The latest data from the federal government reveals that real U.S. household incomes increased in 2023, marking the first rise since 2019. However, these incomes have not yet fully recovered from their pre-pandemic levels. The median income for last year was $80,610, a 4 percent increase from $77,540 in 2022. While there were positive gains in median household incomes for white and non-Hispanic white households, there was little change for Asian, black, and Hispanic households.
The White House hailed these findings as evidence of progress in growing the middle class, but acknowledged that more needs to be done to reduce poverty and strengthen the middle class. Despite the gains, median incomes are still $600 lower than before the pandemic. This is especially significant considering the rise in prices for essential items such as food, electricity, gasoline, and housing. However, the latest Census data align with the trends observed in the Consumer Price Index (CPI) report, which indicates a moderation in inflationary pressures.
One area of the annual Census report that deserves attention is regional income categories, according to Vanessa Calder, the director of Opportunity and Family Policy Studies at the Cato Institute. She highlighted that the change in median income was positive across all categories this year, which is a departure from the decline seen in 2022. The Census statistics show that median household incomes increased in all regions of the country: the Northeast (3.2 percent), the Midwest (6.6 percent), the South (3.3 percent), and the West (2.4 percent).
The Census Bureau’s report also provides insights into poverty rates. The Supplemental Poverty Measure, which adjusts for government transfer payments like tax credits and food assistance, rose to 12.9 percent in 2023, up from 12.4 percent the previous year. The child poverty rate, measured by the Supplemental Poverty Measure, increased by 1.3 percentage points to 13.7 percent in 2023. However, the official poverty rate decreased slightly from 11.5 percent to 11.1 percent. Sharon Parrott, the president of the Center on Budget and Policy Priorities, emphasized the need for policymakers to address the uneven trends in poverty levels.
Both presidential candidates have proposed expanding the child tax credit to provide more relief to low- and middle-income families. Economists argue that it is important to consider both the Supplemental Poverty Measure and the official poverty measures to fully understand the impact of economic policies on American households. Bradley Hardy, a distinguished professor at Georgetown University’s McCourt School of Public Policy, highlighted the value of discussing the different ways poverty is characterized in the United States.
Furthermore, the percentage of Americans with health insurance declined slightly in 2023, with 92 percent of the population having coverage. Approximately 26.4 million Americans, or 8 percent of the population, did not have health insurance. The data also revealed a drop in enrollment among Americans under 45, with 5.8 percent of Americans under 19 lacking health insurance coverage, up from 5.4 percent in 2022. This decrease in coverage was driven by a decline in employer coverage that was not offset by increases in Medicaid or Marketplace coverage for children, according to Jennifer Tolbert, the director of state health reform and deputy director of the program on Medicaid and uninsured at KFF.
Finally, it is worth noting that the female-to-male earnings ratio experienced a decline for the first time since 2003. While men who worked full-time for the entire year saw a 3 percent increase in real median earnings, women only recorded a 1.5 percent gain. This disparity highlights ongoing gender pay gaps in the United States.
