WASHINGTON, July 20 — The U.S. Census Bureau’s September 2022 report placed real median household income at $70,784 for 2021, based on the Current Population Survey Annual Social and Economic Supplement. That figure was not statistically different from the 2020 estimate of $71,186. Under the hood, this is the pre-tax wage and salary income of every resident over age 15, including personal business, investment and recurring sources, government entitlements such as unemployment insurance and Social Security, and disability payments and child support.
Noncash benefits like health coverage are excluded. The technical reality is that the CPS ASEC is the recommended instrument for national-level estimates, while the American Community Survey provides data for many geographic levels — the ACS pegged median household income at $61,937 in 2018.
The detail that matters: income distribution in the U.S. has become more unequal since around 1980. The share of income received by the top 1% rose from 10% or less during the 1953–1981 period to over 20% by 2007. Since the end of the Great Recession, however, income inequality has declined slightly, and at an accelerated pace since 2019.
As ever, the aggregate number hides considerable variation under the hood.
Trends in Inequality
Several structural factors affect median income. Aging of the population — specifically the retirement of the Baby Boom generation — pushes down the overall median. Changing patterns in work and schooling, and evolving family composition, also play a role.
The technical reality is that these shifts operate at different speeds, sometimes offsetting each other, sometimes compounding. Journalist Annie Lowrey wrote in September 2014 that root causes of wage stagnation include technological change, the decline of labor unions, and globalization.
Economists disagree on the relative weight of each factor. No single model commands consensus; the debate remains lively among practitioners.
Factors Behind Stagnation
The Census Bureau’s definition of household income is deliberately broad: it covers every resident over 15, includes personal business, investment, and recurring sources, and adds government entitlements. Noncash benefits such as health benefits are excluded. This matters because the official figure does not capture employer-provided health insurance, a significant component of real compensation for many workers.
One wry observation: the number Americans often cite — $70,784 in 2021 — is not statistically different from the pre-pandemic level of $71,186 in 2020, suggesting that the headline figure has been stuck in a narrow band for several years even as the composition of income streams changes under the hood. The detail that matters for future reports will be whether the acceleration in inequality decline since 2019 persists, or whether the underlying drivers — technological change, union decline, globalization — reassert their influence.
Sources
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