Income is what people earn each year from wages, investments and government benefits. Inequality has risen in the US since the late 1970s as top earners captured a larger share of growth while wages at the bottom and middle stagnated. Economists measure it with tools like the Gini index, which the Census Bureau reports each year.
The racial income gap reflects policy, not chance. The 1938 Fair Labor Standards Act left farm and domestic workers, many of them Black, out of minimum wage protections. Hiring discrimination, occupational segregation and unequal schools have kept Black and Latino workers in lower-paying jobs. In 2023, the Black-to-white household income ratio was about 0.63, according to the Census Bureau.
Income inequality and wealth inequality are linked but different. Wealth is what a family owns minus what it owes. Income gaps make it harder to save and buy assets, so they feed the racial wealth gap. Policies like a higher minimum wage, guaranteed income and stronger unions aim to narrow both.