Equity, Diversity and Inclusion

The one chart you need to understand how income is distributed in the US  

pandemic US America income distribution

Just as the pandemic had an impact on income distribution, rising inflation and interest rates are now tightening budgets for many households. Image: Unsplash/Rowan Heuvel

Avery Koop
Author, Visual Capitalist
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United States

  • This visualization reimagines US Census Bureau data as a neigbourhood of 100 homes and groups the households by income brackets.
  • Out of the homes, 38 could be considered low income, 44 middle income and 18 high income.
  • Nearly 20% of all American households earn between $25,000 and $49,900 a year.
  • Just as the pandemic had an impact on income distribution, rising inflation and interest rates are now tightening budgets for many households.
A visualization of household income distribution in America.
America's household income distribution visualized as 100 homes. Image: Visual Capitalist

Household income distribution in the U.S. visualized as 100 homes

Income inequality and wealth disparity have been frequent topics of conversation, even before the pandemic upended the economy.

Now, rising inflation and interest rates, and a possible recession on the horizon are bringing these societal divides into sharp focus.

In the above visualization, U.S. households are parsed out into a neighborhood of 100 homes and then grouped by income brackets, using recent data from the U.S. Census Bureau.

The neighborhood breakdown

American households vary widely on their respective incomes. The largest cluster of homes, representing nearly 20% of all American households, are in the $25-$49.9k income bracket.

Here’s a look at the share of households in each income bracket and the number of homes they represent.

A table showing the share of U.S. households in each income distribution bracket and the number of homes they represent.
20% of Americans are in the $25-$49.9k income distribution bracket. Image: Visual Capitalist

In our hypothetical neighborhood, 18 of the households are in the lowest income bracket. People in this category have a wide variety of jobs, but personal care aides, cashiers, food and beverage positions are some of the most common. As a point of reference, the poverty line for a family of four currently sits at $26,496.

On the flip side, in this small community of 100 houses, 33 earn six figures and typically have at least one family member in a corporate or medical role.

The American middle class

The middle class in America has shrunk significantly in the past 50 years, going from 61% of adults being middle income in 1971 to 50% in 2021.

Here’s a look at the economic class breakdowns by annual household income, based on households with three people (Note: the average U.S. household has 2.6 people):

  • Upper class: >$156,000
  • Middle class: $52,000-$156,000
  • Lower class: <$52,000

Although these definitions and conditions don’t align exactly with the buckets we use in the main houses visualization, they come pretty close.

In the neighborhood of 100 homes, 38 homes could be considered low income, while 18 are high income. Meanwhile, sitting in the $50-149.9k middle range of household income are 44 homes.

The larger trends on income distribution

The pandemic had an extremely adverse impact on earnings and income worldwide, and the U.S. was no exception.

Median household income decreased 2.9% to $67.5k between 2019 and 2020, the first decrease since 2014. Additionally, the number of people who worked full-time jobs, year-round decreased by around 13.7 million.

That said, when looking at the longer-term trend, the median income for those considered middle class has jumped by 50% over the last five decades. Here’s a look at the median incomes in each economic class in 1970 vs. 2020:

median income distribution
Income distribution in America: Income for those considered middle class has jumped by 50% over the last five decades. Image: Visual Capitalist

With a recession⁠ highly likely to occur in the U.S., and rising inflation causing increases in the cost of basic, everyday goods, budgets may get tighter for many households in America, and incomes are likely to be impacted as well.

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Equity, Diversity and InclusionFinancial and Monetary Systems
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