Has Median Household Income Kept Up With Inflation?

Last week I did a short post showing the official median household income data for 2021 as a whole and by state.  I started doing posts like that in 2017, and since inflation is the topic on everyone’s mind I decided to run some numbers. 

According to the official CPI inflation numbers used by the government, total inflation from December 2017 to December 2021 is 13.09%. 

 

So I decided to take the 2017 median household income data and multiply it by 13.09%, then compare it to the 2021 data.  This would show which states respective median household incomes have been keeping up with inflation over that 4 year period and which have not. 

So let’s get to the results!

 

2021 Vs. Inflation-Adjusted 2017

Here is the map for the 2017 median household income data that I did about 4 years ago. (click for a larger version)

*Note: I mistakenly forgot to put the word “household” in the title, but the data are for households and not individuals

 

In hindsight those green hues I used back then are a bit too bright. Sorry for zapping your eyes, haha. 

Back to the matter at hand, I simply took those numbers and added 13.09%.  So this is what each states median household income “should” be in 2021 if it kept up with inflation exactly during that four year time period. (click for a larger version)

 

And as a reminder, here’s the actual 2021 median household income by state from my post last week. 

 

 

Given those two sets of numbers I just did some simple maths and made another map of the differences.  And here’s the result: 

 

 

This was a hard map to title.  So any state in a shade of blue has seen it’s median household income rise faster than inflation from 2017 – 2021.  Any state in red has seen it’s median household income lag behind inflation for the same period. 

The dollar amount in each state shows the amount that it either beat or lagged behind it’s 2017 inflation adjusted number (again, that’s the 2017 median household income + 13.09%)

It turns out that in 12 states and the District of Columbia the median household income did not keep up with inflation from 2017 – 2021, and in 38 states it did. 

As for the U.S. aggregate, the median household income in 2017 was $61,372.  If you add 13.09% inflation (from 2017-2021) onto that you get $69,406.  The actual median household income in 2021 however was slightly higher at $70,704.

 

Trends?

The first thing I noticed from the final map is that the richer states with big massive urban centers such as those in the brunch belt have been mostly losers.  And most mountain states such as Idaho, Utah, and Oregon have been big winners.  Midwestern states except for North Dakota have also been big winners. 

A lot of this can be explained by the flight from urban areas to more remote and low cost of living locales during covid.  It wasn’t just a small trend that made news headlines, it really happened.  If you really want to geek out on data and maps about this, Bloomberg went above and beyond in this article.

In other cases some bribery has probably had an effect – Vermont and Maine were both paying handsome amounts of money to people if they moved there.  And consider that people who can work remotely mostly have higher paying white collar jobs.  

As mentioned mountain states with beautiful scenery saw population gains during covid.  If you can suddenly work wherever you want many would choose the mountains over an urban jungle.  These folks are smart in my book 🙂 

Six states exceeded their 2017 inflation-adjusted median household income by more than $10,000 – Oregon, Idaho, Utah, Kansas, Nebraska, and Vermont.  South Dakota missed by on $27.  There are many articles out there explaining some of these big gains, but any specific info from readers are welcome in the comments.

 

Is Inflation Winning?

So there you have it readers.  Simple analysis of the official government income data suggests that even though inflation is high, median household incomes for the country as a whole and in many states are keeping up with it and quite a few are surpassing it handsomely.  Of course that doesn’t discount the 12 states and Washington D.C. where incomes have not kept up and where people are surely feeling the pinch. 

Comments are welcome but keep them civil as I realize anything that goes against the grain these days tends to send a certain part of the population off into a rage and elicits bullying behavior.  I’m just reporting the data here and have no point to prove.  And if you see any flaws in my simple math please let me know as I did these maps pretty quickly.