Median income rose to $80,610 in 2023

By Tami Luhby, CNN

(CNN) — Americans’ incomes have finally returned to their pre-pandemic peak.

Median household income rose to $80,610 in 2023, essentially the same as it was in 2019, the Census Bureau reported Tuesday.

The typical household’s income rose 4% from 2022, driven primarily by an increase in workers’ earnings. This was the first statistically significant annual increase in inflation-adjusted median household income since 2019, the Census Bureau said.

“This is the firmest evidence yet that income growth outpaced inflation for ordinary households in 2023,” said Arloc Sherman, vice president for data analysis and research at the left-leaning Center on Budget and Policy Priorities.

Americans’ finances are a key talking point in this year’s presidential election. Former President Donald Trump argues that people were better off in his first term and have suffered from the spike in prices in recent years. Vice President Kamala Harris has stressed that she will focus on strengthening the middle class and has released proposals that aim to reduce people’s cost of living.

There were widespread gains across the income ladder, though income inequality did not change significantly between 2022 and 2023.

However, the inflation-adjusted median earnings for men who worked full time, year-round increased 3% – twice the rate for women. That contributed to the female-to-male earnings ratio falling to 82.7% last year, down from 84% the year before. It was the first statistically significant annual decline in the ratio since 2003.

Changes in the poverty rate

The official poverty measure fell to 11.1% in 2023, down 0.4 percentage points from the year before. There were 36.8 million people in poverty, essentially the same as the prior year.

But the supplemental poverty measure – which takes into account taxes paid, tax credits and noncash assistance, among other metrics – rose to 12.9%, up 0.5 percentage points from 2022.

The split between the two measures was primarily driven by the differences in the way the Census Bureau annually updates the poverty thresholds, or the definition of basic needs, for each measure. The continued high inflation for housing costs in 2023 contributed to the increase in the supplemental measure.

The supplemental poverty measure has been closely watched in recent years because it showed the impact of many federal Covid-19 pandemic relief programs. The poverty rate for children fell by nearly half to 5.2% in 2021, in large part because of the one-year enhancement to the child tax credit. However, the rate returned the following year to 12.4%, roughly where it was prior to the pandemic. Last year, it increased to 13.7%.

Expanding the child tax credit is in the spotlight in this year’s presidential campaign. Harris has proposed restoring the pandemic enhancement, which provided as much as $3,600 per kid, as well as creating a $6,000 credit for newborns. Trump’s running mate, Sen. JD Vance, has said he’d like to increase the credit to $5,000 per child.

Meanwhile, the uninsured rate was 8% in 2023, roughly the same as last year and near historic lows. The share of people with employment-based health insurance coverage fell 0.7 percentage points to 53.7% last year.

The uninsured rate is expected to rise this year, in part because a pandemic-era law that barred states from disenrolling Medicaid recipients thought to no longer be eligible expired in April 2023.

Separately, a record 20.8 million people were enrolled in Affordable Care Act policies as of February, the Biden administration announced Tuesday. Interest in Obamacare plans has surged in recent years, driven in part by a temporary enhancement to the federal premium subsidies that congressional Democrats enacted when they controlled Capitol Hill. That boost is set to expire at the end of 2025.

Nearly 50 million people have been covered by policies purchased through the Affordable Care Act exchanges since the program began in 2014, the administration said.

This story has been updated with additional information.

The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.