Income Inequality in the US Rose for the First Time in a Decade

Female Latina employee in supermarket stock photo
Drazen_ / iStock.com

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.

See: What Is the Highest Income for Food Stamps in 2022?
Find: How Much Cash To Have Stashed at Home at All Times

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.”

Make Your Money Work for You

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.

Make Your Money Work for You

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

Share This Article:

Make Your Money Work for You

About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
Learn More

Best Bank Accounts for September 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.