'A rollercoaster': People of color made economic gains last decade, but pandemic threatens progress

Economic prospects gradually improved for Americans across racial and ethnic demographics in the second half of the 2010s, but significant financial gaps between groups persist, according to new data from the Census Bureau. And the COVID-19 pandemic likely stalled many of those gains for all Americans, experts said.

The bureau'sAmerican Community Survey estimates for 2016 through 2020 show median household incomeclimbed to $64,994, up 10% from 2011 to 2015. People of color saw the biggest percentage gains, according to a USA TODAY analysis of the data.

Household income grew for Latinos by 17.2% in that period, for Asian Americans by 13.1%, for Native Americans and Alaska Natives by 12.2% and for Black Americans by 12%. White people, who have long held most of the nation's wealth, saw income grow by 8.9%, but still retained a substantial advantage in household income compared with other groups, except for Asian Americans.

The number of people without health insurance, something that can help physical and financial well-being, dropped by almost a third, while the percentage of people below the poverty level dropped from 15.5% to 12.8%.

But that nearly decade-long period of economic growth following the previous decade's Great Recession was quickly halted by the COVID-19 pandemic, early data suggests. The Census Bureau noted that its five-year estimates aren't a good measure of rapid change, but it acknowledged a shift in direction from the long-term upward economic trend after the pandemic began to spread across the nation in March 2020.

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"Although the most recent estimates contain data that include the economic shock from the COVID-19 pandemic, they also contain data collected in the final years of the longest expansion in the history of U.S. business cycles. These data only reflect a small part of the impact of the pandemic on social, economic and housing measures," the Census Bureau said in a news release accompanying the data.

Communities of color trailed in economic gains

Long before the pandemic, white Americans were benefiting more from the economic recovery than other demographic groups.

USA TODAY's analysis of economic gains and losses from 2016 to 2020 showedpersistent gaps between the non-Hispanic white population and other groups in almost all categories.

Poverty rates remained higher for Americans of color,many of whom were stillstruggling to recover from the Great Recession. Roughly 24% of Native Americans lived below the poverty level, as did 22% of Black Americans and 18% of Hispanics. Fewer than 11% of Asian Americans and white people lived in poverty.

Despite improvements, continuing racial gaps indicate "what we say all the time, that the Black community – and some have said the brown community – are like the caboose on the train. We're behind the engine. When the engine speeds up, we speed up, but we never catch up with the engine," said Marc Morial, president and CEO of the National Urban League.

Economic gains also weren't spread equally between income classes, with lower-income people of color likely to reap the fewest rewards, experts said.

"I think overall the economy became much more unequal in terms of, after you account for the business cycle, the distribution of earnings," said Paul Ong, a University of California, Los Angeles research professor and economist. "So, you have that counterforce working and quite often that increase in inequality takes on a racial dimension."

COVID-19 an ongoing economic threat

It's difficult to gauge from the limited Census Bureau data how much the pandemic has affected people financially, but experts say it changed the economic situation for many, especially those in less secure financial positions.

"The pandemic has exacerbated disparities in education, employment, salaries, wages and health care," said U.S. Rep. Raul Ruiz, D-California, chair of the Congressional Hispanic Caucus. "Latinas had the highest rate of job loss and reduction in wages or salaries, compared to other groups," partly because so many work in service and tourism industries brutalized by COVID, he added.

According to a data analysis conducted by Ong, the rate of joblessness – those unemployed or temporarily or permanently laid off as a percent of the workforce – for U.S. residents 16 and older surged for all demographic groups from2019 to 2020 with the steepest jumps experienced by Black and Hispanic workers.

Emergency federal action, including extensions of unemployment benefits, prevented much more serious consequences early in the pandemic, but continued action is needed to prevent further harm, said Enrique Lopezlira, director of the Low-Wage Work program at the University of California, Berkeley, Labor Center.

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"There is research showing that in 2020 the government responses to the pandemic did help people's income and did help bring them out of poverty," said Lopezlira.

He said without further action the pandemic's effects on poverty will likely be amplified going forward.

One bright spot during the pandemic appears to be stability in the number of people who have health insurance, an asset that can help people maintain good health while also protecting them from financial catastrophe.

The pandemic was expected to erode health insurance coverage, which grew rapidly in the years after the 2010 passage of the Affordable Care Act, but survey data suggest that hasn't happened, said Gideon Lukens, director of research and data analysis for the Health Policy division of the Center on Budget and Policy Priorities, a nonpartisan research and policy institute.

"At the start of the pandemic, analysts projected between 3 and 9 million more uninsured people. Instead, you appear to have little change in the uninsured rate. And there's preliminary evidence that the uninsured rate could even be lower now than it was prior to the pandemic," he said, attributing that to a provision of continuous Medicaid coverage during the public health emergency, increased premium subsidies and a big push in outreach and enrollment assistance under the Biden administration.

More government intervention could further lift up Americans, Congressional Hispanic Caucus Chair Ruiz said.

He supports recently passed infrastructure legislation designed to expand broadband service in lower-income communities. And he is calling for under-resourced schools to receive money for counseling and social services, along with aid to ensure clean water and environmentally safe campuses.

"Moving forward, there needs to be a systemic focus on equity, meaning that resources should go where the needs are the greatest," Ruiz said.

Improvements over the course of the 2010s offer hope, but more must be done to lessen inequality, said the Urban League's Morial, adding that a comprehensive housing plan is needed and that the expired child tax credit, which helped families escape poverty, must be reinstated.

"One of the most important takeaways is that the substantial differential remains. But it also shows you that you can have some progress. What would the world look like if you had 25, 30, 40 years of sustained progress?" he said. "That's what we've not seen. We've seen a rollercoaster."