Income and Wealth in the United States: An Overview of Recent Data

Government surveys collect a wide range of information about the population of the United States that contain useful insights about Americans’ economic status. Three examples are the American Community Survey (ACS), which is the most reliable source for income data at the state and local level; the Current Population Survey Annual Social and Economic Supplement (ASEC), which serves as the primary source for income data at the national level; and the Survey of Consumer Finances (SCF), which provides detailed data on household wealth.

The ASEC and the ACS are conducted annually by the Census Bureau, but the ACS was not published in 2021 (and is therefore excluded from this blog) because of the Census Bureau’s concerns about the data for 2020, which suffered from quality issues due to the coronavirus pandemic. The SCF is conducted once every three years by the Federal Reserve, and the most recent edition contains data for 2019. Below are some examples of measures of income and wealth from the ASEC and the SCF.

Income Levels Vary Across Geography, Race, and Gender

According to the ASEC, median household income was $67,521 in 2020, which is a statistically significant decline from the median household income in 2019 of $69,560. Looking at data for national averages, however, may mask important differences by region, race, level of education, or other categories.

Income also varies by race and ethnicity. The table and chart below show median household income grouped by the race and ethnicity of the head of household. In 2020, households whose head was classified as Asian or White had median incomes that were higher than the national median, while households headed by people classified as Black or Hispanic had median incomes that were lower than the national median.

The table below shows median household income, grouped by educational attainment of the household head. Households led by an individual over 25 years of age with a bachelor’s degree or more have incomes that are considerably higher than the national median. Households led by an individual over age 25 with less than a high school diploma earn less than half of the national median.

The ASEC also gathers data on earnings, which includes wages and salaries, but excludes income sources such as public assistance and interest payments. In 2020, the median earnings for full-time, year-round male workers was over $10,000 higher than the median earnings for full-time, year-round female workers.

Wealth is an Important Component of Americans’ Economic Status

When it comes to describing the financial status of Americans, income doesn’t tell the whole story. Income measures the flow of money and assets during a given period of time, whereas wealth measures the stock of money and assets that have been accumulated as of a certain point in time. For example, a household with an income of $100,000 that saves $5,000 each year would have $25,000 of additional wealth at the end of five years.

The SCF measures wealth by using a concept called net worth. Net worth is the difference between a household’s assets and its debt. For example, if a household has $10,000 in its checking account, $40,000 of student debt, and $5,000 of credit card debt, then it has a net worth of -$35,000.

The table below shows median net worth in 2019 by race and education. (This data is updated once every three years; the next update will be released in 2023 and will contain data for 2022.) It illustrates how net worth varies by race, even when controlling for education level.

The ASEC, ACS, and SCF contain data for many more demographic categories, such as occupation, family structure, marital status, and number of children. Such data highlight variations among populations in the United States and can help lawmakers evaluate policies to address such differences.

Related: CBO: Income Inequality Continues to Rise

Image credit: IP Galanternik D.U.