2019 Set Income Records

…or is bias skewering the data?

By Cheryl Russell

“Happy days are here again” is what we would be singing if the nation wasn’t in the grip of the coronavirus pandemic. In mid-September, the Census Bureau released the latest official income statistics from the Current Population Survey’s Annual Social and Economic Supplement (CPS ASEC). The statistics show a huge rise in median household income—in 2019, before coronavirus. Not only did median household income climb to a record high of $68,703 in 2019, but the 6.8 percent increase in the median between 2018 and 2019, after adjusting for inflation, was the largest oneyear gain in the history of the series dating back to 1967.

But it turns out coronavirus can infect surveys as well as people. In fact, that’s the title of a working paper released by the Census Bureau along with the 2019 income data (Coronavirus Infects Surveys, Too: Nonresponse Bias during the Pandemic in the CPS ASEC). There’s a reason the data and this study were released at the same time. The study shows the Current Population Survey’s ASEC was itself infected by the coronavirus and the results should be taken with a grain of salt.

How does a 2020 pandemic taint 2019 income statistics? By selectively undermining survey response rates. Each year, the Census Bureau fields the Current Population Survey’s ASEC in March, asking respondents to report their income for the previous year. The 2019 income statistics were collected in March 2020—just as the pandemic swept through the country. The response rate for the ASEC in March 2020 was 10 percentage points lower than the rate in March 2019. Response rates did not drop evenly, however. Instead, lower-income households were much less likely than higher-income households to respond to the ASEC. Because higher income households were more likely to respond, the official 2019 income statistics are inflated.

How high, then, was median household income in 2019? In their study, the Census Bureau’s Johnathan Rothbaum and Adam Bee figure it out. After adjusting the numbers for nonresponse bias, they estimate median household income was $66,790 in 2019 rather than $68,703. They also determine that the increase in median household income between 2018 and 2019 was a more modest 3.9 percent rather than the record-busting 6.8 percent.

The nonresponse bias baked into the 2019 income data makes it difficult to use the statistics to discern trends or inform policy. But thanks to Rothbaum and Bee, one important fact emerges from the numbers. Even after adjusting for nonresponse bias, the median household income of $66,790 in 2019 is an all-time high. This record high has been a long time coming. For the past two decades, median household income had not managed to significantly surpass the high reached in 1999—until 2019. That’s something to be happy about.