Income rises for middle-income and bottom-income households

“The latest Distribution of Household Income report from the Congressional Budget Office finds that average inflation-adjusted household income in the US grew for every fifth of the income distribution between 1979 and 2023, both before and after means-tested transfers and federal taxes. The richest fifth of households saw their incomes grow the fastest, but households in the bottom and middle fifths also enjoyed substantial gains. Among households in the bottom fifth of the income distribution, average real annual income rose by 50 percent before means-tested transfers and federal taxes and 108 percent after,” notes Human Progress.

In the U.S., the typical person has a higher income than ever. “U.S. inflation-adjusted median household income reached a record high of $87,460 in 2025,” according to statistics cited in the New York Times.

The CBO notes that the gains continued in recent years for people of modest means:

“In 2023, average income before transfers and taxes rose for households at the bottom of the income distribution and fell for those at the top. Income increased by 5 percent among households in the lowest quintile (or fifth) of the distribution from 2022 to 2023. (All measures of income in this report have been adjusted to remove the effects of inflation.) By contrast, income decreased by 9 percent among households in the top 1 percent. That decrease was largely due to a reduction in realized capital gains. Average income from other sources, on net, remained relatively unchanged among households in the top 1 percent.” In 2024 and 2025, incomes rose for those at the top.

Average incomes would rise further if states got rid of occupational licensing restrictions that keep some people from working. Back in the 1950s, most states didn’t require hairstylists or hair braiders to get a license before they could cut people’s hair. Just 4 percent of Americans needed a license to work in 1950. Now, 30 percent of Americans need a occupational license to work.

As economist Chris Edwards of the Cato Institute notes, “The increase in mandatory licensing has reduced workforce mobility and created barriers to work and advancement. The barriers particularly harm young people starting their careers, people with low incomes, people switching occupations, people moving between states, veterans or military spouses, and people with a criminal record.”

As the Institute for Justice pointed out, studies find that licensing requirements typically increase costs to consumers while not improving the quality of services. Licensing board are often rackets focused on stifling competition rather than protecting consumers.

Global average life expectancy and income are at an all-time high.  Worldwide, child deaths have fallen by 8 million over the last three dozen years. “The number of children living in extreme poverty fell to a record low of 412 million in 2024, down from 507 million a decade earlier.”

Poverty has fallen in most of the world in each year since 2021.