Inflation-Adjusted US Household Income Rises, Yet Not to Pre-Pandemic Levels: Census

New federal government data show that real (inflation-adjusted) U.S. household incomes rose in 2023 for the first time since 2019 but have failed to recover to their pre-COVID-19 pandemic levels.
Last year, the median income was $80,610, a 4 percent increase from $77,540 in 2022, according to the Census Bureau’s “Income, Poverty and Health Insurance Coverage in the United States: 2022” report.
Real median household income gains were mixed throughout ethnicities from 2022 to 2023. They rose by 5.4 percent for white households and by 5.7 percent for non-Hispanic white households. There was little change in median incomes for Asian, black, and Hispanic households.
The White House said the report’s findings indicate that the administration has made “real progress growing the middle class” but that more work needs to be done to “lower poverty and build up the middle class.”
Despite households’ real gains, median incomes were $600 below their levels before the COVID-19 pandemic.
While prices for many essential items—food, electricity, gasoline, and housing—are higher than they were a few years ago, the latest census data support the trends observed in the consumer price index report, which shows further moderation in inflationary pressures.
“It’s actually positive across all categories this year,” Calder said at an American Enterprise Institute event on Sept. 10. “So, the change in median income is positive in all categories, and that is opposite to what it was last year. In 2022, regional income had declined in every category.”
According to the census statistics, increases in median household incomes were seen nationwide: Northeast (3.2 percent), the Midwest (6.6 percent), the South (3.3 percent), and the West (2.4 percent).
According to the Census Bureau report, the Supplemental Poverty Measure—a primary measurement of the nation’s poverty rate after adjusting for government transfer payments such as tax credits and food assistance—rose to 12.9 percent in 2023, up from 12.4 percent in the previous year.
In addition, the Supplemental Poverty Measure child poverty rate climbed by 1.3 percentage points, to 13.7 percent, in 2023. Census Bureau’s official poverty rate decreased to 11.1 percent from 11.5 percent.
Sharon Parrott, president of the Center on Budget and Policy Priorities, encouraged more work by public policymakers to lower poverty levels because the figures point to “uneven trends.”
“Using a version of Census’s most complete poverty measure, the Supplemental Poverty Measure … that adjusts only for inflation, there is evidence of uneven trends, with poverty improving among seniors and remaining about flat among other age groups,” Parrott said in a statement.
Both presidential candidates have proposed expanding the child tax credit to provide more relief to low- and middle-income families.
Economists think it is crucial to consider the importance of both the Supplemental Poverty Measure and official poverty measures to understand the full impact of economic policies on U.S. households.
“I think that if you start to really zoom in on the data, you can really learn something when we have a discussion about the two different types of ways in which we would characterize poverty in the U.S.,” Bradley Hardy, distinguished professor at Georgetown University’s McCourt School of Public Policy, said at the American Enterprise Institute event.
Meanwhile, the proportion of Americans with health insurance dipped by 0.1 percent last year, to 92 percent. About 26.4 million Americans—8 percent of the U.S. population—did not have health insurance in 2023.
The report’s breakdown of uninsured rates confirmed a drop in enrollment among Americans younger than 45. Specifically, 5.8 percent of Americans younger than age 19 did not have health insurance coverage, up from 5.4 percent in 2022.
“This increase was driven by a drop in employer coverage that was not offset by increases in Medicaid or Marketplace coverage for children,” Jennifer Tolbert, director of state health reform and deputy director of the program on Medicaid and uninsured at policy analysis organization KFF, said in an assessment of the recent data.
For the first time since 2003, the female-to-male earnings ratio slipped. Real median earnings for men who worked full time for the entire year increased by 3 percent, while women recorded a 1.5 percent gain.