Earlier this month, the US Census Bureau released new data on 2023 poverty and incomes. The headline figures show that that incomes are up, while poverty is down. But a deeper dive into the data reveals that the truth is more complicated. Alarming economic inequalities — especially along the lines of race and gender— remain, and some are even worsening.

Poverty Remains High and Reflects Racialized Economic Inequalities

Census data shows that poverty remains high, especially for marginalized groups. The “official poverty rate” (OPM) decreased by a modest 0.4% from 2022 to 11.1%. This decrease, however, was driven by reduced poverty among white households. The 2023 poverty rate for Black households (17.9%), by contrast, did not experience a statistically significant change from 2022.

But the OPM provides an incomplete picture of poverty. It does not factor in geographical variation in the cost of living or the impact of the tax code and noncash support such as food stamps. The more comprehensive “supplemental poverty rate” (SPM) does take these into account. At 12.9%, the overall SPM poverty rate increased by 0.5% from 2022, with the increase driven in large part by soaring rent costs.

Using the SPM, we see that child poverty in particular remains extremely high following the expiration of pandemic-era support, especially the expanded child tax credit. In 2021, in response to the pandemic, Congress increased the value of the credit and made it fully accessible to the poorest families for the first time. This resulted in a record-low child poverty rate of 5.2%, which immediately doubled in 2022 when the expansion expired. In 2023, the rate further increased by 1.3% and now stands at 13.7%. But this increase was not felt equally, with Black and Hispanic children experiencing substantially higher levels of poverty.

There are persistent —and in some cases, widening— income inequalities along the lines of gender and race.

While median household income rose for the first time since 2019, the aggregate numbers obscure troubling racial inequality. White households were the only group to see higher incomes in 2023 (with a 5.7% increase since 2022 to $89,050). Black and Hispanic households saw no statistically significant increase in 2023. They still have median household incomes substantially lower than white households, with Black households having the lowest incomes among US racial and ethnic groups surveyed.

Census data also shows that already substantial workplace inequalities have increased, with only white workers and male workers seeing their employment earnings increase from 2022. The gender wage gap widened for the first time in 20 years. In 2023, women working full-time year-round earned 83 cents for every dollar a man earned: a decrease in earnings from 84 cents to the dollar in 2022. When we include women working part-time or for only part of the year, that number drops to just 75 cents for every dollar. Women are more likely to work part-time or seasonally to juggle the caregiving responsibilities they disproportionately hold.

The wage gap widened even more for Black women working full-time year-round, who earned 66 cents for every dollar a white man earned in 2023—3 cents less than in 2022.

Latinas working full-time year-round earned 58 cents on the dollar in 2023 (an improvement of one cent from 2022), and all Latina workers (including part-time and seasonal workers) earned just 51 cents for every dollar a white man earned (a one-cent decrease from 2022).

That inequality along the lines of gender and race is widening in the United States is alarming. But it’s not necessarily surprising. These gaps persist because of racist and sexist exclusions in our labor laws, the systemic undervaluing of “women’s work,” unequal care responsibilities, occupational segregation, and discrimination.

The Tax and Transfer System Reduces Poverty and Inequality, but Not by Nearly Enough

The new data also shows how the US tax code affects inequality. Take the Gini coefficient, a popular way to measure income inequality. By this measure, taxes reduced inequality by 10.4%. Moreover, before taxes, a family in the richest 10% of households made more than 10 times the income of a family in the bottom 10%. After taxes, this ratio drops to 7.4, a nearly 30% decrease. This level of inequality is far too high, but the substantial reductions in inequality the current flawed system achieves shows how effectively a more progressive tax code could reduce persistent income gaps.

Census data also reveals how various safety net programs impact poverty rates. The effectiveness of social security immediately stands out. The program lifts nearly 28,000,000 people out of poverty, more than all other programs analyzed by the Census combined. Social Security’s near universality is critical to its success. Nearly 97% of older adults receive or will receive social security benefits. But its universality is an outlier. Many other poverty-alleviation benefits in the US have onerous conditionalities and eligibility requirements — motivated in part by racist and sexist stereotypes regarding Black mothers — that exclude many low-income households.

Poverty and Inequality Are Policy Choices

Policies can create a more equitable society, and ensure that everyone can enjoy an adequate standard of living, but the US chooses not to use many of them.

There are clear ways to raise incomes and provide solutions to widening race and gender income gaps. We need stronger equal pay laws. We need to raise the minimum wage and eliminate subminimum wages that disproportionately trap women in poverty. We need to disrupt occupational segregation and invest in the care economy, enacting policies like comprehensive paid family and medical leave that support caregivers in the workplace. And we need to expand and protect rights to organize and collectively bargain.

We can also reduce poverty and inequality using the tax code. We need to increase taxes on the ultrarich and corporations, and we need new taxes on extreme wealth. Revenues from progressive taxation can help end child poverty, and ensure that everyone has the resources they need, by making the safety net more universal, accessible and generous. To start, we ought to restore the pandemic-era expanded child tax credit.

Census data reveals that the US remains marred by economic inequality, especially along lines of gender and race, and that some of these inequities are worsening. But the good news is that we can reduce them. In fact, there are proposals on the table right now to do so, like the Raise the Wage Act, the Paycheck Fairness Act, and the Ultra-Millionaire Tax Act. By reforming tax and labor policies, we help create a society where nobody is left behind.