After the decline in wages caused by the COVID-19 pandemic in 2020, median household income rose back up in 2021.
One major factor that contributed to an increase in median household income, as noted by the U.S. Census Bureau, is the increase in full-time workers in 2021. There were 11.1 million more full-time, year-round workers in 2021 than in 2020, following the relaxing of COVID-19 restrictions.
However, the overall increase in household income doesn’t paint a full picture of the economic situation of the U.S. in 2021. Income inequality also rose by 1.2 percent, according to the Census Bureau — the greatest increase since 2011. When controlling for full-time, year-round workers and adjusting for inflation, workers’ real earnings decreased by 4.1 percent in 2021.
A Bankrate survey from January 2022 showed that only about 4 in 10 Americans had enough savings to cover a surprise expense of $1,000. The lack of a stable emergency fund has persisted for most Americans into 2022, with a more recent survey finding that 58 percent of Americans are concerned about how much they have in their emergency savings.
Key U.S. income statistics
- The median income for U.S. households rose to $70,784 in 2021, an increase of $2,774, or about 4 percent, from the prior year, according to the Census Bureau’s income data released in September.
- After adjusting for inflation, however, the real median income decreased from 2020 by $402, or 0.6 percent.
- Adults ages 45 to 54 remained the top earners, with a median household income of $97,089 — about 37 percent higher than the median income across all age groups.
- Among full-time, year-round workers, the median earnings of women were $51,226, compared with $61,180 for men.
- Black households had the lowest median household income of all racial groups at $48,297.
- Maryland’s median household income was $97,332, the highest of all states again.
- The state with the lowest median household income was Mississippi at $46,637.
Median U.S. household income
Median household income is the amount brought in each year by all residents of a household ages 15 and over, according to the Census Bureau. It is a good measure of how families are doing financially and typically rises each year.
Real median household income is the yearly income adjusted for inflation. In this case, each real income amount is adjusted to 2021 dollars. While median household income rose in 2021 from the previous year, real median household income declined by $402, or about half a percentage point.
“Median” captures the middle number, indicating that half of all households earned more while half earned less.
While the national data captures the overall trend in income for all American households, age, gender, race, level of education and location all differently affect how much the average household earns.
Median income by state
Maryland, New Hampshire and New Jersey had the highest median household incomes of all the states, according to the Census Bureau. The median income in Washington D.C. was higher than every state but Maryland. The lowest state incomes were in Mississippi, West Virginia and Arkansas.
While the overall median income trended upwards year-over-year, several states faced a decrease in median household income. The largest decreases were in West Virginia (-9.88 percent) and Rhode Island (-6.48 percent). Meanwhile, the states with the largest increase in median income were Idaho (15.28 percent), Montana (14.55 percent) and Oklahoma (14.53 percent).
| State | Median U.S. income 2021 | Median U.S. income 2020 | Change |
|---|---|---|---|
| Source: U.S. Census Bureau | |||
| Maryland | $97,332 | $94,789 | 2.68% |
| District of Columbia | $90,640 | $88,218 | 2.75% |
| New Hampshire | $88,841 | $88,894 | -0.06% |
| New Jersey | $88,559 | $88,894 | -0.38% |
| Utah | $87,649 | $83,993 | 4.35% |
| Washington | $87,648 | $81,358 | 7.73% |
| Massachusetts | $86,566 | $87,812 | -1.42% |
| Colorado | $84,954 | $83,777 | 1.40% |
| Hawaii | $82,199 | $80,825 | 1.70% |
| Oregon | $81,855 | $76,855 | 6.51% |
| California | $81,575 | $77,652 | 5.05% |
| Alaska | $81,133 | $74,746 | 8.54% |
| Connecticut | $80,958 | $79,432 | 1.92% |
| Minnesota | $80,441 | $78,753 | 2.14% |
| Virginia | $80,268 | $82,214 | -2.37% |
| Illinois | $79,253 | $74,334 | 6.62% |
| Nebraska | $78,109 | $72,248 | 8.11% |
| Idaho | $76,918 | $66,725 | 15.28% |
| Vermont | $76,079 | $67,257 | 13.12% |
| Kansas | $75,979 | $73,082 | 3.96% |
| Rhode Island | $74,982 | $80,175 | -6.48% |
| South Dakota | $73,893 | $70,189 | 5.28% |
| New York | $72,920 | $68,659 | 6.21% |
| Pennsylvania | $72,627 | $70,789 | 2.60% |
| Iowa | $72,429 | $68,816 | 5.25% |
| Maine | $71,139 | $63,693 | 11.69% |
| Wyoming | $71,052 | $65,450 | 8.56% |
| Arizona | $70,821 | $67,088 | 5.56% |
| Indiana | $70,190 | $66,805 | 5.07% |
| Wisconsin | $69,943 | $67,405 | 3.77% |
| North Dakota | $68,882 | $64,115 | 7.44% |
| Delaware | $68,687 | $70,022 | -1.91% |
| Texas | $67,404 | $68,404 | -1.46% |
| Montana | $64,999 | $56,741 | 14.55% |
| Michigan | $64,488 | $64,392 | 0.15% |
| Nevada | $64,340 | $61,164 | 5.19% |
| Missouri | $63,594 | $62,178 | 2.28% |
| North Carolina | $62,891 | $60,430 | 4.07% |
| Ohio | $62,689 | $60,379 | 3.83% |
| South Carolina | $62,542 | $60,341 | 3.65% |
| Tennessee | $62,166 | $54,975 | 13.08% |
| Georgia | $61,497 | $59,265 | 3.77% |
| Oklahoma | $60,096 | $52,471 | 14.53% |
| Florida | $59,734 | $57,763 | 3.41% |
| Louisiana | $57,206 | $51,186 | 11.76% |
| Alabama | $56,929 | $54,689 | 4.10% |
| Kentucky | $55,629 | $56,755 | -1.98% |
| New Mexico | $53,463 | $50,906 | 5.02% |
| Arkansas | $50,784 | $50,777 | 0.01% |
| West Virginia | $46,836 | $51,970 | -9.88% |
| Mississippi | $46,637 | $45,134 | 3.33% |
Median income by age
Median household income typically peaks when workers reach their 40s and 50s, when many are well established in their careers, and 2020 was no exception. Households with workers ages 45 to 54 brought in the most income, with a median $97,089. This was a 2.6 percent increase in real median income from the previous year.
U.S. workers usually see the biggest jump in income after age 24 and the biggest decrease as they approach retirement — ages 65 and older. In 2021, those between 15 and 24 years had a 5.2 percent increase in real median income. Meanwhile, those ages 55 and older faced the biggest decline in real median income, at -2.6 percent from the previous year. Workers aged 25-34 also had a -0.1 percent decline in real median income.
Median income by gender
Women continued to earn less than men in 2021. Women who worked full-time, year-round positions earned a median income of about $10,000 less than their male counterparts.
Back in 1973, working women earned 56.6 cents for every dollar that men earned, according to the Census Bureau. In 2020, the amount earned by women compared with men increased to about 83 cents for every dollar men earned.
Full-time working women have gained some ground toward earning an equal wage over time, but a significant gap between what men and women earn remains.
According to the Center for American Progress, here are a few reasons why gender can impact income:
- Caregiving, whether raising children or taking care of aging parents, can cause women to have fewer years of work experience.
- Caregiving can also force women into working fewer hours or only part time.
- Women often work in lower-paying jobs or industries.
- Women, especially women of color, historically have been discriminated against when it comes to pay.
| Gender | Median U.S. income 2021 | Median U.S. income 2020 |
|---|---|---|
| Note: Median incomes are for full-time, year-round workers. Source: U.S. Census Bureau | ||
| Women | $51,226 | $50,0982 |
| Men | $61,180 | $61,417 |
Estimated median income by race
Race also plays a role in how much U.S. households bring in. Black and Hispanic households have historically been economically disadvantaged, due to a number of factors, including redlining and hiring discrimination. A Bankrate study from February 2022 also found that checking account fees hit Black and Hispanic households the hardest. Black households had the lowest and Hispanic households the second lowest median incomes in 2021.
Asian households had the highest median income, $101,418, according to the Census Bureau. This was a 1.8 percent increase in real median income from the previous year.
White households earned a median income of $74,262, down 1 percent from 2020. The median income for non-Hispanic white households was $77,999, a 1.2 percent decrease from the previous year.
Of all Hispanic households, the median income in 2021 was $57,981, a slight decrease (0.1 percent) from the previous year. Black households had the lowest median income in 2021, at $48,297, a 0.3 percent increase from 2020.
| Race | Median U.S. income 2021 | Median U.S. income 2020 |
|---|---|---|
| Source: U.S. Census Bureau | ||
| Asian | $101,418 | $94,903 |
| White | $74,262 | $71,231 |
| White, not Hispanic | $77,999 | $74,912 |
| Hispanic (any race) | $57,981 | $55,321 |
| Black | $48,297 | $45,870 |
Average income by education level
Education plays a significant role in how much workers earn during the year and over the course of their careers.
In 2021, 91.1 percent of American adults ages 25 and older had completed high school, an increase of 0.2 percent from 2020, according to the Census Bureau. Only 37.9 percent of adults over 25 years old had a college degree in 2021, up 0.2 percent from the previous year.
U.S. workers with a bachelor’s degree or higher earned more than twice the income of those with only a high school education, according to Census Bureau data. Those with a college degree earned a median income of $115,456 in 2021, about 129 percent more than the $50,401 median income of those with only a high school diploma.
Having some college education increased median income by almost a third (27.7 percent) to $64,378.
Workers with a bachelor’s degree or higher had a median income that was about 280 percent more than those who didn’t finish high school.
| Education level | Median U.S. income 2021 | Median U.S. income 2020 |
|---|---|---|
| Source: U.S. Census Bureau | ||
| Bachelor’s degree or higher | $115,456 | $106,936 |
| Some college | $64,378 | $63,653 |
| High school, no college | $50,401 | $47,405 |
| No high school diploma | $30,378 | $29,547 |
Keeping up with inflation
Real median income for full-time, year-round workers decreased for the second year in a row in 2021, but many have recovered jobs since the peak of the COVID-19 pandemic. With inflation still at a significant high, it could be a good time to demonstrate your contributions to the workplace and ask for a pay raise.
Many have already done so — 61 percent of workers have gotten a pay raise or found a higher-paying job in the past year, according to a recent Bankrate study. However, the study also found that of that 61 percent, about half said their income has not kept up with rising consumer prices.
Bottom line
While median income increased by $2,774 in 2021, after a decrease during the height of the COVID-19 pandemic, it’s been lagging behind inflation — real median income decreased again, by $402.
Knowing what the average household makes is key to understanding the health of the U.S. economy and how well families navigate economic challenges, such as the pandemic and — more recently — a surge in inflation, raising the costs of housing, food and other household expenses.
Though some factors, such as the economy, are beyond workers’ control, Census Bureau data indicate that earning a college degree goes a long way toward boosting household income. Workers who have a bachelor’s degree or higher earn more than double the median income of those with only a high school diploma.
An income gap persists in terms of both gender and race. The median earnings of men were about $10,000 more than women. Black households had the lowest median income of any racial group, and despite efforts to support Black businesses, there was only a 0.3 percent increase in real median income for Black households in 2021.
Age is also a factor. Workers 45-54, the most productive period of workers’ lives, earn much more than those who are younger and older. Tucking away some of those earnings in a retirement plan, individual retirement account (IRA) or other savings vehicle can help households afford unexpected expenses in later years.
While inflation is high, it’s important to both focus on paying down debt and build an emergency fund. Paying off consumer debt can help you save by reducing how much you pay on interest in the long run. It’s also important to fortify your emergency savings — with the potential for a recession, having emergency savings can help ensure stability and peace of mind.
Staff writer Matthew Goldberg contributed to a previous version of this article.
Introduction
As an expert in the field of economics and income statistics, I can provide you with a comprehensive analysis of the concepts discussed in this article. I have extensive knowledge and experience in this area, which will enable me to address your questions and provide you with accurate information.
Increase in Median Household Income
The U.S. Census Bureau noted that one major factor contributing to the increase in median household income in 2021 was the rise in full-time workers. In 2021, there were 11.1 million more full-time, year-round workers compared to 2020, following the relaxation of COVID-19 restrictions [[1]].
However, it is important to note that the overall increase in household income does not provide a complete picture of the economic situation in the U.S. in 2021. Income inequality also rose by 1.2 percent, the largest increase since 2011. When adjusting for inflation and considering full-time, year-round workers, workers' real earnings actually decreased by 4.1 percent in 2021 [[1]].
Savings and Emergency Funds
According to a Bankrate survey from January 2022, only about 4 in 10 Americans had enough savings to cover a surprise expense of $1,000. The lack of a stable emergency fund has persisted for most Americans into 2022, with 58 percent of Americans expressing concern about the amount they have in their emergency savings [[1]].
Key U.S. Income Statistics
Here are some key income statistics for the U.S. in 2021, as reported by the Census Bureau:
- The median income for U.S. households rose to $70,784 in 2021, an increase of $2,774 or about 4 percent from the previous year. However, when adjusted for inflation, the real median income decreased by $402 or 0.6 percent [[1]].
- Adults ages 45 to 54 remained the top earners, with a median household income of $97,089, which is about 37 percent higher than the median income across all age groups [[1]].
- Among full-time, year-round workers, the median earnings of women were $51,226, compared with $61,180 for men [[1]].
- Black households had the lowest median household income of all racial groups at $48,297 [[1]].
- Maryland had the highest median household income among all states at $97,332, while Mississippi had the lowest at $46,637 [[1]].
Median Household Income
Median household income is the amount brought in each year by all residents of a household ages 15 and over. It is a good measure of how families are doing financially and typically rises each year. Real median household income is the yearly income adjusted for inflation, providing a more accurate comparison over time. In 2021, while median household income rose from the previous year, real median household income declined by $402, or about half a percentage point [[1]].
Median Income by State
According to the Census Bureau, Maryland, New Hampshire, and New Jersey had the highest median household incomes among all states. The median income in Washington D.C. was higher than every state except Maryland. On the other hand, Mississippi, West Virginia, and Arkansas had the lowest median household incomes [[1]].
Median Income by Age
Median household income typically peaks when workers reach their 40s and 50s, as many are well-established in their careers. In 2021, households with workers ages 45 to 54 had the highest median income at $97,089. Workers between the ages of 15 and 24 experienced a 5.2 percent increase in real median income, while those aged 55 and older faced the biggest decline at -2.6 percent from the previous year [[1]].
Median Income by Gender
In 2021, women continued to earn less than men. Women who worked full-time, year-round positions earned a median income of about $10,000 less than their male counterparts. While progress has been made over the years, a significant wage gap between men and women still exists [[1]].
Estimated Median Income by Race
Race also plays a role in household income. Asian households had the highest median income at $101,418, followed by white households at $74,262. Hispanic households had a median income of $57,981, and black households had the lowest median income at $48,297 [[1]].
Average Income by Education Level
Education level significantly impacts income. In 2021, workers with a bachelor's degree or higher earned more than double the income of those with only a high school education. Those with a college degree earned a median income of $115,456, while those with only a high school diploma had a median income of $50,401. Having some college education increased median income by almost a third to $64,378 [[1]].
Keeping Up with Inflation
Real median income for full-time, year-round workers decreased for the second year in a row in 2021. With inflation still high, it is important for workers to demonstrate their contributions to the workplace and consider asking for a pay raise. While many workers have received pay raises or found higher-paying jobs, about half of them have stated that their income has not kept up with rising consumer prices [[1]].
Conclusion
Understanding income statistics is crucial for assessing the economic health of a country and the financial well-being of its households. While median household income increased in 2021, it did not keep up with inflation. Factors such as age, gender, race, and education level all play a role in determining income levels. It is important to address income inequality and work towards closing the wage gap to ensure a more equitable society. Additionally, building emergency savings and managing debt can provide stability and peace of mind in uncertain economic times.
