Household income in the United States explained

Household income is a measure commonly used by the United States government and private institutions, that counts the income of all residents over the age of 18 in each household, including not only all wages and salaries, but such items as unemployment insurance, disability payments, child support payments (not removing child support from wages and salaried yet counting it as overall income actually results in this money counting toward two households, artificially inflating the income between the two households), regular rental receipts, as well as any personal business, investment, or other kinds of income received routinely.[1] The residents of the household do not have to be related to the head of the household for their earnings to be considered part of the household's income.[2] As households tend to share a similar economic context, the use of household income remains among the most widely accepted measures of income. That the size of a household is not commonly taken into account in such measures may distort any analysis of fluctuations within or among the household income categories, and may render direct comparisons between quintiles difficult or even impossible.[3]

In 2006, the "real" (adjusted for inflation) median annual household income rose 1.3% to $50,233.00 according to the Census Bureau.[4] The real median earnings of men who worked full time, year-round climbed between 2006 and 2007, from $43,460 to $45,113 (about 3.6 time minimum wage in 2006 to 3.7 time minimum wage in 2007). For women, the corresponding increase was from $33,437 to $35,102 (2.8 and 2.9 times minimum wage respectively). The median income per household member (including all working and non-working members above the age of 14) was $26,036 in 2006.[5] In 2006, there were approximately 116,011,000 households in the United States. 1.93% of all households had annual incomes exceeding $250,000.[6] 12.3% fell below the federal poverty threshold[7] and the bottom 20% earned less than $19,178.[8] The aggregate income distribution is highly concentrated towards the top, with the top 6.37% earning roughly one third of all income, and those with upper-middle incomes controlling a large, though declining, share of the total earned income.[3] [9] Income inequality in the United States, which had decreased slowly after World War II until 1970, began to increase in the 1970s until reaching a peak in 2006. It declined a little in 2007.[10] Households in the top quintile (i.e., top 20%), 77% of which had two or more income earners, had incomes exceeding $91,705. Households in the mid quintile, with a mean of approximately one income earner per household had incomes between $36,000 and $57,657. Households in the lowest quintile had incomes less than $19,178 and the majority had no income earner.[11]

The 2006 economic survey also found that households in the top two income quintiles, those with an annual household income exceeding $60,000, had a median of two income earners while those in the lower quintiles (2nd and middle quintile) had median of only one income earner per household. Overall, the United States followed the trend of other developed nations with a relatively large population of relatively affluent households outnumbering the poor. Among those in between the extremes of the income strata are a large number of households with moderately high middle class incomes[9] and an even larger number of households with moderately low incomes.[12] While the median household income has increased 30% since 1990, it has increased only slightly when considering inflation. In 1990, the median household income was $30,056 or $44,603 in 2003 dollars. While personal income has remained relatively stagnant over the past few decades, household income has risen due to the rising percentage of households with two or more income earners. Between 1999 and 2004 household income stagnated showing a slight increase since 2004.[13] [14] According to the Bureau of Economic Analysis, per capita income has increased every year for the past 10 years, with an annual average of 5.2% gains for the past 4 years.The recently released US Income Mobility Study showed economic growth resulted in rising incomes for most taxpayers over the period from 1996 to 2005. Median incomes of all taxpayers increased by 24 percent after adjusting for inflation. The real incomes of two-thirds of all taxpayers increased over this period. Income mobility of individuals was considerable in the U.S. economy during the 1996 through 2005 period with roughly half of taxpayers who began in the bottom quintile moving up to a higher income group within 10 years. In addition, the median incomes of those initially in the lower income groups increased more than the median incomes of those initially in the higher income groups.[15]

Household income

The 2003 Median Income of US households was $45,018 per annum.

Income rangeHouseholds
(thousands)
PercentPercentileMean number of earnersMean household size
colspan=4$0 to $25,000 (28.22%)0.61.9
Under $2,5002,5662.26%00.231.97
$2,500 to $4,9991,3891.22%2.26%0.522.04
$5,000 to $7,4992,4902.20%3.48%0.391.76
$7,500 to $9,9993,3602.96%5.68%0.331.66
$10,000 to $12,4994,0133.54%8.64%0.461.71
$12,500 to $14,9993,5433.13%12.18%0.501.84
$15,000 to $17,4993,7603.32%15.31%0.671.99
$17,500 to $19,9993,4383.03%18.63%0.732.10
$20,000 to $22,4994,0613.58%21.66%0.842.11
$22,500 to $24,9993,3752.98%25.24%0.792.14
colspan=4$25,000 to $50,000 (26.65%)12.5
$25,000 to $27,4993,9383.48%28.22%0.932.21
$27,500 to $29,9992,8892.55%31.70%1.012.30
$30,000 to $32,4993,9213.46%34.25%1.122.38
$32,500 to $34,9992,7272.41%37.71%1.172.39
$35,000 to $37,4993,3602.96%40.12%1.222.36
$37,500 to $39,9992,6332.32%43.08%1.252.49
$40,000 to $42,4993,3782.98%45.40%1.312.46
$42,500 to $44,9992,2942.02%48.38%1.382.60
National Mediancolspan=2$44,38950.00%1.352.57
$45,000 to $47,4992,7002.38%50.40%1.392.60
$47,500 to $49,9992,3712.09%52.78%1.492.62
colspan=4$50,000 to $75,000 (18.27%)23
$50,000 to $52,4993,0712.71%54.87%1.462.60
$52,500 to $54,9992,0061.77%57.58%1.582.72
$55,000 to $57,4992,4202.13%59.35%1.612.75
$57,500 to $59,9991,7861.57%61.48%1.702.87
$60,000 to $62,4992,5662.26%63.05%1.632.82
$62,500 to $64,9991,7741.56%65.31%1.792.89
$65,000 to $67,4992,1011.85%66.87%1.812.93
$67,500 to $69,9991,6371.44%68.72%1.742.80
$70,000 to $72,4991,9781.74%70.16%1.772.88
$72,500 to $74,9991,4131.24%71.90%1.823.00
colspan=4$75,000 to $100,000 (10.93%)23
$75,000 to $77,4991,8021.59%73.14%1.822.95
$77,500 to $79,9991,2641.11%74.73%1.983.04
$80,000 to $82,4991,6731.47%75.84%1.893.01
$82,500 to $84,9991,2191.07%77.31%1.973.10
$85,000 to $87,4991,4181.25%78.38%1.943.00
$87,500 to $89,9999840.86%79.63%1.983.03
$90,000 to $92,4991,2821.13%80.49%1.953.03
$92,500 to $94,9999170.81%81.62%2.173.25
$95,000 to $97,4991,0230.90%82.43%2.063.29
$97,500 to $99,9998460.74%83.33%2.123.33
colspan=4$100,000 or more (15.93%)23
$100,000 to $149,99911,9409.89%84.07%rowspan=4ca. 2rowspan=4ca. 3
$150,000 to $199,9993,5953.17%93.96%
$200,000 to $249,9991,3251.37%97.13%
$250,000 and above1,6991.50%98.50%

SOURCE: US Census Bureau, 2005[6]

Quintiles

Households are often divided into quintiles according to their gross income. Each quintile represents 20%, or one fifth, of all households.

Household type is strongly correlated with household income. Married couples are disproportionately represented in the upper two quintiles, compared to the general population of households. Cross-referencing shows that this is likely due to the presence of multiple income earners in these families. Non-family households (individuals) are disproportionately represented in the lower two quintiles. Households headed by single males are disproportionately found in the middle three quintiles; single females head households concentrated in the bottom three quintiles.

The highest income households are almost ten times as likely to own their homes rather than rent, but in the lowest quintile, the ratio of owners to renters is nearly one to one.

The New York Times has used the quintiles to define class. It has assigned the quintiles from lowest to highest as bottom fifth, lower middle, middle, upper middle, and top fifth.[16]

DataAll householdsLowest fifthSecond fifthMiddle fifthFourth fifthHighest fifthTop 5%
Households (in 1000s)113,14622,62922,62922,62922,62922,6295,695
Lower limit$0$0$18,500$34,738$55,331$88,030$157,176
Median number of income earners1011222
colspan=8Tenure
Owner occupied62.4%49.0%58.8%68.9%80.5%90.0%92.8%
Renter occupied29.2%48.3%39.7%29.9%18.7%9.6%6.9%
colspan=8Type of household
Non-family households31.93%58.92%40.02%29.96%19.12%11.64%9.36%
Family households68.06%41.06%59.97%70.04%80.87%88.35%90.61%
colspan=8Breakdown of family households
Married couple families51.35%19.03%38.89%51.00%67.05%80.08%85.59%
Single-male family4.32%3.08%4.64%5.69%4.89%3.30%2.47%
Single-female family12.38%18.94%16.43%13.35%8.93%4.24%2.54%

SOURCE: US Census Bureau, 2004[17]

Race

Despite advances minorities have made to exit poverty, there is still an uneven racial distribution among the income quintiles. While White Americans made up roughly 75.1% of all persons in 2000,[18] 87.93% of all households in the top 5% were headed by a person who identified as being White alone. Only 4.75% of all household in the top 5% were headed by someone who identified him or herself as being Hispanic or Latino of any race,[19] versus 12.5% of persons identifying themselves as Hispanic or Latino in the general population.[18] Overall, 86.01% of all households in the top two quintiles with upper-middle range incomes of over $55,331 were headed by a head of household who identified him or herself as White alone, while only 7.21% were being headed by someone who identified as being Hispanic and 7.37% by someone who identified as being African American or Black.[19] Overall, households headed by Hispanics and African Americans were underrepresented in the top two quintiles and overrepresented in the bottom two quintiles. Households headed by persons who identified as being Asian alone, on the other hand, were overrepresented among the top two quintiles. In the top five percent the percentage of Asians was nearly twice as high as the percentage of Asians among the general population. Whites were relatively even distributed throughout the quintiles only being underrepresented in the lowest quintile and slightly overrepresented in the top quintile and the top five percent.[19]

colspan=2RaceAll householdsLowest fifthSecond fifthMiddle fifthFourth fifthHighest fifthTop 5%
rowspan=2White aloneNumber in 1000s92,70216,94018,42418,97819,21519,7215,029
Percentage81.93%74.87%81.42%83.87%84.92%87.16%87.93%
rowspan=2Asian aloneNumber in 1000s4,1406245937868711,265366
Percentage3.65%2.76%2.26%3.47%3.84%5.59%6.46%
rowspan=2Black or African AmericanNumber in 1000s13,7924,4743,3392,6372,0531,287236
Percentage12.19%19.77%14.75%11.65%9.07%5.69%4.17%
rowspan=2Hispanic or Latino
(of any race)
Number in 1000s12,8383,0233,1302,8631,9311,204269
Percentage11.33%13.56%13.83%12.20%8.53%5.89%4.75%

SOURCE: US Census Bureau, 2004[19]

Ethnic group

See main article: List of ethnic groups in the United States by household income.

Education and gender

Household income as well as per capita income in the United States rise significantly as the educational attainment increases.[20] In 2005 graduates with a Master's in Business Administration (MBA) who accepted job offers were expected to earn a base salary of $88,626. They were also expected to receive an "average signing bonus of $17,428."[21] According to the US Census Bureau persons with doctorates in the United States had an average income of roughly $81,400. The average for an advanced degree was $72,824 with men averaging $90,761 and women averaging $50,756 annually. Year-round full-time workers with a professional degree had an average income of $109,600 while those with a Master's degree had an average income of $62,300. Overall, "…[a]verage earnings ranged from $18,900 for high school dropouts to $25,900 for high school graduates, $45,400 for college graduates and $99,300 for workers with professional degrees (M.D., D.P.T., D.P.M., D.O., J.D., Pharm.D., D.D.S., or D.V.M.).[22]

Considering how education significantly enhances the earnings potential of individuals, it should come as no surprise that individuals with graduate degrees have an average per capita income exceeding the median household income of married couple families among the general population ($63,813).[22] [23] Higher educational attainment did not, however, help close the income gap between the genders as the life-time earnings for a male with a professional degree were roughly forty percent (39.59%) higher than those of a female with a professional degree. The lifetime earnings gap between males and females was the smallest for those individuals holding an Associate degrees with male life-time earnings being 27.77% higher than those of females. While educational attainment did not help reduce the income inequality between men and women, it did increase the earnings potential of individuals of both sexes, enabling many households with one or more graduate degree householders to enter the top household income quintile.[22]

Household income also increased significantly with the educational attainment of the householder. The US Census Bureau publishes educational attainment and income data for all households with a householder who was aged twenty-five or older. The biggest income difference was between those with some college education and those who had a Bachelor's degree, with the latter making $23,874 more annually. Income also increased substantially with increased post-secondary education. While the median household income for a household with a householder having an Associates degree was $51,970, the median household income for householders with a Bachelor's degree or higher was $73,446. Those with doctorates had the second highest median household with a median of $96,830; $18,289 more than that for those at the Master's degree level, but $3,170 lower than the median for households with a professional degree holding householder.

colspan=2CriteriaOverallLess than 9th gradeHigh school drop-outHigh school graduateSome collegeAssociates degreeBachelor's degreeBachelor's degree or moreMaster's degreeProfessional degreeDoctoral degree
rowspan=3Median individual incomeMale, age 25+$33,517$15,461$18,990$28,763$35,073$39,015$50,916$55,751$61,698$88,530$73,853
Female, age 25+$19,679$9,296$10,786$15,962$21,007$24,808$31,309$35,125$41,334$48,536$53,003
Both sexes, age 25+$32,140$17,422$20,321$26,505$31,054$35,009$43,143$49,303$52,390$82,473$70,853
colspan=2Median household income$45,016$18,787$22,718$36,835$45,854$51,970$68,728$73,446$78,541$100,000$96,830

SOURCE: US Census Bureau, 2003[24]

The change in median personal and household since 1991 also varied greatly with educational attainment. The following table shows the median household income according to the educational attainment of the householder. All data is in 2003 dollars and only applies to householders whose householder is aged twenty-five or older. The highest and lowest points of the median household income are presented in bold face.[24] Since 2003, median income has continued to rise for the nation as a whole, with the biggest gains going to those with Associate's Degrees, Bachelor's Degree or More, and Master's Degrees. High-school dropouts fared worse with negative growth.

YearOverall MedianLess than 9th gradeHigh school drop-outHigh school graduateSome collegeAssociates degreeBachelor's degreeBachelor's degree or moreMaster's degreeProfessional degreeDoctoral degree
1991$40,873$17,414$23,096$37,520$46,296$52,289$64,150$68,845$72,669$102,667$92,614
1993$40,324$17,450$22,523$35,979$44,153$49,622$64,537$70,349$75,645$109,900$93,712
1995$42,235$18,031$21,933$37,609$44,537$50,485$63,357$69,584$77,865$98,302$95,899
1997$43,648$17,762$22,688$38,607$45,734$51,726$67,487$72,338$77,850$105,409$99,699
1999$46,236$19,008$23,977$39,322$48,588$54,282$70,925$76,958$82,097$110,383$107,217
2001$42,900$18,830$24,162$37,468$47,605$53,166$69,796$75,116$81,993$103,918$96,442
2003$45,016$18,787$22,718$36,835$45,854$56,970$68,728$73,446$78,541$100,000$96,830
Average$43,376$18,183$23,013$37,620$46,109$51,934$66,997$72,376$78,094$104,368$94,487

SOURCE: US Census Bureau, 2003

Age of householder

Household income in the United States varies substantially with the age of the person who heads the household. Overall, the median household income increased with the age of householder until retirement age when household income started to decline.[25] The highest median household income was found among households headed by working baby-boomers.[25] Households headed by persons between the ages of 45 and 54 had a median household income of $61,111 and a mean household income of $77,634. The median income per member of household for this particular group was $27,924. The highest median income per member of household was among those between the ages of 54 and 64 with $30,544 [The reason this figure is lower than the next group is because Pensions and Social Security add to income while a portion of older individuals also have work-related income.]). The group with the second highest median household income, were households headed by persons between the ages 35 and 44 with a median income of $56,785, followed by those in the age group between 55 and 64 with $50,400. Not surprisingly the lowest income group was composed of those households headed by individuals younger than 24, followed by those headed by persons over the age of 75. Overall, households headed by persons above the age of seventy-five had a median household income of $20,467 with the median household income per member of household being $18,645. These figures support the general assumption that median household income as well as the median income per member of household peaked among those households headed by middle aged persons, increasing with the age of the householder and the size of the household until the householder reaches the age of 64. With retirement income replacing salaries and the size of the household declining, the median household income decreases as well.[25]

Aggregate income distribution

The aggregate income measures the combined income earned by all persons in a particular income group. In 2007, all households in the United States earned roughly $7.723 trillion.[26] One half, 49.98%, of all income in the US was earned by households with an income over $100,000, the top twenty percent. Over one quarter, 28.5%, of all income was earned by the top 8%, those households earning more than $150,000 a year. The top 3.65%, with incomes over $200,000, earned 17.5%. Households with annual incomes from $50,000 to $75,000, 18.2% of households, earned 16.5% of all income. Households with annual incomes from $50,000 to $95,000, 28.1% of households, earned 28.8% of all income. The bottom 10.3% earned 1.06% of all income.

Distribution

See also: Income inequality in the United States.

+ Percentiles of net worth
198919921995199820012004
90–100205.1158.5172.8206.3272.7256.2
75–89.974.667.065.078.383.787.9
50–74.952.948.150.154.362.760.6
25–49.936.936.438.639.342.142.2
0–24.921.522.922.923.625.625.1
+ Percentiles of gross (pre-tax) income
198919921995199820012004
90–100114.7106.699.1102.4134.7143.8
75–89.961.256.752.665.874.177.0
50–74.946.343.243.647.054.452.4
25–49.932.332.235.335.337.237.0
0–24.915.317.217.818.521.020.5

Household income over time

All figures are in 2003 dollars.

Since 1967, the median household income in the United States has risen by 31%, fluctuating several times. The rise in household income is largely the result of an increase in personal income among college graduates, a group that has doubled in size since the 1960s, and women entering the labor force. Today, 42% of all households have two income earners. Household income increased dramatically faster for affluent households with income inequality having increased steadily since the 1970s.[27] [28]

While household income has increased, its growth has been slowed by a decrease in married-couple households who tend to have two earners and, therefore, higher incomes. While the proportion of wives working year-round in married couple households with children has increased from 17% in 1967 to 39% in 1996, the proportion of such households among the general population has decreased. This means that the share the most economically prosperous type of household has been dwindling in the United States.[29]

In 1969, more than 40% of all households consisted of a married couple with children. By 1996 only a rough quarter of US households consisted of married couples with children. As a result of these changing household demographics, median household income rose relatively slowly despite an ever-increasing female labor force and a considerable increase in the percentage of college graduates.[29]

Overall, the median household income rose from $33,338 in 1967 to an all-time high of $44,922 in 1999, and has since decreased slightly to $43,318. Decreases in household income are visible during each recession, while increases are visible during economic upturns. These fluctuations were felt across the income strata as the incomes of both the 95th and 20th percentile were affected by fluctuations in the economy. Income in the period between 1967 and 1999 grew considerably faster among wealthier households than it did among poorer households. For example the household income for the 80th precentile, the lower threshold for the top quintile, rose from $55,265 in 1967 to $86,867 in 2003, a 57.2% increase. The median household income rose by 30% while the income for the 20th percentile (the lower threshold for the second lowest quintile) rose by only 28% from $14,002 to $17,984. As the majority of households in the top quintile had two income earners, versus zero for the lowest quintile and that the widening gap between the top and lowest quintile may largely be the reflection of changing household demographics including the addition of women to the workforce.[29]

Household demographics are not, however, the cause of the growing gap between the top 5% and the rest of the upper quintile. The top 5% had fewer dual earner households and full-time workers than the top quintile overall. In 2003 a household in the 95th percentile earned 77.2% more than a household in the 80th percentile, compared to 60.5% in 1967, a 27.6% increase in the earnings increase discrepancy between the two groups. Overall the income of the 95th percentile grew 15.2% faster than that of the 80th, 146.8% faster than that of the median and 159.9% faster than that of the 20th percentile.[30]

Households in the top 1% experienced the by far greatest increases in household income. According to economist Janet Yellen "the growth [in real income] was heavily concentrated at the very tip of the top, that is, the top 1 percent."[31] A 2006 analysis of IRS income data by economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics showed that the share of income held by the top 1% was as large in 2005 as in 1928. The data revealed that reported income increased by 9% in 2005, with the mean for the top 1% increasing by 14% and that for the bottom 90% dropping slightly by 0.6%.[32]

While per-capita disposable income has increased 469% since 1972, it has only increased moderately when inflation is considered. In 1972, disposable personal income was determined to be $4,129; $19,385 in 2005 dollars. In 2005, disposable personal income was, however, $27,640, a 43% increase.[33] [34] Since the late 1990s, household income has fallen slightly.[35]

The following table shows US household income in 2009 constant (CPI-U-RS adjusted) dollars.[36] The final column shows the average change per year from 1976 to 2009.

Percentile20092006200320001997199419911988
20th$20,453$21,314$20,974$22,320$20,520$19,215$19,338$19,830
50th$49,777$51,278$50,519$52,301$49,309$46,175$46,269$47,433
80th$100,000$103,226$101,307$101,884$95,273$89,936$87,173$88,146
95th$180,001$185,119$179,740$180,879$168,626$157,172$148,055$149,207
Percentile1985198219791976197319701967Per Year
20th$18,898$17,927$19,274$18,526$18,973$18,180$16,845.30%
50th$44,898$43,048$45,325$43,483NANANA.41%
80th$82,843$77,683$79,851$75,648$77,723$72,273$66,481.85%
95th$136,881$128,232$129,029$119,967$124,921$114,243$106,6841.24%

Social class

See main article: Social class in the United States. Household income is one of the most commonly used measures of income and, therefore, also one of the most prominent indicators of social class. Household income and education do not, however, always reflect perceived class status correctly. Sociologist Dennis Gilbert acknowledges that "... the class structure... does not exactly match the distribution of household income" with "the mismatch [being] greatest in the middle..." (Gilbert, 1998: 92) As social classes commonly overlap, it is not possible to define exact class boundaries. According to Leonard Beeghley a household income of roughly $95,000 would be typical of a dual-earner middle class household while $60,000 would be typical of a dual-earner working class household and $18,000 typical for an impoverished household. William Thompson and Joseph Hickey see common incomes for the upper class as those exceeding $500,000 with upper middle class incomes ranging from the high 5-figures to most commonly in excess of $100,000. They claim the lower middle class ranges from $35,000 to $75,000; $16,000 to $30,000 for the working class and less than $2,000 for the lower class.

Income by state

In 2010, the median household income by state ranged from $35,693 in Mississippi to $66,334 in Maryland. California, with the highest median home price in the nation[37] and home prices that far outpaced incomes,[38] only ranked ninth with a median household income of $61,021.[39] While California's median income was not near enough to afford the average California home or even a starter home, West Virginia, which had one of the nation's lowest median household incomes, also had the nation's lowest median home price.[37] [39]

By Census Bureau Region, of the 15 states with the highest median household income, only Minnesota is located in the Mid-West, while five are in the Northeast (New Jersey, Connecticut, Massachusetts, New Hampshire and New York) three are in the South (Delaware, Maryland and Virginia), and the other six (Alaska, Hawaii, California, Washington, Colorado and Utah) are in the West.

The southern states had, on average, the lowest median household income, with nine of the country's fifteen poorest states located in the South. However, most of the poverty in the South is located in rural areas. Metropolitan areas such as Atlanta, Nashville, Charlotte, Raleigh-Durham, Richmond, Birmingham, Dallas, Houston, and Miami are areas within the southern states that have above average income levels. Overall, median household income tended to be the highest in the nation's most urbanized northeastern, upper midwestern and west coast states, while rural areas, mostly in the southern and mountain states(like Wyoming, Colorado, Utah, and Nevada), had the lowest median household income.[39]

Median Household Income by State[40]

RankState2009200820072004–2006Cost of Living Index[41] 2009 Data adjusted for COL
1Maryland$69,272$70,545$68,080$62,372124.81$55,502
2New Jersey$68,342$70,378$67,035$64,169128.47$53,197
3Connecticut$67,034$68,595$65,967$59,972130.22$51,477
4Alaska$66,953$68,460$64,333$57,639132.64$50,477
5Hawaii$64,098$67,214$63,746$60,681165.56$38,716
6Massachusetts$64,081$65,401$62,365$56,236117.8$54,398
7New Hampshire$60,567$63,731$62,369$60,489116.68$51,909
8Virginia$59,330$61,233$59,562$55,10897.66$60,752
District of Columbia$59,290$57,936$54,317$47,221 (2005)139.92$42,374
9California$58,931$61,021$59,948$53,770132.56$44,456
10Delaware$56,860$57,989$54,610$52,214102.4$55,527
11Washington$56,548$58,078$55,591$53,439103.98$54,384
12Minnesota$55,616$57,288$55,082$57,363102.23$54,403
13Colorado$55,430$56,993$55,212$54,039102.23$54,221
14Utah$55,117$56,633$55,109$55,17995.15$57,926
15New York$54,659$56,033$53,514$48,201128.29$42,606
16Rhode Island$54,119$55,701$53,568$52,003123.25$43,910
17Illinois$53,966$56,235$54,124$49,28096.08$56,168
18Nevada$53,341$56,361$55,062$50,819101.39$52,610
19Wyoming$52,664$53,207$51,731$47,22798.66$53,379
20Vermont$51,618$52,104$49,907$51,622120.38$42,879
United States$50,221$52,029$50,740$46,242 (2005)
21Wisconsin$49,993$52,094$50,578$48,87496.45$51,833
22Pennsylvania$49,520$50,713$48,576$47,791100.67$49,190
23Arizona$48,745$50,958$49,889$46,729103.73$46,992
24Oregon$48,457$50,169$48,730$45,485110.47$43,864
25Texas$48,259$50,043$47,548$43,42591.04$53,009
26Iowa$48,044$48,980$47,292$47,48993.98$51,122
27North Dakota$47,827$45,685$43,753$43,75395.91$49,867
28Kansas$47,817$50,177$47,451$44,26491.31$52,368
29Georgia$47,590$50,861$49,136$46,84192.21$51,610
30Nebraska$47,357$49,693$47,085$48,12691.09$51,989
31Maine$45,734$46,581$45,888$45,040116.42$39,284
32Indiana$45,424$47,966$47,448$44,80694.19$48,226
33Ohio$45,395$47,988$46,597$45,83793.85$48,370
34Michigan$45,255$48,591$47,950$47,06495.25$47,512
35Missouri$45,229$46,867$45,114$44,65191.66$49,344
36South Dakota$45,043$46,032$43,424$44,62498.53$45,715
37Idaho$44,926$47,576$46,253$46,39593.04$48,287
38Florida$44,736$47,778$47,804$44,44898.39$45,468
39North Carolina$43,674$46,549$44,670$42,06196.21$45,394
40New Mexico$43,028$43,508$41,452$40,82798.88$43,515
41Louisiana$42,492$43,733$40,926$37,94396.15$44,193
42South Carolina$44,625$43,329$40,82298.71$42,997
43Montana$42,322$43,654$43,531$38,629100$42,322
44Tennessee$41,725$43,614$42,367$40,67689.49$46,625
45Oklahoma$41,664$42,822$41,567$40,00190.09$46,247
46Alabama$40,489$42,666$40,554$38,47392.74$43,659
47Kentucky$40,072$41,538$40,267$38,46689.21$44,919
48Arkansas$37,823$38,815$38,134$37,42090.61$41,743
49West Virginia$37,435$37,989$37,060$37,22794.4$39,656
50Mississippi$36,646$37,790$36,338$35,26192.26$39,720
Puerto Rico$18,314$18,401$17,741$17,184 (2005)

Median income

The median household income in the United States was $44,389 as of 2004.[6] The median income divides households in the US evenly in the middle with half of all household earning more than the median income and half of all households earning less than the median household income. According to the US Census Bureau, the median is "considerably lower than the average, and provides a more accurate representation."[42] Considering other racial and geographical differences in regards to household income, it should come as no surprise that the median household income varies with race, size of household and geography. The state with the highest median household income in the United States as of the US Census Bureau 2005/06 is New Jersey with $66,752, followed by Maryland, Hawaii and Connecticut, making the Northeastern United States the wealthiest area by income in the entire country.[43]

Regionally, in 2010, the Northeast reached a median income of $53,283, the West, $53,142, the South, $45,492, and the Midwest, $48,445.[44] Each figure represents a decline from the previous year.

While median household income has a tendency to increase up to four persons per household, it declines thereon after. This indicated that while four person households have larger incomes than those with one, two or three members, households seem to earn progressively less as their size increases beyond four persons. According to the US Census Bureau 2004 Community Survey, two-person households had a median income of $39,755, with $48,957 for three-person households, $54,338 for four-person households, $50,905 for five-person households, $45,435 for six-person households, with seven-or-more-person households having the second lowest median income of only $42,471.[45] In terms of race, Asian-American households had the highest median household income of $57,518, European-American households ranked second with $48,977, Hispanic or Latino households ranked third with $34,241. African-American or Black households had the lowest median household income of all races with $30,134.[46]

Mean income

Another common measurement of personal income is the mean household income. Unlike the median household income, which divides all households in two halves, the mean income is the average income earned by American households. In the case of mean income, the income of all households is divided by the number of all households.[47] The mean income is usually more affected by the relatively unequal distribution of income which tilts towards the top.[42] As a result, the mean tends to be higher than the median income, with the top earning households boosting it. Overall, the mean household income in the United States, according to the US Census Bureau 2004 Economic Survey, was $60,528, or $17,210 (39.73%) higher than the median household income.[48]

The US Census Bureau also provides a breakdown by self-identified ethnic groups as follows (as of March 2005):

Mean Household Income by Ethnicity
Ethnic CategoryMean Household Income
Asian alone$76,747
White alone$65,317
Hispanic or Latino$45,871
Black$40,685

See also

External links

Notes and References

  1. Web site: Census Long Form Definition date=July 30, 2009. United States Department of Housing and Urban Development.
  2. Web site: Definition of household income. 2006-08-10. http://web.archive.org/web/20060421192927/http://www.sccommunityprofiles.org/glossary.asp . 2006-04-21.
  3. Book: Gilbert, Dennis. 1998. The American Class Structure. Wadsworth Publishing. New York. 0-534-50520-1.
  4. Web site: US Census Bureau news release in regards to median income. 2007-08-28.
  5. Web site: US Census Bureau median income per household member. 2008-08-28.
  6. Web site: US Census 2006 Economic Survey, income data. 2007-08-28.
  7. Web site: US Census Bureau press release regarding poverty. 2008-07-04.
  8. Web site: US Census Bureau, income quintiles, 2007. 2007-08-28.
  9. News: USAToday, the definition of middle class income. 2006-07-14. USA Today. Christine. Dugas. 2003-09-15.
  10. Web site: Distribution of Income, Frank Levy. 2007-11-10.
  11. Web site: US Census Bureau, income quintiles, 2006. 2007-02-11.
  12. Web site: US Census 2006 Economic Survey, income data. 2006-06-29.
  13. Web site: US Census Bureau, Median household income 1990. 2006-08-10.
  14. Web site: CPI inflation calculator, 1990 USD to 2003 USD. 2006-08-10.
  15. Web site: US Treasury Income Mobility Study,, income data. 2008-08-29.
  16. News: New York Times definition of class according to the quintiles. 2008-05-02. The New York Times. 2005-05-15.
  17. Web site: US Census Bureau, income quintilea and Top 5 Percent, 2004. 2006-07-08.
  18. Web site: US Census Bureau, 2000 Census racial data. 2006-06-29.
  19. Web site: US Census Bureau 2005 Economic survey, racial income distribution. 2006-06-29.
  20. Web site: US Census Bureau, Income by education and sex. 2006-06-30. http://web.archive.org/web/20060411165615/http://www.census.gov/hhes/income/earnings/call1usboth.html . 2006-04-11.
  21. Web site: Wall Street Journal on MBA salary base. 2006-06-30.
  22. Web site: US Census Bureau on Education and Income. 2006-06-30.
  23. Web site: Infoplease, median household income. 2006-06-29.
  24. Web site: Personal income and educational attainment, US Census Bureau. 2006-09-24. http://web.archive.org/web/20060907174557/http://www.census.gov/hhes/income/histinc/p16.html . 2006-09-07.
  25. Web site: US Census Bureau median household income by age of householder. 2006-07-07.
  26. Web site: US Census 2007 Economic Survey, income data. US Census Bureau. May 2008.
  27. Web site: US Census Bureau. (2001). Historical Income Tables – Income Equality.. 2007-06-20. http://web.archive.org/web/20070208142023/http://www.census.gov/hhes/www/income/histinc/ie6.html . 2007-02-08.
  28. Web site: Weinberg, D. H. (June 1996). A Brief Look At Postwar U.S. Income Inequality. US Census Bureau.. 2007-06-20.
  29. Web site: Income from 1969 to 1996, US Census Bureau. 2006-09-26.
  30. Web site: DeNavas, C., Proctor, B. D., Mills, R. J. (August 2004). Income, Poverty, Health Insurance Coverage in the United States: 2003. 2007-06-20.
  31. Web site: Yellen, J. L. (November 6, 2006). Speech to the Center for the Study of Democracy at the University of California, Irvine. Federal Reserve Bank of San Francisco.. 2007-06-20.
  32. News: Johnston, D. (March 29, 2007). Income Gap Is Widening, Data Shows. The New York Times. 2007-06-20. 2007-03-29.
  33. Web site: US Personal Income News Release. 2006-12-18.
  34. Web site: Overview of BLS statistics on Inflation and Spending. 2006-12-18.
  35. Web site: US Households and Families 2000. 2006-12-18.
  36. http://www.census.gov/hhes/www/income/data/historical/household/index.html US Census Bureau. "Historical Income Tables – Households." Tables H-1 and H-6. Retrieved 2011-07-18.
  37. Web site: Median home price by state. 2006-07-01.
  38. Web site: link|date=December 2011}} Home prices outpacing income. 2006-07-01.
  39. Web site: US Census Bureau, median household income by state 2004. 2006-07-01. http://web.archive.org/web/20060628082502/http://www.census.gov/hhes/www/income/income04/statemhi.html . 2006-06-28.
  40. http://factfinder.census.gov/servlet/GRTTable?_bm=y&-_box_head_nbr=R1901&-ds_name=ACS_2008_1YR_G00_&-_lang=en&-format=US-30&-CONTEXT=grt 2008 Median Household Income
  41. Web site: Cost of Living 4th Quarter 2011. Missourieconomy.org. 2001-12-21. 2012-02-21.
  42. Web site: US Census Bureau on the nature the median in determining wealth. 2006-06-29.
  43. Web site: US Census Bureau, median household income by state. 2006-06-29. http://web.archive.org/web/20060628082502/http://www.census.gov/hhes/www/income/income04/statemhi.html . 2006-06-28.
  44. Book: Carmen. DeNavas-Walt. Bernadette D.. Proctor. Jessica C.. Smith. September. 2011. Income, Poverty, and Health Insurance Coverage in the United States: 2010. U.S. Census Bureau.
  45. Web site: US Census Bureau, median family income by family size. 2006-06-29. http://web.archive.org/web/20060626001929/http://www.census.gov/hhes/www/income/medincsizeandstate.html . 2006-06-26.
  46. Web site: US Census Bureau, median household income according to certain demographic characteristics. 2006-06-29. http://web.archive.org/web/20060618064117/http://www.census.gov/Press-Release/www/releases/archives/income_wealth/005647.html . 2006-06-18.
  47. Web site: US Government, the different between mean and median. 2006-06-29. http://web.archive.org/web/20060922200944/http://www.business.gov/topics/research_resources/market_research/census_bureau_faq.html . 2006-09-22.
  48. Web site: US Census Bureau, mean household income. 2006-06-29.