U.S. household income by age, gender, education and more

After the decline in wages caused by the COVID-19 pandemic in 2020, median household income rose back up in 2021.

One major factor that contributed to an increase in median household income, as noted by the U.S. Census Bureau, is the increase in full-time workers in 2021. There were 11.1 million more full-time, year-round workers in 2021 than in 2020, following the relaxing of COVID-19 restrictions.

However, the overall increase in household income doesn’t paint a full picture of the economic situation of the U.S. in 2021. Income inequality also rose by 1.2 percent, according to the Census Bureau — the greatest increase since 2011. When controlling for full-time, year-round workers and adjusting for inflation, workers’ real earnings decreased by 4.1 percent in 2021.

A Bankrate survey from January 2022 showed that only about 4 in 10 Americans had enough savings to cover a surprise expense of $1,000. The lack of a stable emergency fund has persisted for most Americans into 2022, with a more recent survey finding that 58 percent of Americans are concerned about how much they have in their emergency savings.

Median U.S. household income

Median household income is the amount brought in each year by all residents of a household ages 15 and over, according to the Census Bureau. It is a good measure of how families are doing financially and typically rises each year.

Real median household income is the yearly income adjusted for inflation. In this case, each real income amount is adjusted to 2021 dollars. While median household income rose in 2021 from the previous year, real median household income declined by $402, or about half a percentage point.

“Median” captures the middle number, indicating that half of all households earned more while half earned less.

While the national data captures the overall trend in income for all American households, age, gender, race, level of education and location all differently affect how much the average household earns.

Median income by state

Maryland, New Hampshire and New Jersey had the highest median household incomes of all the states, according to the Census Bureau. The median income in Washington D.C. was higher than every state but Maryland. The lowest state incomes were in Mississippi, West Virginia and Arkansas.

While the overall median income trended upwards year-over-year, several states faced a decrease in median household income. The largest decreases were in West Virginia (-9.88 percent) and Rhode Island (-6.48 percent). Meanwhile, the states with the largest increase in median income were Idaho (15.28 percent), Montana (14.55 percent) and Oklahoma (14.53 percent).

Median income by age

Median household income typically peaks when workers reach their 40s and 50s, when many are well established in their careers, and 2020 was no exception. Households with workers ages 45 to 54 brought in the most income, with a median $97,089. This was a 2.6 percent increase in real median income from the previous year.

U.S. workers usually see the biggest jump in income after age 24 and the biggest decrease as they approach retirement — ages 65 and older. In 2021, those between 15 and 24 years had a 5.2 percent increase in real median income. Meanwhile, those ages 55 and older faced the biggest decline in real median income, at -2.6 percent from the previous year. Workers aged 25-34 also had a -0.1 percent decline in real median income.

Median income by gender

Women continued to earn less than men in 2021. Women who worked full-time, year-round positions earned a median income of about $10,000 less than their male counterparts.

Back in 1973, working women earned 56.6 cents for every dollar that men earned, according to the Census Bureau. In 2020, the amount earned by women compared with men increased to about 83 cents for every dollar men earned.

Full-time working women have gained some ground toward earning an equal wage over time, but a significant gap between what men and women earn remains.

According to the Center for American Progress, here are a few reasons why gender can impact income:

• Caregiving, whether raising children or taking care of aging parents, can cause women to have fewer years of work experience.
• Caregiving can also force women into working fewer hours or only part time.
• Women often work in lower-paying jobs or industries.
• Women, especially women of color, historically have been discriminated against when it comes to pay.

Estimated median income by race

Race also plays a role in how much U.S. households bring in. Black and Hispanic households have historically been economically disadvantaged, due to a number of factors, including redlining and hiring discrimination. A Bankrate study from February 2022 also found that checking account fees hit Black and Hispanic households the hardest. Black households had the lowest and Hispanic households the second lowest median incomes in 2021.

Asian households had the highest median income, $101,418, according to the Census Bureau. This was a 1.8 percent increase in real median income from the previous year.

White households earned a median income of $74,262, down 1 percent from 2020. The median income for non-Hispanic white households was $77,999, a 1.2 percent decrease from the previous year.

Of all Hispanic households, the median income in 2021 was $57,981, a slight decrease (0.1 percent) from the previous year. Black households had the lowest median income in 2021, at $48,297, a 0.3 percent increase from 2020.

Average income by education level

Education plays a significant role in how much workers earn during the year and over the course of their careers.

In 2021, 91.1 percent of American adults ages 25 and older had completed high school, an increase of 0.2 percent from 2020, according to the Census Bureau. Only 37.9 percent of adults over 25 years old had a college degree in 2021, up 0.2 percent from the previous year.

U.S. workers with a bachelor’s degree or higher earned more than twice the income of those with only a high school education, according to Census Bureau data. Those with a college degree earned a median income of $115,456 in 2021, about 129 percent more than the $50,401 median income of those with only a high school diploma.

Having some college education increased median income by almost a third (27.7 percent) to $64,378.

Workers with a bachelor’s degree or higher had a median income that was about 280 percent more than those who didn’t finish high school.

Keeping up with inflation

Real median income for full-time, year-round workers decreased for the second year in a row in 2021, but many have recovered jobs since the peak of the COVID-19 pandemic. With inflation still at a significant high, it could be a good time to demonstrate your contributions to the workplace and ask for a pay raise.

Many have already done so — 61 percent of workers have gotten a pay raise or found a higher-paying job in the past year, according to a recent Bankrate study. However, the study also found that of that 61 percent, about half said their income has not kept up with rising consumer prices.

Bottom line

While median income increased by $2,774 in 2021, after a decrease during the height of the COVID-19 pandemic, it’s been lagging behind inflation — real median income decreased again, by $402.

Knowing what the average household makes is key to understanding the health of the U.S. economy and how well families navigate economic challenges, such as the pandemic and — more recently — a surge in inflation, raising the costs of housing, food and other household expenses.

Though some factors, such as the economy, are beyond workers’ control, Census Bureau data indicate that earning a college degree goes a long way toward boosting household income. Workers who have a bachelor’s degree or higher earn more than double the median income of those with only a high school diploma.

An income gap persists in terms of both gender and race. The median earnings of men were about $10,000 more than women. Black households had the lowest median income of any racial group, and despite efforts to support Black businesses, there was only a 0.3 percent increase in real median income for Black households in 2021.

Age is also a factor. Workers 45-54, the most productive period of workers’ lives, earn much more than those who are younger and older. Tucking away some of those earnings in a retirement plan, individual retirement account (IRA) or other savings vehicle can help households afford unexpected expenses in later years.

While inflation is high, it’s important to both focus on paying down debt and build an emergency fund. Paying off consumer debt can help you save by reducing how much you pay on interest in the long run. It’s also important to fortify your emergency savings — with the potential for a recession, having emergency savings can help ensure stability and peace of mind.

Staff writer Matthew Goldberg contributed to a previous version of this article.