The surprising post-pandemic drop in income inequality
Summary
New data from the Federal Reserve shows that between 2021 and 2024, middle- and lower-income American families had higher incomes after adjusting for inflation, while the richest 10% saw their incomes fall. Despite this, wealthy families increased their net worth significantly, especially through assets like stocks and houses.Key Facts
- Median family income in the U.S. rose by 7% after adjusting for inflation from 2021 to 2024.
- Income for the top 10% of earners dropped by 14% in the same period.
- Wealthy families (top 10% by income) saw their median net worth increase by 31% from 2022 to 2025.
- The median net worth for the average family increased by only 2%, while families in the bottom 40% saw their net worth slightly decline.
- The data comes from the Federal Reserve’s Survey of Consumer Finances, released every three years.
- Blue-collar workers had bigger wage gains during the tight job market and high inflation years of 2021 and 2022.
- Top earners’ incomes can fluctuate a lot because they often come from capital gains and business income.
- More families are carrying high debt payments, with the debt payment-to-income ratio rising to 15.4% and the share of families with high debt payments increasing to 8.6%.
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