The Enduring Path to Financial Health: Graduate, Work, Marry, and Have Children

Terence Jeffrey / September 15, 2021

The basic path to financial health 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% 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.

College graduates earn a median income that is more than twice the median income of high school graduates.

How much someone actually works also makes a difference. Men and women who worked full-time year-round in 2020 had median incomes of $61,417 and $50,982, respectively, while male and female workers generally had median incomes of $49,389 and $35,838, respectively.

People who regularly go to work and maintain a family also tend to have low poverty rates, according to the Census data.

Of those who worked full-time year-round in 2020, only 1.6% were in poverty. Of those who worked at all, only 5% were in poverty. Of those who did not work at least one week during the year, 28.8% were in poverty.

Only 7.5% of married-couple families with related children under 18 were in poverty in 2020. But that rose to 17.8% among male householders who had no spouse present and a child under 18, and to 38.1% among female householders with no spouse present and a child under 18.

The highest poverty rate was among female householders who had no spouse present but did have a child under 6. For them, it hit 46.2%.

Education also leads people out of poverty, according to the data. Among Americans 25 and older with no high school diploma, 24.7% were in poverty in 2020. Among those with a high school diploma but no college experience, 13.2% were in poverty. Among those with some college but no degree, 8.4% were in poverty.

But among those with a bachelor’s degree or higher, only 4% were in poverty.

The Census data confirms two things: America is a land of opportunity, and those who take advantage of it by working hard and adhering to traditional values tend to earn more money than those who do not.

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