Income Inequality in the US Rose for the First Time in a Decade
The pandemic induced a significant economic toll on Americans, per a recent report, which indicated income inequality increased by 1.2% — as measured by the so-called Gini index — between 2020 and 2021. This is the first annual increase since 2011, according to the Census Bureau’s “Income in the United States” report released Sept. 13.
Per the report, “The continued response to the COVID-19 pandemic, rising inflation, shifts in worker composition and other macroeconomic conditions, shaped the experiences of households in 2021.”
“The latest census data reinforces that the COVID-19 pandemic contributed to the rise of income inequality,” William Burckart, CEO of The Investment Integration Project, told GOBankingRates. “This is leading to many negative consequences for society generally and is particularly true in light of structural barriers to education, employment, home ownership, and healthcare — among many others — that further keep racial and ethnic minorities at the bottom of wealth distribution worldwide.”
In addition, the report found that real median household income was $70,784 in 2021, which is not statistically different from the 2020 estimate of $71,186, “and 2.8% lower than the 2019 median, the year before the most recent recession.”
In terms of gender inequality, women continued to earn less than men, but both groups saw their earnings decrease.
“Consistent with the findings for all full-time, year-round workers, median earnings of men ($61,180) and women ($51,226) who worked full-time, year-round decreased by 4.7% and 4%, respectively, between 2020 and 2021,” the report detailed.
Real median income also varied by age groups, with median income for household members aged 65 and over being hit the hardest — declining 2.6% between 2020 and 2021, according to the report. On the other hand, household members aged 15 to 24 and those 45 to 54 experienced increases of 5.2% and 2.6%, respectively.
The Census Bureau also put forth data indicating that Asian households had the highest median income in 2021, followed by non-Hispanic white households and Hispanic households, while Black households had the lowest median income.
Discover: Can I Draw Social Security at 62 and Still Work Full Time?
More: 8 Purchases Retirees Almost Always Regret
Interestingly, while there were no significant changes in median incomes by region, they were the highest in the West and the Northeast, followed by the Midwest and the South, per the report.
More From GOBankingRates
- Why Stealth Wealth Is the Best Way To Handle Your Money
- Vote for Your Favorite: GOBankingRates' Top 100 Most Influential Money Experts
- 3 Ways to Recession Proof Your Retirement
- 7 Things You Must Do To Create a Plan for Your Money
