Household Income Distribution in the US Visualized as 100 Homes – Visual Capitalist

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Income inequality and wealth disparity have been frequent topics of conversation, even before the pandemic upended the economy.
Now, rising inflation and interest rates, and a possible recession on the horizon are bringing these societal divides into sharp focus.
In the above visualization, U.S. households are parsed out into a neighborhood of 100 homes and then grouped by income brackets, using recent data from the U.S. Census Bureau.
American households vary widely on their respective incomes. The largest cluster of homes, representing nearly 20% of all American households, are in the $25-$49.9k income bracket.
Here’s a look at the share of households in each income bracket and the number of homes they represent.
In our hypothetical neighborhood, 18 of the households are in the lowest income bracket. People in this category have a wide variety of jobs, but personal care aides, cashiers, food and beverage positions are some of the most common. As a point of reference, the poverty line for a family of four currently sits at $26,496.
On the flip side, in this small community of 100 houses, 33 earn six figures and typically have at least one family member in a corporate or medical role.
The middle class in America has shrunk significantly in the past 50 years, going from 61% of adults being middle income in 1971 to 50% in 2021.
Here’s a look at the economic class breakdowns by annual household income, based on households with three people (Note: the average U.S. household has 2.6 people):
Although these definitions and conditions don’t align exactly with the buckets we use in the main houses visualization, they come pretty close.
In the neighborhood of 100 homes, 38 homes could be considered low income, while 18 are high income. Meanwhile, sitting in the $50-149.9k middle range of household income are 44 homes.
The pandemic had an extremely adverse impact on earnings and income worldwide, and the U.S. was no exception.
Median household income decreased 2.9% to $67.5k between 2019 and 2020, the first decrease since 2014. Additionally, the number of people who worked full-time jobs, year-round decreased by around 13.7 million.
That said, when looking at the longer-term trend, the median income for those considered middle class has jumped by 50% over the last five decades. Here’s a look at the median incomes in each economic class in 1970 vs. 2020:
With a recession⁠ highly likely to occur in the U.S., and rising inflation causing increases in the cost of basic, everyday goods, budgets may get tighter for many households in America, and incomes are likely to be impacted as well.
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This infographic visualizes several net worth milestones to give you a better idea of where you stand today.
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The goalposts of wealth are always shifting due to inflation and other factors.
For example, someone with a net worth of $1 million several decades ago would have been considered very wealthy. According to recent survey results, however, $1 million is only enough to feel “financially comfortable” today.
In this infographic, we’ve visualized several money milestones to give you a better idea of what it really takes to be wealthy in America.
This table lists the data used in the above infographic.
It covers data on what it takes to get into the top one percent for wealth in key states, along with broader survey results about what net worth thresholds must be crossed in order to be considered “comfortable financially” or even “wealthy”.
According to Charles Schwab’s Modern Wealth Survey, a net worth of $774,000 is needed to feel “financially comfortable”, while $2.2 million is needed to be considered “wealthy”.
Both of these milestones are far greater than the average (median) American’s wealth, which according to the Federal Reserve, was $122,000 in 2019.
Research by Knight Frank determined that in order to be a member of America’s one percent, one would need a net worth of $4.4 million. This is very high compared to other developed countries such as Japan ($1.5 million), the UK ($1.8 million), and Australia ($2.8 million).
The difference is partly due to America’s large population of ultra high net worth individuals, which includes the country’s 724 billionaires. See below for a list of the top five countries by number of billionaires.
Source: World Population Review (As of 2021)
Focusing again on the U.S., we can also see large discrepancies at the individual state level. Entry into California’s one percent requires a net worth of $6.8 million, which is 62% higher than the national average.
California is famously home to many of the world’s richest people, including Google co-founder Larry Page, and Facebook founder Mark Zuckerberg.
Being a one percenter in Mississippi, on the other hand, requires $766,000. That’s 83% lower than the national average, and just a tad lower than the amount needed to be “financially comfortable” by the average American. This is partially due to Mississippi’s poverty rate of 19.6%, which according to the U.S. Census Bureau, is the highest in the country.
Inflation rates are reaching multi-decade highs in some countries. How aggressive have central banks been with interest rate hikes?
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Imagine today’s high inflation like a car speeding down a hill. In order to slow it down, you need to hit the brakes. In this case, the “brakes” are interest rate hikes intended to slow spending. However, some central banks are hitting the brakes faster than others.
This graphic uses data from central banks and government websites to show how policy interest rates and inflation rates have changed since the start of the year. It was inspired by a chart created by Macrobond.
To understand how interest rates influence inflation, we need to understand how inflation works. Inflation is the result of too much money chasing too few goods. Over the last several months, this has occurred amid a surge in demand and supply chain disruptions worsened by Russia’s invasion of Ukraine.
In an effort to combat inflation, central banks will raise their policy rate. This is the rate they charge commercial banks for loans or pay commercial banks for deposits. Commercial banks pass on a portion of these higher rates to their customers, which reduces the purchasing power of businesses and consumers. For example, it becomes more expensive to borrow money for a house or car.
Ultimately, interest rate hikes act to slow spending and encourage saving. This motivates companies to increase prices at a slower rate, or lower prices, to stimulate demand.
With inflation rates hitting multi-decade highs in some countries, many central banks have announced interest rate hikes. Below, we show how the inflation rate and policy interest rate have changed for select countries and regions since January 2022. The jurisdictions are ordered from highest to lowest current inflation rate.
The Euro area has 3 policy rates; the data above represents the main refinancing operations rate. Inflation data is as of May 2022 except for New Zealand and Australia, where the latest quarterly data is as of March 2022.

The U.S. Federal Reserve has been the most aggressive with its interest rate hikes. It has raised its policy rate by 1.5% since January, with half of that increase occurring at the June 2022 meeting. Jerome Powell, the Federal Reserve chair, said the committee would like to “do a little more front-end loading” to bring policy rates to normal levels. The action comes as the U.S. faces its highest inflation rate in 40 years.
On the other hand, the European Union is experiencing inflation of 8.1% but has not yet raised its policy rate. The European Central Bank has, however, provided clear forward guidance. It intends to raise rates by 0.25% in July, by a possibly larger increment in September, and with gradual but sustained increases thereafter. Clear forward guidance is intended to help people make spending and investment decisions, and avoid surprises that could disrupt markets.
Raising interest rates is a fine balancing act. If central banks raise rates too quickly, it’s like slamming the brakes on that car speeding downhill: the economy could come to a standstill. This occurred in the U.S. in the 1980’s when the Federal Reserve, led by Chair Paul Volcker, raised the policy rate to 20%. The economy went into a recession, though the aggressive monetary policy did eventually tame double digit inflation.
However, if rates are raised too slowly, inflation could gather enough momentum that it becomes difficult to stop. The longer high price increases linger, the more future inflation expectations build. This can result in people buying more in anticipation of prices rising further, perpetuating high demand.
“There’s always a risk of going too far or not going far enough, and it’s going to be a very difficult judgment to make.” — Jerome Powell, U.S. Federal Reserve Chair
It’s worth noting that while central banks can influence demand through policy rates, this is only one side of the equation. Inflation is also being caused by supply chain issues, a problem that is more or less outside of the control of central banks.
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