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.

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 the level at which half of households earn more and half of households earn less.

In 2023, the median household income (in 2023 dollars) was $105,441 in Fort Bend County (the highest in Houston’s three-county region), $91,841 in Montgomery County, and $72,336 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 is about the same. 

Between 2010 and 2023, income growth in the Houston region significantly lagged behind that in the state and nation overall. Median household income remained relatively flat in Fort Bend and Montgomery counties but slightly grew by 3% in Harris County. This is a slower growth rate compared to the state (12% increase) and nation (11% 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 2023, the racial/ethnic wage gap continues to persist throughout the Houston region, consistent with trends at the state and national level. In 2023, white households in Fort Bend County earned 32% more than Black households and 46% 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 much in the last decade. In 2023, white households in Harris County earned 96% more than Black households, marking an increase compared to 2010 when the gap was 101%. In 2023, white households in Harris County earned 60% 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 in the last decade.⁴ In 2023, white households in Montgomery County earned 29% more than Black households and 36% 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.

Wealth disparities still persist and have worsened since 1963

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 1963 and 2019 from the Survey of Consumer Finances shows how the distribution of wealth in the United States has become more unequal:

• Families in the bottom 1% are roughly $100,000 in debt (negative wealth), being 15x more in debt than in 1963.
• Families in the bottom 10% are roughly $500 in debt (negative wealth).
• Families at the 90^th percentile have seen their wealth grow 5.4 times from 1963 ($238,860) to 2019 ($1,291,982).
• Families in the top 1% of earners have seen their wealth multiplied by 8 times from 1963 ($1,457,201) to 2019 ($11,762,462).

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 2023, similar to the state and national levels, the top 20% of households in Harris County received 53.2% of the income, while the bottom 20% of households received only 2.9%. Similar patterns can be found in Fort Bend and Montgomery counties, where the top 20% of households received 47.8% and 49.6% of total income, respectively, while the bottom 20% of households received 3.6% and 3.7% of the income, respectively.

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 2023, across the nation and state, women earned 82 cents for every dollar men were paid. In 2023, for every $1 earned by men, women earned 79 cents in Fort Bend County, 84 cents in Harris County, and 77 cents in Montgomery County.

From 2010 to 2023, the gender pay gap improved the most in Fort Bend County going from 0.70 in 2010 to 0.79 in 2023. This gap remained unchanged in Harris County between 2010 and 2023 and worsened by two 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.

In each Houston-area county, Asian American, Black, and Hispanic workers earn less relative to their white counterparts, except Asian-American workers in Fort Bend County who earn more. Between 2010 and 2023, this gap has decreased for each of the racial groups across all three counties.

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

In Fort Bend and Harris counties, 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. Across the four largest racial groups in all three counties, the state, and the nation, the gender pay gap has improved the most for Asian American women, compared to Asian American men, in Harris County decreasing by 11 cents while it has widened the most for Asian-American women in Montgomery County widening by 31 cents.

Helpful Articles by Understanding Houston:

• A Closer Look at Financial Hardship in the Houston Region
• The Great She-cession: How COVID-19 is impacting women in the workforce
• Is Houston really that affordable?