Income is up in 2024
According to the Census Bureau, real median pre-tax household income reached $80,610 in 2023 — up 4% since 2022, when real median household income was $77,540. Post-tax income also increased, albeit by a slightly smaller margin. The real median post-tax household income jumped 3.7% from $66,800 in 2022 to $69,240 in 2023.
The good news is that household income increased at all income levels. It wasn't just high earners getting big salary boosts. Earnings increased 6.7% for those in the 10th percentile and 4.6% for those in the 90th percentile. But, only White and non-Hispanic White Americans saw a significant income increase, while Black, Asian and Hispanic households didn’t experience much of a change.
With some Americans doing a little better and some staying relatively the same, overall income inequality didn't noticeably increase between 2022 and 2023. But, the female-to-male earnings ratio decreased during this period to 82.7% from 84% in 2022 — the first substantial decrease since 2003.
In response to the news, President Joe Biden released a statement indicating "we are making real progress growing the middle class, with incomes up more than $3,000."
Though incomes have increased, there are still many Americans who aren’t making enough to live comfortably.
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Read MoreWhat can you do if you're falling behind?
While it's great news that Americans are seeing rises in income, this doesn't mean every American is now earning a middle-class living. In fact, we're far from it, with 36.8 million people reportedly living in poverty in 2023.
If your earnings are below the median, or below where you'd like them to be, there are some things you can do to try to improve your finances. Here are a few techniques:
- Look for new job opportunities. If your current job isn't paying as much as you'd like, explore what else is out there. It may be time to see what the industry standard is for your role and find a better-paying position.
- Negotiate your salary. If you haven't received a raise recently, or if you feel like your job duties have expanded or your performance has improved, it's worth asking your company to pay you more.
- Develop additional skills. The more talents and abilities you have, the more opportunity there is to get paid for them. Look into certification programs, coursework or job training to develop your skills.
- Start a side hustle. Moonlighting at another job can help you increase your earnings — and perhaps even help you find a new full-time career that pays better if all goes well.
It's also important to remember that you can be a financial success even without a big income. It's what you do with your money that counts. So, exploring other avenues like opening a brokerage account and investing as much as you can to build a more secure future is something to consider. This will set you up for success even if your income is below the median since you'll be using your hard-earned money to grow your wealth over time.
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