- The median income of the American family increased by 7% in inflation-adjusted terms between 2021 and 2024. But this masked significant differences between income brackets.
- The average real income of families in the top 10% of earners fell 14%, from $757,000 to $652,000 (both figures in 2025 dollars).
- This implies, contrary to the popular idea about the K-shaped economy, that income inequality has declined in the post-pandemic period.
Yes, but: The wealth story is very different. Families that were already wealthy – and who tend to own stocks, homes and other assets – became much wealthier between 2022 and 2025.
- Among families in the top 10% of income earners, median net worth increased by 31% between 2022 and 2025, compared to a 2% increase in net worth for the median family.
- Families in the bottom 40% of income earners actually saw their net worth decline slightly over this period.
The plot: Data from the Survey of Consumer Finances is collected and published every three years. Friday morning’s release is for the 2025 survey, but the income questions cover the previous calendar year.
- As such, the revenue figures compare 2024 to 2021, which conveniently reflects the change between the start of the Biden administration and its nearing end.
Between the lines: Although the compression of income inequality observed in this data may seem surprising, it is consistent with other evidence that blue-collar workers experienced larger increases during the extremely tight labor market and inflationary episode of 2021 and 2022 than white-collar workers with higher incomes.
- Additionally, in a footnote, Fed researchers note that high earners tend to receive income from volatile sources, primarily capital gains and business income.
- Large variations in these sources of income among the highest earners can create disproportionate movements in the averages.
Please note: The survey also sheds light on how the Fed’s aggressive interest rate hikes in 2022 and 2023, meant to keep inflation in check, have hammered borrowers.
- The median debt repayment-to-income ratio increased by 2 percentage points between 2022 and 2025, to 15.4%.
- The share of families with a debt repayment-to-income ratio above 40%, a threshold for high debt, increased from 6.5% to 8.6%, reaching a level last seen in the 2013 survey.
The bottom line: Amid post-pandemic inflation, low incomes have seen their purchasing power increase more in percentage terms than high incomes – but the rich have become much richer at the same time.
Gn bussni
