Richest 20% of Households Control 52% of Household Income

One way to examine incomes in the United States is to divide up the nation's 130 million households into five groups (or quintiles) of equal size based on their annual household income. The Census Bureau does this each year using data from the Current Population Survey. The Census Bureau also tracks the lower income limit of the top 5 percent of households. Here are the results for 2020...

Income bracket of each quintile of households, 2020

Bottom quintile:   $27,026 or less

Second quintile:  $27,027 to $52,179

Third quintile:      $52,180 to $85,076

Fourth quintile:    $85,077 to $141,110

Highest quintile:  $141,111 or more

Top 5 percent:     $273,739 or more

Over the decades, the share of aggregate household income accruing to each of the lower four quintiles has fallen, while the share accruing to the highest quintile has grown. Take a look...

Share of aggregate household income accruing to each quintile in 2020 (and 2000)

Bottom quintile:     3.0% (3.6%)

Second quintile:    8.1% (8.9%)

Third quintile:      14.0% (14.8%)

Fourth quintile:    22.6% (23.0%)

Highest quintile:  52.2% (49.8%)

The richest one-fifth of households controlled 52 percent of all household income in the United States in 2020. Fifty years ago in 1970, the richest one-fifth of households controlled a smaller 43 percent of total household income. The highest quintile surpassed the 50 percent threshold for the first time in 2001 and has consistently controlled the majority since 2008.

Source: Demo Memo analysis of the Census Bureau's Historical Income Tables: Income Inequality

Median Household Income Falls in November 2019

Median household income fell between October and November 2019, after adjusting for inflation. The $66,043 November median was 0.9 percent below the October 2019 median, according to Sentier Research. "The relatively large increase in inflation last month (0.3 percent), following a comparable increase the month before, had a negative effect on real median annual household income," reports Sentier. The Sentier estimates are derived from the Census Bureau's Current Population Survey and track the economic wellbeing of households on a monthly basis.

Despite the recent dip, "real median household income has continued to display an upward trend over the past 12 months (up 1.9 percent)," says Sentier's Gordon Green, "and especially since the low point reached in June 2011 (up 17.5 percent)." At the June 2011 low point—two years after the official end of the Great Recession— median household income was just $56,185.  

Sentier's Household Income Index for November 2019 was 106.2 (January 2000 = 100.0). In other words, the November 2019 median, after adjusting for inflation, was just 6.2 percent higher than the median of January 2000—almost two decades ago. To stay on top of these trends, look for the next monthly update from Sentier.

Source: Sentier Research, Household Income Trends: November 2019

Median Household Income Rises in November 2018

Median household income in November 2018 climbed to $63,554, reports Sentier Research. This is the highest median recorded by Sentier since the January 2000 start of its monthly household income series. The November 2018 median was 3.2 percent higher than the November 2017 median, after adjusting for inflation. Sentier's estimates are derived from the Census Bureau's Current Population Survey and track the economic wellbeing of households on a monthly basis. 

"We are at a point now where real median household income is 4.3 percent higher than January 2000, the beginning of this statistical series," reports Sentier's Gordon Green. "Not an impressive performance by any means over a period spanning almost two decades, but the trend line has been positive for about seven years." More impressive is the 15.4 percent rise in median household income since the post-Great Recession low reached in June 2011—two years after the official end of the Great Recession.

Sentier's Household Income Index in November 2018 was 104.3 (January 2000 = 100.0). To stay on top of these trends, look for the next monthly update from Sentier.

Source: Sentier Research, Household Income Trends: November 2018

Does Delayed Retirement Increase Inequality?

With defined-benefit pensions a thing of the past for most retirees, many older Americans are working longer to allow their retirement savings and Social Security benefits to grow. But will the rising labor force participation of older Americans result in greater income inequality? It already is, according to an analysis by Richard W. Johnson of the Urban Institute. His study examines the growing economic polarization between older Americans healthy enough to delay retirement and continue to work and older Americans whose poor health prevents them from working longer.

Analyzing data from the Health and Retirement Study, a longitudinal survey of Americans aged 50 or older, Johnson's analysis compared the health and economic status of people aged 63 to 65 in 2014 with their counterparts in 1996. Over the time period, the health of people in their early sixties worsened...

• A larger share of 63-to-65-year-olds reported having health-related work limitations in 2014 (31.8 percent) than in 1996 (28.5 percent).
• The trend is most pronounced among the least educated—those who never attended college. Among 63-to-65-year-olds who never attended college, 42.3 percent had health-related work limitations in 2014, up from 33.6 percent in 1996. 
• Among 63-to-65-year-olds who had attended college, 25.5 percent had health-related work limitations, up from 19.6 percent in 1996.

Older Americans with health-related work limitations are falling behind as the healthy work longer and add to their retirement incomes, Johnson finds. Between 1996 and 2014, he says, gains in real, median household income among people in their early sixties were limited to those in robust health. "As older adults have delayed retirement and worked longer, the impact of health status in late working life on retirement income has grown," Johnson concludes. "These finding are particularly concerning as evidence mounts that health status at midlife and older ages is worsening and health disparities by income and education are growing."

Source: Urban Institute, Delayed Retirement and the Growth in Income Inequality at Older Ages