Median Household Income In 2019 Increases 8.1% To An All Time High
The Census Bureau released the official income statistics for 2019 a few weeks ago. In 2019 the median household income in America was $69,560, marking a substantial 8.1% increase from the 2018 median of $64,324.
As a comparison, the official CPI inflation rate for 2019 was 2.3%. The inflation rate was the highest in 9 years, but the significant increase in household incomes basically tripled it.
For clarification, this is for calendar year 2019 and all pre-COVID.
The Census report was full of great news, so let’s take a look. From their report:
- The 2019 real median incomes of family households and nonfamily households increased 7.3 percent and 6.2 percent from their respective 2018 estimates. This is the fifth consecutive annual increase in median household income for family households, and the second consecutive increase for nonfamily households.
- The 2019 real median incomes of White, Black, Asian, and Hispanic households all increased from their 2018 medians.
- Real median household incomes increased for all regions in 2019; 6.8 percent in the Northeast, 4.8 percent in the Midwest, 6.1 percent in the South, and 7.0 percent in the West.
This report shows how strong the economy was moving before COVID-19 came along and delivered a sucker punch early this year. I know what you’re thinking, where are the maps AF? Let’s do it!
The Maps
After running the data through my supernatural magic-alicious mapping machine, this is what it looks like by state (click for larger version):
My post from last year shows the data and map from 2018. Of note, the District of Columbia eclipsed a median household income of $90,000, the first time in history this has happened. On the other end of the spectrum, three states failed to reach $50,000 – Mississippi, Arkansas, and West Virginia .
To show which direction things are going for each state, I calculated the percent change from 2018 to 2019 and mapped that as well (click for larger version).
The three states with the highest percentage increase from 2018 – 2019 (inflation adjusted) are:
- West Virginia: 10.8%
- Rhode Island: 10.6%
- New Mexico: 10.1%
The three states with the lowest percentage increase from 2018 – 2019 (inflation adjusted) are:
- North Dakota: 1.2%
- Alaska: 1.5%
- Mississippi: 2.4%
Analysis
Pretty interesting map huh?
Looking at the map it seems that the brunch belt, which is the high income corridor from Washington D.C. to Massachusetts in the Northeast, did not fare as well as it usually does. Sure the median household incomes of those states are still high, but their increases from 2018 are not as good as they normally are and below the U.S. average for many.
Iowa also stands out in the Midwest corn belt as an anomaly. Iowa’s below average increase of only 2.9% is well below all of it’s surrounding neighbors by a good margin.
The low increase in North Dakota is likely a continuing remnant of the fall of the oil boom that bolstered their economy for years. And West Virginia’s strong increase of 10.8% is great news for that state, but their median household income is still in the bottom three at $48,850.
More Great News
To me the best news from the Census report is about the poverty rate. From the report:
- The official poverty rate in 2019 was 10.5 percent, down 1.3 percentage points from 11.8 percent in 2018. This is the fifth consecutive annual decline in poverty. Since 2014, the poverty rate has fallen 4.3 percentage points, from 14.8 percent to 10.5 percent.
- The 2019 poverty rate of 10.5 percent is the lowest rate observed since estimates were initially published in 1959.
That’s just awesome – the lowest poverty rate since 1959!
Again, this is 2019 and pre-COVID. Next years report about the calendar year 2020 will no doubt see very different numbers and trends. It’s actually kind of sad to see the data about how great things were progressing before the pandemic came and derailed it.
I hope you found these data and maps interesting and you can count on me to continue to show money on the map going forward.
It is shocking and saddening to see what a pathogen a few microns long did to such an amazing economy. It truly felt like we were in a boon and then it got shattered because of the pandemic. Hopefully it can recover soon and get back to the former trajectory
Stupid effing virus. Who knows how long it’ll take to get back on that trajectory, or if we ever will…
I wonder how much of this is measurement error or subtle procedure changes. The estimated error was up in the report, but not enough to account for the KS changes.
As a KS resident in a college town, think low median income with the students, I didn’t see much evidence to back up an increase like that. The local sales tax revenues didn’t increase very much last year, and the increase was all in the last three months, sales tax revenue was down in the beginning of the year. Farm commodities prices were down last year with the trade war and the 737MAX mess slowed the aviation sector in Wichita.
I have a hard time believing that a 25% increase in income was mostly saved and not spent.
There have been accusations of shenanigans in the main census, is it also in these numbers?
What data is available to cross check this? Sales tax revenue, state income tax statistics, does the IRS release state by state stats?
First off – THANK YOU for your comment with detailed knowledge about Kansas. It prompted me to have a relook at my data source and sure enough, I found that I was steered wrong. Bottom line, I’ve relied on a site called Statista which is a very reputable site to sometimes get government data, since government sites like the Census and the BLS are so horribly designed and cumbersome. Statista published this, which is what I used. Well, it’s wrong. Ugh.
So I just went and got the raw Census data (which is very hard to actually get because their websites SUCK) and updated the maps and the post. It’s quite different. Kansas has a much more moderate increase of 6.6% which is right in line with the U.S. average. I’ll make a note in the future of being wary of Statista – they’re normally very good and they cite the Census as a source for that data but their numbers are mostly inflated. Perhaps they confused ‘average’ with ‘median’ and posted them incorrectly as averages are always higher.
As for shenanigans, I don’t believe that stuff happens at Census or BLS etc. Mistakes maybe – sure. But I know many folks at those agencies and they’re of all political persuasions. If there was any attempt to cook numbers it would be impossible to keep someone from blowing the whistle. Lastly, I do not believe the IRS is allowed to release real income data reported from taxes. The official Census data is done by exhaustive surveying and is the gold standard and has been for a long long time.
Good you found where the data got messed up. Is last year’s data OK, or was that messed up also?
The post now says “only one state, Mississippi, Arkansas, and West Virginia failed to reach $50,000.” Did you forget to change that to three?
I don’t know if other states report this or not, but KS reports taxable sales totals by county for the year at https://www.ksrevenue.org/prsalesreports.html under Monthly State Sales Tax by County. It’s the last column in the yearly spreadsheets. The state has a base rate and each county and city can add to that, so revenues don’t mean much because there are lots of rates to change. But the state reports the total taxable sales, which can be compared year to year. Do other states report that? That might be interesting to compare to these income statistics.
Taxable Sales 2018 $42,732,254,934
Taxable Sales 2019 $43,732,516,024
Multiplying the 2018 by 1.023 to adjust for inflation gives $43,715,096,798 which accounts for pretty much all of the increase. So if the median income increased 6.6%, then other incomes must have decreased, or folks saved, or there is another mistake somewhere. Food and clothing are not exempt from sales tax in KS.
The State of KS fiscal year is offset six months. State of KS employees got a 2.5% raise the second half of 2017/first half of 2018, then another 2.5% through the middle of 2019. This was the first raise in a number of years due to budget shortfalls during the Brownback tax cut experiment. Then nothing in the 2nd half of 2019. So the State pay raises aren’t close to 6.6% for 2019. The minimum wage in KS is $7.25 since the last increase in 2010.
I’m still skeptical about a true 6.6% median wage increase.
Last years’s data is good. In the past year the Census bureau revamped their data website, and in an attempt to make it more slick they also made it much more difficult to actually get data (vice just view it). So I started to rely on Statista and others to do it for me. I’ll be sure to check sources now from the original.
Very interesting about the reporting of sales tax collection in KS, not really sure if any other states do that and would be a monumental task to look into. I don’t think it’s far fetched that people have saved some of the increase – when things are going well some folks (not all for sure) save more. Savings rates are way up this year of course but this post is about 2019. But your skepticism is warranted because in the end the official income data of the U.S. is survey data. As mentioned the IRS is not allowed to disclose real data. Heck, the Census itself is done by a survey as we all hopefully submitted this year. The final count of 330 million-ish people in the U.S. will have a significant error margin in the millions. But like the income data it’ll be the best number we have.
I’m curious how much of the increases over the last five years was from economic pressure vs. states increasing the minimum wage. Obviously they both have their influence, but would be interesting to see roughly how much of the increases was from legislated increases in minimum wages. https://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx
Good point and that’d be impossible to find out. But it would be interesting to try to cross reference minimum wage changes to % increases.
Always interesting and certainly some good news here. Great news on the case of the poverty level alone. It will be even more interesting to see your post on this topic same time next year.
Yes, next years post will be very interesting, with a lot of negatives I’m assuming
I wonder what it’ll look like for 2020. It’ll be telling to see where people came through the pandemic better.
The new all time high in 2019 was nice.
I suspect the number of states with a positive increase in next years report will be few I hope to be wrong
nice maps as always, dude. the mrs. and i should probably move to vermont. i can get along with those people.
Vermont is up there on my list of retirement states, or at least state where I’d love to own some land or a cabin.
I find it fascinating how much income varies across the different States. You’d think these disparities between states would work out to be smaller… i.e. workers would move if income was higher elsewhere, and the demand for labor would smooth out the numbers a bit.
But the disparities between States remain. In some cases some of the highest and lowest household incomes are only a state away (as in the case of West Virginia and Maryland).
Me too – geography is the most fascinating of the sciences. As for West Virginia and Maryland, they do border each other as you stated. But…. thats only the western panhandle of MD touching WV. That part of MD is poor too. Marylands wealth comes SOLELY from the DC suburbs, pretty far from WV. West Virginia’s poverty comes from the white, rural, “appalachia” residents who mostly live in old coal mine towns and places where manufacturing has moved out.
I don’t know how accurate I could have been if I had to make gueses at the trends that these maps reveal. Very interesting!
NOT trying to make happy news sad: do you know if poverty income levels lagging, maintaining, or surpassing median household income increases? In other words, if poverty income level has been say $12K for the last 10 years with only minor adjustments, that’d explain why poverty is decreasing in a nation where median income increases outpace poverty level increases (as a relative comparison).
I’m really not sure what to make of WVA. Awesome. Always see loads of new wind turbines on drives out to Davis and Canaan Valley; hopefully that’s the sort of thing driving it!
Poverty levels are adjusted every year by the Census Bureau. What they can’t do of course is make locality differences for every place in America, so a poverty level in NYC is obviously different than one in rural Tennessee. And WV is a beautiful state, it’s a shame so much of the former economy was built on coal mining. I definitely support it with my outdoor tourism dollars.