page_title: Household income in the United States
section_title: Recent trends
hierarchical_section_title: Household income in the United States / Recent trends
caption_attribution_description: English: FRED data showing United States real GDP per capita vs. real median household income. This indicates a trend of increasing income inequality. GDP per capita (a measure of average or mean total income) is not translating to median wage increases, indicating a small fraction of the population is capturing the income increase. Refer to NYT article linked in the file description for similar graph and narrative.
context_page_description: Household income is an economic standard that can be applied to one household, or aggregated across a large group such as a county, city, or the whole country. It is commonly used by the United States government and private institutions to describe a household's economic status or to track economic trends in the US.
  A key measure of household income is the median income, at which half of households have income above that level and half below. The U.S. Census Bureau reports two median household income estimates based on data from two surveys: the Current Population Survey and the American Community Survey. The CPS is the recommended source for national-level estimates, whereas the ACS gives estimates for many geographic levels. According to the CPS, the median household income was $63,179 in 2018. According to the ACS, the U.S. median household income in 2018 was $61,937. Estimates for previous years are given in terms of real income, which have been adjusted for changes to the price of goods and services.
context_section_description: The U.S. Census Bureau reported in September 2017 that real median household income was $59,039 in 2016, exceeding any previous year. This was the fourth consecutive year with a statistically significant increase by their measure.
  Changes in median income reflect several trends: the aging of the population, changing patterns in work and schooling, and the evolving makeup of the American family, as well as long- and short-term trends in the economy itself. For instance, the retirement of the Baby Boom generation should push down overall median income, as more persons enter lower-income retirement. However, analysis of different working age groups indicate a similar pattern of stagnating median income as well.
  Journalist Annie Lowrey wrote in September 2014: "The root causes [of wage stagnation] include technological change, the decline of labor unions, and globalization, economists think, though they disagree sharply on how much to weight each factor. But foreign-produced goods became sharply cheaper, meaning imports climbed and production moved overseas. And computers took over for humans in many manufacturing, clerical, and administrative tasks, eroding middle-class jobs growth and suppressing wages."
  Another line of analysis, known as "total compensation," presents a more complete picture of real wages. The Kaiser Family Foundation conducted a study in 2013 which shows that employer contributions to employee healthcare costs went up 78% from 2003 to 2013. The marketplace has made a trade-off: expanding benefits packages vs. increasing wages.
  Measured relative to GDP, total compensation and its component wages and salaries have been declining since 1970. This indicates a shift in income from labor (persons who derive income from hourly wages and salaries) to capital (persons who derive income via ownership of businesses, land and assets). This trend is common across the developed world, due in part to globalization. Wages and salaries have fallen from approximately 51% GDP in 1970 to 43% GDP in 2013. Total compensation has fallen from approximately 58% GDP in 1970 to 53% GDP in 2013.
  However, as indicated by the charts below, household income has still increased significantly since the late 1970s and early 80s in real terms, partly due to higher individual median wages, and partly due to increased employment of women.
  According to the CBO, between 1979 and 2011, gross median household income, adjusted for inflation, rose from $59,400 to $75,200, or 26.5%. However, once adjusted for household size and looking at taxes from an after-tax perspective, real median household income grew 46%, representing significant growth.
  The following table summarizes real median household income at key recent milestones:
caption: U.S. economic growth is not translating into higher median family incomes. Real GDP per household has typically increased since the year 2000, while real median income per household was below 1999 levels until 2016, indicating a trend of greater income inequality.[12]
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