The Gini index, which ranges from 0 to 1, where 0 represents total income equality, rose 1.2% to 0.494 in 2021, the Census Bureau reported Tuesday. The increase was driven primarily by a measurable decline in the overall inflation-adjusted earnings of the poorest 10% of American households, with the richest 10% seeing no statistically significant changes in their overall income.
The poorest 10% of households saw their real incomes decline to $15,660 at most in 2021, almost 4.5% less than they made in 2020, according to the Census Bureau. The richest 10% of households made 13.53 times as much, making at least $211,956, up from 12.9 times as much in 2020.
US Wages increased 5.2% over the last year while consumer prices (CPI) rose 8.5%. How are Americans still spending given this enormous gap?
They’re saving less (savings rate at lowest level since 2009) and borrowing more (consumer credit increasing at fastest pace since 2011). pic.twitter.com/FhY1GJS6Jv
— Charlie Bilello (@charliebilello) September 8, 2022
The overall income of households was stagnant in 2021, with a statistically insignificant decrease in median income by 0.6% to $70,784, according to the Census Bureau. The only group to see a statistically significant increase in income was those who attained a Bachelor’s degree or higher, seeing a 2.7% increase in median income to $115,456.
Foreign-born householders saw a statistically insignificant 1.5% increase in income, while native-born householders saw a statistically significant decrease of 1.4% in income. Family households held relatively steady while nonfamily households saw a decrease of -1.9% to $41,797.
Poverty levels rose slightly in 2021 to 11.6%, up from 11.4% in 2020, though the increase was not statistically significant, according to the Census Bureau. Prior to 2020, the poverty rate had fallen for five straight years.
Declining income for the poorest Americans coincides with historically high increases to the price of food, rent and utilities. Food prices, in particular, have increased at 40-year highs for seven months running, prompting some consumers to trade out traditional grocery stores for dollar stores.
The cost of rent nationwide was up 6.7% year-on-year in August, according to the Bureau of Labor Statistics. However, rent for a single family houses increased at a rate of 13.4% to an average of $2,495 in 2021, which, combined with soaring property values, has hindered the ability of families to purchase homes, according to CNBC