Understanding Houston

Income & Inequality

Income and Inequality in Houston

While the overall Houston region is rich in economic prosperity, persistent income inequalities signal many residents of color have not benefited

Incomes in the Houston region have barely increased over the last decade, yet disparities across race/ethnicity have persisted.

Why income and inequality matter to Houston

Strong and stable incomes help our communities thrive. Although income in itself does not necessarily equate to greater well-being, higher levels of household income generally allow for additional (or more desirable) choices, opportunities, and resources, including the choice of where to live, opportunities for employment, and access to parks, safe neighborhoods, and fresh food. Without sufficient wages, people struggle to afford basic necessities and invest less in their education, business, or future. In fact, income and wealth shape some of the most important factors of everyday life, including overall health, homeownership, job type and more.1 Despite Houston’s diverse and dynamic nature, severe income inequalities exist across gender and race/ethnicity, which negatively affect all of us. McKinsey & Company estimates that national GDP could be 4 to 6 percent higher by 2028 if we close the racial wealth gap.

By delving into the facts and striving to understand our communities better, Houstonians can take steps to ensure that all families across the three-county area can participate in and reap the benefits of our region’s expanding prosperity.

The data

Household incomes in the Houston area remain sluggish yet disparities persist

Household income measures a family’s ability to meet their basic needs, and includes earnings for each household member, income from social security, interest, dividends, and other sources. Median household income is the level at which half of households earn more and half of households earn less.

In 2024, the median household income (in 2024 dollars) was $114,876 in Fort Bend County (the highest in Houston’s three-county region), $94,203 in Montgomery County, and $74,629 in Harris County. While median household income in Fort Bend and Montgomery counties is higher than in Texas and the U.S. overall, Harris County’s has historically been about the same but has become slightly lower in recent years. 

Between 2010 and 2024, income growth in the Houston region significantly lagged behind that in the state and nation overall. Median household income remained flat in Montgomery County but slightly grew by 3% in Harris County and 5% in Fort Bend County. This is a slower growth rate compared to the state (14% increase) and nation (13% increase) during the same period.

Consistent with patterns seen in communities across the country, median household income in the Houston area varies significantly by racial/ethnic group. Racial discrimination in many forms, including in education, hiring, pay practices, and homeownership contributes to persistent earnings gaps.2, 3

As of 2024, the racial/ethnic wage gap continues to persist throughout the Houston region, consistent with trends at the state and national level. In 2024, white households in Fort Bend County earned 34% more than Black households and 57% more than Hispanic households — this is an improvement from 2010 when white households earned 63% and 85% more than Black and Hispanic households, respectively.

The Black-white income gap in Harris County has not improved as well but markedly less compared to Fort Bend and Montgomery counties. In 2024, white households in Harris County earned 87% more than Black households, marking an increase compared to 2010 when the gap was 101%. In 2024, white households in Harris County earned 65% more than Hispanic households, which is an improvement from 2010 when white households earned 83% more.

Income disparities in Montgomery County appear to have shrunk considerably in the last decade.4 In 2024, white households in Montgomery County earned 12% more than Black households and 19% more than Hispanic households. This is a significant improvement from 2010 when white households earned 84% and 65% more than Black and Hispanic households, respectively.

The income gap between white and Black households in Montgomery County decreased by 72 percentage points between 2010 and 2024.

Wealth disparities still persist and have worsened over time

Wealth includes all of a person’s or family’s assets including a home, savings, stocks, property and income. These assets can help families endure economic shocks like layoffs, natural disasters, or health emergencies.5 Homeownership stands as the primary means of accumulating wealth, but disparities persist in homeownership rates along racial and ethnic lines. Further, people of color tend to receive a lower return-on-investment in college and in incomes compared to the white population, meaning Black and Hispanic families are less able to turn each dollar of income or amount of education into wealth as white families.6

Data between 1989 and 2022, from the Survey of Consumer Finances and analyzed by the Congressional Budget Office, shows how the distribution of wealth in the United States has become more unequal. During this period, families in the top 10% of the distribution increased their share of total wealth from 56% to 60%, while the top 1% alone saw their share grow from 23% to 27%. At the same time, the bottom half of families held just 6% of total wealth throughout the entire period.

Wealth cannot be calculated for the Houston area due to data limitations. As a result, rather than looking at inequities in wealth, the subsequent analysis focuses on income and earnings and how they are unequally distributed among people in the Houston area.

In 2024, similar to the state and national levels, the top 20% of households in Harris County received 53.8% of the income, while the bottom 20% of households received only 2.7%. Similar patterns can be found in Fort Bend and Montgomery counties, where the top 20% of households received 48.4% and 51.8% of total income, respectively, while the bottom 20% of households received 3.5% and 3.2% of the income, respectively.

3%

of all income in Harris County is held by the bottom 20% of households.

Additionally, this inequality in the distribution of income has been growing. Between 2010 and 2024, the proportion of income held by the top 20% of households increased by 1.3 percentage points in Fort Bend County and 2 percentage points in Harris and Montgomery counties. During the same period, the share of income held by every other income group decreased.

Gender and racial/ethnic pay gaps barely budge

Despite growing median income and employment, pay inequalities by race and gender in Houston’s three-county region continue. It’s important to note that this data does not look specifically at men and women with the same jobs or qualifications, however research has shown that gender pay disparities persist within occupations — with men making more, on average, than women,7 and even as women enter male-dominated fields, the overall pay actually begins to fall. Research also shows that women are less likely to hold or grow into higher-level, high-paying jobs compared to men, which affects this gender gap.8

One way to measure this disparity is to use the female-to-male earnings ratio, which represents the earnings of women compared to the earnings of men measured by cents on the dollar. The higher the earnings ratio, the smaller the pay gap.

In 2024, across the nation and state, women earned 82-83 cents for every dollar men were paid. In 2024, for every $1 earned by men, women earned 75 cents in Fort Bend County, 84 cents in Harris County, and 76 cents in Montgomery County.

From 2010 to 2024, the gender pay gap improved the most in Fort Bend County going from 0.70 in 2010 to 0.75 in 2023. This gap remained unchanged in Harris County between 2010 and 2023 and worsened by three cents in Montgomery County.

Earnings ratio by race ethnicity

The racial and ethnic earnings ratio measures median earnings for people of color relative to the earnings of white residents. In the U.S., gaps between white workers and Black and Hispanic workers have persisted since 1970.

Black and Hispanic workers across all three Houston-area counties earn less than their white counterparts. Between 2010 and 2024, this gap has improved outpacing the rate of improvement seen nationally. Yet, in my cases, the starting point was so far below the national average that even faster progress has not been enough to close the gap. This is particularly pronounced in Harris County.

Gender earnings ratio by race/ethnicity

Belonging to a certain race or age group does not protect women from experiencing gender pay disparities. This disadvantage affects women at every education, occupation, and age group, though higher-earning women and mid-career women are at a greater disadvantage compared to their male counterparts. And relative to white male wages, Black and Hispanic women are the most disadvantaged.9

White women experience the greatest gender pay gap, earning the least relative to each dollar a white man makes; whereas Black women consistently have the lowest gender pay gap compared to their male counterparts. This is most likely because the average white man earns so much, while the pay for the average Black man is significantly lower, by comparison. In Montgomery County, Asian women experience the greatest gender pay gap.

Unlike the racial/ethnic pay gap, the gender pay gap by race and ethnicity has not improved across the board. In Fort Bend County between 2010 and 2024, the earnings ratio between Black women and men improved by 10 cents, while the ratio for Hispanic workers worsened by 10 cents. Montgomery County followed a similar pattern with the female-to-male earnings ratio for Black workers improving by 13 cents between 2010 and 2024 but the Hispanic ratio declining by 19 cents. These large positive and negative swings stand in contrast to the state and national picture where changes in the gender pay gap by race/ethnicity, either positive or negative, remained limited to the low single digits.

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Resources

References:

  1. Killewald, Alexandra, Fabian T. Pfeffer, and Jared N. Schachner. “Wealth Inequality and Accumulation“. Annual Review of Sociology 43 (2017): 379-404.
  2. Wilson, V., & Darity Jr, W. (2022). Understanding black-white disparities in labor market outcomes requires models that account for persistent discrimination and unequal bargaining power.
  3. Pager, D., & Shepherd, H. (2008). The Sociology of Discrimination: Racial Discrimination in Employment, Housing, Credit, and Consumer Markets. Annual review of sociology, 34, 181–209. https://doi.org/10.1146/annurev.soc.33.040406.131740
  4. At a glance, Montgomery County’s graph on the median household incomes by race/ethnicity is extremely varied – but this may be due to issues with sample sizes and the quality of the data over time, and not an actual reflection of the wage gap either worsening or getting better in the county.
  5. Hanks, Angela, Danyelle Solomon, and Christian E. Weller. “Systematic inequality: How America’s structural racism helped create the black-white wealth gap.” Washington: Center for American Progress, February 21, 2018
  6. Sullivan, Laura, Tatjana Meschede, Lars Dietrich, and Thomas Shapiro. “The Racial Wealth Gap.” Institute for Assets and Social Policy, Brandeis University. DEMOS (2015).
  7. Gould, E., Schieder, J., & Geier, K. (2016). What is the gender pay gap and is it real?: The complete guide to how women are paid less than men and why it can’t be explained away. Retrieved from https://www.epi.org/publication/what-is-the-gender-pay-gap-and-is-it-real/
  8. Graf, Nikki, Anna Brown and Eileen Patten. “The narrowing, but persistent, gender gap in pay.” Pew Research Center (blog). March 22, 2019.
  9. Gould, E., Schieder, J., & Geier, K. (2016). What is the gender pay gap and is it real?: The complete guide to how women are paid less than men and why it can’t be explained away. Retrieved from https://www.epi.org/publication/what-is-the-gender-pay-gap-and-is-it-real/