Household income in the United States
2007 Schools Wikipedia Selection. Related subjects: Economics
The Household income in the United States is a measure of private wealth commonly used by the United States government and private institutions. To measure the income of a household, the pre-tax earnings of all residents over the age of 15 are combined. The residents of the household do not have to be related to the householder for their earnings to be considered part of the household's income. The use of household income is often seen as the most dependable measure of personal wealth, as people tend to live in households that include other wage earners besides themselves. In 2004, the median annual household income according to the US Census Bureau was determined to be $43,389, nearly identical to that of Canada which was roughly $41,510 (USD) in the year 2000. The median income per household member (including all working and non-working members above the age of 14) in the year 2003 was $23,535. In the year 2005, there were approximately 113,146,000 households in the United States. 15.73% of all households had annual incomes exceeding $100,000, while another 12.7% fell below the federal poverty threshold. While the aggregate income distribution tends to tilt towards the top with the top 6.37% earning roughly one third of all income, it is important to note that the those with upper-middle incomes controlled an even greater share of the total earned income. Households with moderately high middle class incomes ranging from $50,000 to $100,000 a year, represented 29.2% of all households, yet earned a far greater share (c.a. 40%) of all income.
The 2005 economic survey also found that households in the top two income quintiles, those with an annual household income exceeding $55,331, had a mean of two income earners while those in the lower quintiles (2nd and middle quintile) had mean of only one income earner per household. Due to high unemployment among those in the lowest quintile the mean number of income earners for this particular group was determined to be zero. Overall the United States followed the trend of other industrialized countries with a relatively large population of relatively affluent households outnumbering the poor. Among those in-between the relative extremes of the income strata a large and quite powerful section of households with moderately high middle class incomes and an even larger number of households with moderately low incomes. While the median household income has increased 44% since 1990 it has decreased very slightly when considering inflation. In 1990, the median household income was determined to be $30,056; $44,603 in 2003 dollars. In 2003, the median household income was, however, only $43,389, showing a slight decrease.
Income at a glance
Income distribution
The following table illustrates the number and percentage of households in each of the income groups designated by the US Census Bureau. Households with annual income of less than $25,000, constituted 28.22% of all households, while households with incomes between $25,000 and $50,000 represented 23.25% of the population. Those with incomes ranging from $50,000 to $100,000 who were the largest income group constituted 29.2% of all households, while those with six figure incomes, represented the smallest income group, constituting only 15.82% of all households. Overall the number of households decreased as income went up. While 28.22% of households had annual incomes of less than $25,000, only 10.93% of households with gross annual incomes ranging from $75,000 to $100,000. It should be noted, however, that the top two quintiles have on average twice as many incomes earners per households as the second and middle quintile.
| Income range | Number of households (in thousands) | Percent | Cumulative percentages | ||
|---|---|---|---|---|---|
| Under $2,500 | 2,566 | 2.26 | less than $25k 28.22% |
less than $50k 54.98% |
less than $100k 84.18% |
| $2,500 to $4,999 | 1,389 | 1.22 | |||
| $5,000 to $7,499 | 2,490 | 2.20 | |||
| $7,500 to $9,999 | 3,360 | 2.96 | |||
| $10,000 to $12,499 | 4,013 | 3.54 | |||
| $12,500 to $14,999 | 3,543 | 3.13 | |||
| $15,000 to $17,499 | 3,760 | 3.32 | |||
| $17,500 to $19,999 | 3,438 | 3.03 | |||
| $20,000 to $22,499 | 4,061 | 3.58 | |||
| $22,500 to $24,999 | 3,375 | 2.98 | |||
| $25,000 to $50,000 | |||||
| $25,000 to $27,499 | 3,938 | 3.48 | $25k-$50k 23.25% |
||
| $27,500 to $29,999 | 2,889 | 2.55 | |||
| $30,000 to $32,499 | 3,921 | 3.46 | |||
| $32,500 to $34,999 | 2,727 | 2.41 | |||
| $35,000 to $37,499 | 3,360 | 2.96 | |||
| $37,500 to $39,999 | 2,633 | 2.32 | |||
| $40,000 to $42,499 | 3,378 | 2.98 | |||
| $42,500 to $44,999 | 2,294 | 2.02 | |||
| $45,000 to $47,499 | 2,700 | 2.38 | |||
| $47,500 to $49,999 | 2,371 | 2.09 | |||
| $50,000 to $75,000 | |||||
| $50,000 to $52,499 | 3,071 | 2.71 | $50k-$75k 18.27% |
$50k-$100k 29.2% |
|
| $52,500 to $54,999 | 2,006 | 1.77 | |||
| $55,000 to $57,499 | 2,420 | 2.13 | |||
| $57,500 to $59,999 | 1,786 | 1.57 | |||
| $60,000 to $62,499 | 2,566 | 2.26 | |||
| $62,500 to $64,999 | 1,774 | 1.56 | |||
| $65,000 to $67,499 | 2,101 | 1.85 | |||
| $67,500 to $69,999 | 1,637 | 1.44 | |||
| $70,000 to $72,499 | 1,978 | 1.74 | |||
| $72,500 to $74,999 | 1,413 | 1.24 | |||
| $75,000 to $100,000 | |||||
| $75,000 to $77,499 | 1,802 | 1.59 | $75k-$100k 10.93% |
||
| $77,500 to $79,999 | 1,264 | 1.11 | |||
| $80,000 to $82,499 | 1,673 | 1.47 | |||
| $82,500 to $84,999 | 1,219 | 1.07 | |||
| $85,000 to $87,499 | 1,418 | 1.25 | |||
| $87,500 to $89,999 | 984 | 0.86 | |||
| $90,000 to $92,499 | 1,282 | 1.13 | |||
| $92,500 to $94,999 | 917 | 0.81 | |||
| $95,000 to $97,499 | 1,023 | 0.90 | |||
| $97,500 to $99,999 | 846 | 0.74 | |||
| $100,000 or more | |||||
| $100,000 to $149,999 | 11,194 | 9.89 | $100k or more 15.82% |
||
| $150,000 to $199,999 | 3,595 | 3.17 | |||
| $200,000 to $249,999 | 1,325 | 1.17 | |||
| $250,000 and above | 1,699 | 1.50 | |||
SOURCE: US Census Bureau, 2005
Quintiles
Households in the United States are often divided into quintiles according to their gross income. The 2005 Current Population Survey conducted by the US Census Bureau determined the following lower limits, and average numbers of income earners per household for each of the American income quintiles. All quintiles had roughly the same number of households, ca. 22,629,000. In addition the top 5%, those with incomes exceeding $157,000 annually, are often shown as a separate group. In 2005 the lower threshold for the top fifth was $88,030, the lower threshhold for the fourth quintile was $55,331, while the bottom quintile consisted of those households with an annual income of less than $18,500.
| Data | All households | Lowest fifth | Second fifth | Middle fifth | Fourth fifth | Highest fifth | Top 5% |
|---|---|---|---|---|---|---|---|
| Households (in 1000s) | 113,146 | 22,629 | 22,629 | 22,629 | 22,629 | 22,629 | 5,695 |
| Lower limit | (X) | (X) | $18,500 | $34,738 | $55,331 | $88,030 | $157,176 |
| Mean number of income earners | 1 | 0 | 1 | 1 | 2 | 2 | 2 |
SOURCE: US Census Bureau, 2004
Type of household
There is a strong correlation between the type of household, the manner of living arrangement and household income. Families, especially those with two income earners outearned non-family households. As one would expect, homeowners also outearned renters. Yet nearly half of all households in the lowest quintile were homeowners. The vast majority of households in the top quintile, 88.35%, were family households. Married couple families with a mean of two income earners constituted 80.8% of all households in the top quintile. In the lowest quintile, on the other hand, family households constituted a less than half, 41.3%, of the total number of households. Consequently, the percentage of non-family households was highest in the lowest quintile with 55.57%. Non-family household only compromised 34.9% of all households in the second lowest quitnile and only 6.31% in the top quintile. Overall over a third of non-family households in the United States, 36.9%, had annual household incomes of less than $25,000 and were thereby part of the bottom quintile. This supports the common belief that families, especially those with two incomes, have far higher annual incomes than non-family households, the majority of whom fall into the lowest two quintiles. Families headed by males with no wife present also had significantly higher incomes than similar households headed by females. While 37.93% of families with a male householder and no wife present had incomes exceeding $55,331 only 21.27% of family households headed by a female had incomes in the top two quintiles.
| Data | All households | Lowest fifth | Second fifth | Middle fifth | Fourth fifth | Highest fifth | Top 5% |
|---|---|---|---|---|---|---|---|
| Households (in 1000s) | 113,146 | 22,629 | 22,629 | 22,629 | 22,629 | 22,629 | 5,695 |
| Lower limit | (X) | (X) | $18,500 | $34,738 | $55,331 | $88,030 | $157,176 |
| Mean number of income earners | 1 | 0 | 1 | 1 | 2 | 2 | 2 |
| Tenure | |||||||
| Owner occupied | 62.4% | 49.0% | 58.8% | 68.9% | 80.5% | 90.0% | 92.8% |
| Renter occupied | 29.2% | 48.3% | 39.7% | 29.9% | 18.7% | 9.6% | 6.9% |
| Type of household (of any race) | |||||||
| Family households | 68.06% | 41.06% | 59.97% | 70.04% | 80.87% | 88.35% | 90.61% |
| Married couple families | 51.35% | 19.03% | 38.89% | 51.00% | 67.05% | 80.08% | 85.59% |
| Single-male family | 4.32% | 3.08% | 4.64% | 5.69% | 4.89% | 3.30% | 2.47% |
| Single-female family | 12.38% | 18.94% | 16.43% | 13.35% | 8.93% | 4.24% | 2.54% |
| Non-family households | 31.93% | 58.92% | 40.02% | 29.96% | 19.12% | 11.64% | 9.36% |
SOURCE: US Census Bureau, 2004
Race
Despite great advances made to lift minorities out of poverty and many African Americans and Latino Americans joining the middle class, there is still an uneven racial distribution among the income quintiles. While White American who were not of Hispanic descent made up roughly 75.1% of all persons in 2000, 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, versus 12.5% of persons identifying themselves as Hispanic or Latino in the general population. 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 idenitified as being African American or Black. Overall households headed by Hispanics and African Americans or Blacks 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. European-Americans 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.
| Race | All households | Lowest fifth | Second fifth | Middle fifth | Fourth fifth | Highest fifth | Top 5% | |
|---|---|---|---|---|---|---|---|---|
| White alone | Number in 1000s | 92,702 | 16,940 | 18,424 | 18,978 | 19,215 | 19,721 | 5,695 |
| Percentage | 81.93% | 74.87% | 81.42% | 83.87% | 84.92% | 87.16% | 87.93% | |
| Asian alone | Number in 1000s | 4,140 | 624 | 593 | 786 | 871 | 1,265 | 366 |
| Percentage | 3.65% | 2.76% | 2.26% | 3.47% | 3.84% | 5.59% | 6.46% | |
| African American or Black | Number in 1000s | 13,792 | 4,474 | 3,339 | 2,637 | 2,053 | 1,287 | 236 |
| Percentage | 12.19% | 19.77% | 14.75% | 11.65% | 9.07% | 5.69% | 1.04% | |
| Hispanic or Latino (of any race) | Number in 1000s | 12,818 | 3,023 | 3,130 | 2,763 | 1,931 | 1,334 | 269 |
| Percentage | 11.33% | 13.56% | 13.83% | 12.20% | 8.53% | 5.89% | 1.19% | |
SOURCE: US Census Bureau, 2004
Education and gender
Household income as well as per capita income in the United States rise significantly as the educational attainment increases. In 2005 graduates with a Master's in Business Administration (MBA) who accepted job offers are expected to earn a base salary of $88,626. They are also expected to receive "…[a]n average signing bonus of $17,428." 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., J.D., D.D.S., or D.V.M.).
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). Higher educational attainment did not, however, help close the income gap between the genders as the life-time earnings for a male with a professionals degree were roughly forty percent (39.59%) higher than those of a female with a professionals degree. The life-time 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, greatly enabling many households with (a) graduate degree householder(s) to enter the top household income quintile.
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. Income also increased substantially with increased post-secondary education. While the median household income for a household with a household holding an Associates degree was $51,970, the median household income for those 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 higher than that for those at the Master's degree level, but $3,170 lower than the median for households with a professionals degree holding householder.
| Criteria | Overall | Less than 9th grade | High school drop-out | High school graduate | Some college | Associates degree | Bachelor's degree | Bachelor's degree or more | Master's degree | Professional degree | Doctorate degree | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Median individual income | Male, 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 | |
| Median 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
The change in median personal and household since 1991 also varied greatly with educational attainment. While, both the overall median personal and household icome increased since 1991, this increase did not take place on all levels of educational attainment. The overall income increased over the course of the 1990s, reaching its high in 1999, but decreasing has been ever since. In 1991 the median household income in the US was $40,873 in 2003 dollars, while the median household income in 2003 was $45,016. In 1999, however, the median household income was $46,236, 2.7% higher than today. While this trend held true for all levels of educational attainment the extend of chorinical falcutations in income were greatly influenced by educational attainment. Overall the median household and personal income decreased for those with more than a 9th grade education but less than a four-year college degree since 1991. In other words, the median household income decreased for households and individuals at the high school drop-outs and graduate, some-college, and an Associates degree level. Income did, however, increase for those with a Bachelor's degree or more. 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.
| Year | Overall Median | Less than 9th grade | High school drop-out | High school graduate | Some college | Associates degree | Bachelor's degree | Bachelor's degree or more | Master's degree | Professional degree | Doctorate 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 | $45,300 | $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 | $51,970 | $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. The highest median household income was found among households headed by working baby-boomers. 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 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 compromised of those household 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.
Aggregate income distribution
The aggregate income measures the combined income earned by all persons in a particular income group. Overall all households in the United States earned roughly $4,286,391 million in 2005 (4.3 trillion). Roughly one third, 32.5%, of all income in the US was earned by those households with an income over $150,000, approximately the top five percent. Approximately one fifth, 20.58%, of all income was earned by the top 2.67%, those households earning more than $200,000 a year. Overall the aggregate income distributing tilts toward the top, despite the fact that households with middle-range annual incomes ranging from $50,000 to $75,000 earned roughly one fourth, 25.11% of all income. As the percentage of middle-range income households is roughly one-fourth of the population, this particular income group's share of income is roughly equal to their representation in the general population. The bottom 6.37%, however only earned 0.27% of all income.
| Aggregate income distribution, 2005 | |||||||||||||||||||||||||||||||||||||||
| Percentage of the total income earned by each income group | |||||||||||||||||||||||||||||||||||||||
| 10% | 20% | 30% | 40% | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| less than $25,000 | 6.76% | ||||||||||||||||||||||||||||||||||||||
| $25,000 to $50,000 | 18.12% | ||||||||||||||||||||||||||||||||||||||
| $50,000 to $75,000 | 22.54% | ||||||||||||||||||||||||||||||||||||||
| $75,000 to $100,000 | 20.00% | ||||||||||||||||||||||||||||||||||||||
| $150,000 or more | 32.58% | ||||||||||||||||||||||||||||||||||||||
SOURCE: US Census Bureau, 2005
Household income over time
Please note that all figures are presented in 2003 dollars.
Since 1967, the median household income in the United States has risen modestly, fluctuating several times. Even though personal income has risen substantially and 42% of all household now have two income earners, the median household income has increased only slightly. According to the US Census Bureau, this paradoxial set of trends is due to the changing structure of American households. For example, while the proportion of wives working year-round in married couple households with children has increased fron 17% in 1967 to 39% in 1996, the proportion of such households among the general population has decreased. Thus, while married couple households with children are the most economically prosperous type of household in the United, their share of the population has been dwindeling in the United States. In 1969, more than 40% of all households consisted of a married couple with children. By 1996 only a rough quater of US households consisted of married couples with children. As a result of these changing household demographics, median household income rose only slighly despite an ever increasing female labor force and a considerable increase in the percentage of college graduates.
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"From 1969 to 1996, median household income rose a very modest 6.3 percent in constant dollars... The 1969 to 1996 stagnation in median household income may, in fact, be largely a reflection of changes in the size and composition of households rather than a reflection of a stagnating economy."- John McNeil, US Census Bureau |
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 flactuations were felt across the income strata as the incomes of both, the 95th and 20th percentile were affected by flactuations in the economy. Yet, it is important to note that income in the period between 1967 and 1999 grew 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 quitile) rose by only 28% from $14,002 to $17,984. One should note that ht 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.
| Data | 2003 | 2000 | 1997 | 1994 | 1991 | 1988 | 1985 | 1982 | 1979 | 1976 | 1973 | 1970 | 1967 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 20th percentile | $17,984 | $19,142 | $17,601 | $16,484 | $16,580 | $17,006 | $16,306 | $15,548 | $16,457 | $15,615 | $15,844 | $15,126 | $14,002 |
| Median (50th) | $43,318 | $44,853 | $42,294 | $39,613 | $39,679 | $40,678 | $38,510 | $36,811 | $38,649 | $36,155 | $37,700 | $35,832 | $33,338 |
| 80th percentile | $86,867 | $87,341 | $81,719 | $77,154 | $74,759 | $75,593 | $71,433 | $66,920 | $68,318 | $63,247 | $64,500 | $60,148 | $55,265 |
| 95th percentile | $154,120 | $155,121 | $144,636 | $134,835 | $126,969 | $127,958 | $119,459 | $111,516 | $111,445 | $100,839 | $102,243 | $95,090 | $88,678 |
SOURCE: US Census Bureau, 2004 (Page 44/45)
International comparison
While many industrialized countries of similar wealth as the United States such as Germany, Denmark, or Norway do not offer median household income statistics, England and Canada do use a comparable measure of median household income. Yet another difficulty one needs to consider in international comparisions is the varing exchange rate of currencies. For example while 79 Euro cents (0.79 Euros) equal roughly 100 US dollar cents (1 US dollar) on September 13, 2006 the exchange rate might look different on another date. Of course the actual standard of living and of an individual is not well reflected in converted amounts as domestic purchasing power does not change with currency fluctuation for the differences in exchange rates. In other words the median households income of a household in the European Union did not increase in comparison to the American median household income, despite the Euro now being valued higher than the dollar. One can, however, use converted income amounts to give a rough idea of the median household income in foreign countires as compared to that of the United States.
In Canada and rural England the median household income was roughly the same as in the United States. In Canada the median household income was determined to be roughly $41,000 according to the exchange rate in early July 2006. In the fiscal year 2004/05 the median household income in rural England was determined to be £20,600, the highest of any region in the United Kingdom. On September 13, 2006 this amount equalled roughly $39,000. While the median household income in England was overall slightly lower than in the United States, one exception was London where the mean (not median) household income was £38,586 or $72,330. One again needs to remember that these comparions are more than rough due to the nature of currency conversion. Furthermore due to the implications caused by difference between the income distribution in "wellfare states" such as England and Canada, are not considered. Again these figures give only a rough idea as they may change dramatically with the manner in which currencies are converted.
However, when using PPP converted statistics, through the Big Mac Index, one will see that the pound in reality should be at $1.63 according to the latest index . Thus, when using the same statistics above, the real median household income for urban England is actually $28,832, while the rural income is $32,960. Compared with households in the U.S. (with a median household income of $46,300), English households are not nearly as wealthy as their U.S. counterparts. Urban English households (using the above statistics) are 38% less wealthy, while rural English households are 29% less wealthy. London's mean household income is $61,737 using PPP, which is very similar to the U.S. mean household income. In fact, The median (not mean) income of New Jersey is roughly $61,672 . Again it is important that these figures vary dramatically with the manner in which currencies are converted. Yet one can conclude that the household income in the United States is slightly higher than that of Canada and quite a bit higher than that of England.
Income by state
The median household income by state ranged from $32,589 or 26.7% below national median, in West Virginia to $57,352 or 29% above national median, in New Hampshire. Connecticut, which is often referred to as the nation's wealthiest state, came in at number four with a median household income of $55,970. California which had the highest median home price in the nation. where home prices have far outpaced incomes only ranked number thirteen with a median household income of $49,894. While California's median income was not near enough to afford the average California home or even a starter home, West Virginia, which had the nation's lowest median household income also had the nation's lowest median home price. The northeastern states, more specifically those located in New England, as well as the western states had the highest median household income. Of the top fifteen states, all were located in the Northeast and West, with the sole exception of Minnesota which ranked fifth. The southern states had the by far lowest median household income with nine out of the country's fifteen poorest states being located in the South. It should be noted, however, that New York, Pennsylvania and the District of Columbia also fell below the national median. Overall, median household income tended to be the highest in nation's most urbanized northeastern, north mid-western and western States, while rural and mostly southern states had the lowest median household income.
| State | Rank | Median household income | +/- national average | Change 1999-2005 (inflation adjusted) |
|---|---|---|---|---|
| New Hampshire | 1 | 57,352 | +12,879 | -2% |
| New Jersey | 2 | 56,772 | +12,299 | -4.5% |
| Maryland | 3 | 56,763 | +12,290 | -0.5% |
| Connecticut | 4 | 55,970 | +11,497 | -3.5% |
| Minnesota | 5 | 55,914 | +11,441 | -5.7% |
| Alaska | 6 | 54,627 | +10,154 | -6.9% |
| Virginia | 7 | 53,275 | +8,802 | -0.8% |
| Hawaii | 8 | 53,123 | +8,650 | -0.4% |
| Massachusetts | 9 | 52,354 | +7,881 | -3.3% |
| Colorado | 10 | 51,022 | +6,549 | -8.4% |
| Utah | 11 | 50,614 | +5,691 | -10.5% |
| Delaware | 12 | 50,152 | +5,679 | -5.4% |
| California | 13 | 49,894 | +5,421 | -3.6% |
| Washington | 14 | 48,688 | +4,215 | -8.1% |
| Wisconsin | 15 | 47,220 | +2,747 | -8.2% |
| Nevada | 16 | 46,984 | +2,511 | -5.8% |
| Rhode Island | 17 | 46,199 | +1,726 | +4.4% |
| Illinois | 18 | 45,787 | +1,314 | -7.9% |
| Vermont | 19 | 45,692 | +1,219 | -4.5% |
| Nebraska | 20 | 44,623 | +150 | -4.6% |
| Michigan | 21 | 44,476 | +3 | -12% |
| United States national average ($44,473) -6% | ||||
| Pennsylvania | 22 | 44,286 | -187 | -5.2% |
| New York | 23 | 44,228 | -245 | -2.7% |
| Ohio | 24 | 44,160 | -313 | -9.3% |
| Missouri | 25 | 43,988 | -485 | -5.5% |
| Kansas | 26 | 43,725 | -748 | -9.8% |
| Wyoming | 27 | 43,641 | -832 | +4.1% |
| Georgia | 28 | 43,217 | -1,256 | -8.3% |
| Iowa | 29 | 43,042 | -1,431 | -5.7% |
| District of Columbia | 30 | 43,003 | -1,470 | +0.5% |
| Indiana | 30 | 43,003 | -1,470 | -9.7% |
| Oregon | 31 | 42,617 | -1,856 | -10.4% |
| Arizona | 32 | 42,590 | -1,883 | -6.8% |
| Idaho | 33 | 42,519 | -1,954 | -5.8% |
| Texas | 34 | 41,275 | -3,198 | -9.9% |
| South Dakota | 35 | 40,518 | -3,955 | -2.5% |
| Florida | 36 | 40,171 | -4,302 | -6.7% |
| North Dakota | 37 | 39,594 | -4,879 | +1.2% |
| Maine | 38 | 39,395 | -5,078 | -1.9% |
| South Carolina | 39 | 39,326 | -5,147 | -9.5% |
| North Carolina | 40 | 39,000 | -5,473 | -11.3% |
| Tennessee | 41 | 38,550 | -5,923 | -8.7% |
| Oklahoma | 42 | 38,281 | -6,192 | -5.3% |
| Alabama | 43 | 38,111 | -6,362 | -7.8% |
| New Mexico | 44 | 37,587 | -6,886 | -6.2% |
| Kentucky | 45 | 37,396 | -7,077 | -5.3% |
| Louisiana | 46 | 35,523 | -8,950 | -3.7% |
| Montana | 47 | 35,201 | -9,272 | +1.6% |
| Arkansas | 48 | 33,948 | -10,525 | -7.2% |
| Mississippi | 49 | 33,659 | -10,814 | -10.3% |
| West Virginia | 50 | 32,589 | -11,884 | -3.8% |
SOURCE: US Census Bureau, 2004/05
Mean income
Another common measurement of personal income is the mean household income. Unlike the median household income which is the 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. The mean income is usually more affected by the relatively unequal distribution of income which tilts towards the top. As a result the mean tends to be higher as 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, $17,210 or 39.73% higher than the median household income.
" Median income is the amount which divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income ( average) is the amount obtained by dividing the total aggregate income of a group by the number of units in that group. The means and medians for households and families are based on all households and families. Means and medians for people are based on people 15 years old and over with income."
-US Census Bureau, Frequently Asked Question, published by First Gov.
The mean household income for households headed by persons identifying as White alone was $65,317, $40,685 for those headed by persons identifying as African American or Black, $45,871 for those headed by persons identifying as Hispanic or Latino, and $76,747 for those households headed by persons identifying as Asian alone. Approximately one third, or 36.5%, of all households earned more than the mean income, while 63.5% earned less than the mean.