Factor income (defined as labor income from work and capital income from ownership) fell significantly during the COVID-19 pandemic. This fall was much more dramatic for those in the Bottom 50% than for other income groups. However, as shown in the graph below, factor income recovered quickly for every group. All income figures are adjusted for price inflation.
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Top 10%
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Bottom 50%
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Thanks to government transfers to help with COVID losses (including checks to families, extra unemployment benefits, the Paycheck Protection Program, etc.), disposable income (defined as income after taxes and cash transfers) increased by a sizable amount, especially for the Bottom 50%.
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Middle 40%
Bottom 50%
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After a very short dip in early 2020, wealth per adult (defined as the value of all assets owned minus debts) boomed during the pandemic. As shown in the graph below, this wealth growth was higher for the rich than for the middle class.
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Top 0.01%
Top 0.1%
Top 1%
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During the COVID-19 recession, racial disparities in pretax income were less pronounced than during the Great Recession. The collapse in income in spring 2020 was broadly similar across racial groups, and all recovered at roughly the same pace. By early 2021, all groups had returned to their pre-crisis pretax income level—a stark contrast with the Great Recession, during which Black and Hispanic adults experienced a prolonged income decline lasting several years.
Pretax income dynamics by gender during the COVID-19 recession closely mirror the pattern seen across racial groups. Both men and women experienced a sharp but short-lived income decline in spring 2020, followed by a swift recovery. As with racial groups, the gender dynamics during COVID-19 were more equal than those observed during the Great Recession.