Census: Inequality last year grew, but child poverty dropped

Income inequality in the U.S. increased last year for the first time in more than a decade, but childhood poverty was cut almost in half due to expansion of the federal government's child tax credit and stimulus payments made in response to the COVID-19 pandemic, according to new survey results released Tuesday by the U.S. Census Bureau.

The income inequality index increased 1.2% from 2020 to 2021, the first time the measurement known as the Gini Index has increased since 2011, according to a report on Current Population Survey results.

Declines in household income among the poorest U.S. residents appears to have driven the widening of the income inequality gap. Households in the 90th percentile of the income distribution, the richest, had income that was 13.5 times higher than households in the 10th percentile, the poorest. That was a 4.9% increase from 2020.

“It is sensitive to extremes at either end,” said Liana Fox, a Census Bureau official. “This suggests that the decline in real income at the bottom drove the increase in the Gini index.”