Inequality in America has become a major talking point in recent years. For many people though, the concept of inequality – the idea that wealth is spread very thinly at the lower end of the socioeconomic ladder – is still an abstract concept.
There are over 125 million households in the United States, each with their own unique structure and financial situation, so understanding such a complex issue requires reducing it to proportions we can understand.
American Households as a Neighborhood
In the visualization above, American households are distilled down into 100 homes, then color-coded into $25,000 income increments.
One house is allocated for those making $300,000 and more per year. On the other end of the scale, we can see that 24 of the households earn $25,000 per year or less, and nearly half of the households have an annual income lower than $50,000.
Here is a more granular breakdown of numbers, this time from a slightly different data source (U.S. Census Bureau’s 2017 Household Income Survey):
|Income Bracket||Households (Millions)||Share of Total|
|Less than $15,000||14.1||11.2%|
|$15,000 – $24,999||12.1||9.6%|
|$25,000 – $34,999||11.9||9.4%|
|$35,000 – $49,999||16.3||12.9%|
|$50,000 – $74,999||21.5||17.0%|
|$75,000 – $99,999||15.5||12.3%|
|$100,000 – $149,999||17.8||14.1%|
|$150,000 – $199,999||8.3||6.6%|
|$200,000 and up||8.8||7.0%|
Households between $35,000 and $100,000 are generally considered middle class. That said, the geographical location of where a household is located also makes a big difference.
The Power of Place
Not surprisingly, cost of living strongly influences your household’s place on the income spectrum.
In El Paso, Texas, a $50,000 income places a household of four people in the middle class. However, in a more expensive metro area, like San Diego, that same income lands your household in a lower income tier. Here’s a closer look at the cost of typical expenses in the two metros:
|Expense||El Paso, TX||San Diego, CA||Cost difference|
|Home price||$239,285.67||$755,273.67||⬆︎ 216%|
|Apartment rent||$945.92||$1,961.55||⬆︎ 107%|
|Energy cost||$133.53||$213.96||⬆︎ 60%|
|Dentist visit||$89.08||$104.25||⬆︎ 17%|
The median household income in the U.S. continues setting new monthly records, and we’ve just seen this decade’s largest year-over-year increase in individual wages.
One side effect of this economic growth is that households in the top wage bracket – the well-appointed yellow square in our visualization – have a tendency to reap outsized rewards. So, for now, as America’s economy trends upward, so does its Gini Coefficient.