Census Bureau's annual report on income and poverty, which was released this week. What did it show?
People who graduate from college, get a job, get married and have children generally earn more money than those who do not. People who drop out of high school, do not work and have children out of wedlock generally earn less and are more likely to be in poverty.
One may have suspected this was the case simply by looking at the society around us. But the Census Bureau's hard numbers and the lessons they teach are worth reviewing.
The COVID-19 pandemic made 2020 a tough year in the United States, causing a recession last March and April and leading to an overall decline in household income.
"Median household income was $67,521 in 2020, a decrease of 2.9 percent from the 2019 median of $69,560," the Census said in its report. "This is the first statistically significant decline in median household income since 2011."
The Census Bureau categorizes its income statistics by what it calls "family households" and "nonfamily households." "A family household," it says, "is a household maintained by a householder who is related to at least one other person in the household by birth, marriage, or adoption and includes any unrelated individuals who may be residing there. A nonfamily household "is a householder living alone (a one-person household) or sharing the home exclusively with nonrelatives."
When looked at by family structure, by far the wealthiest American households in 2020 were those maintained by a married-couple family. The poorest were those maintained by a female living with no family.
In fact, married couple families had a median annual income that was almost three times as big ($101,517) as the median annual income of a female householder living without a family ($35,574) and more than twice as big as the median annual income of a male householder living without a family ($47,259).
A male householder heading a family with no spouse present had a median income of $67,304, according to the Census Bureau. A female householder heading a family with no spouse present had a median income of $49,214.
When looked at by educational attainment, Americans 25 and older with a bachelor's degree or higher had a median income of $106,936 while those who attended only some college had a median income of $63,653. Those who ended their education with only a high school diploma (and never went to college) had a median income of $47,405. But those who never graduated high school had a median income of only $29,547.