The surprising post-pandemic drop in income inequality

Axios · 10/9/2026, 3:58:05 PM

Data: Federal Reserve Survey of Consumer Finances; Chart: Neil Irwin/Axios Middle- and lower-earners' inflation-adjusted incomes rose during the Biden years — but high earners saw their incomes fall. That's a surprising finding from one of the most thorough datasets on American household finances , released Friday morning by the Federal Reserve. Why it matters: The data sheds granular new information on a much-contested question: What happened to Americans' real incomes during the post-pandemic period? It featured an exceptionally tight job market and the highest inflation in decades, followed by aggressive Fed rate hikes. The median American family's income rose 7% in inflation-adjusted terms between 2021 and 2024. But that masked significant differences among income brackets. The average real income of families in the top 10% of earners fell 14%, to $652,000 from $757,000 (both figures are 2025 dollars). That implies, contrary to a common narrative about the K-shaped economy, that income inequality fell during the post-pandemic period. Yes, but: The story for wealth is very different. Families that were already wealthy — and tend to own stocks, houses and other assets — became much richer from 2022 to 2025. Among families in the top 10% of income, median net worth rose a whopping 31% from 2022 to 2025, compared with a 2% rise in net worth for the median family. Families in the bottom 40% of income actually saw their net worth decline slightly in that span. The intrigue: The data, from the Survey of Consumer Finances, is collected and released every three years. Friday morning's release is the 2025 survey — but questions about income cover the preceding calendar year. As such, the income numbers compare 2024 with 2021 — conveniently capturing the change from the early part of the Biden administration to near its end. Between the lines: While the compression in income inequality seen in this data may seem surprising, it aligns with other evidence that blue-collar wo