Household income in the United States

The **Household income in the United States** is a measure of current private income commonly used by the United States government and private institutions. To measure the income of a household, the before tax income of all residents over the age of 15 is added together. Most of this is wages and salaries (before withholding and other taxes), but many other forms of income, such as unemployment insurance, disability, child support, etc., are included as well. The people in the household do not have to be related to the householder for their income to be considered part of the household's income. Household income is among the most widely accepted measures as households tend to share a common economic fate. The size of a household which is commonly not considered may off-set gains in household income.

In 2005, the median annual household income according to the US Census Bureau was $46,326, similar 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 about 113,146,000 households in the United States. 17.23% of all households had annual incomes more than $100,000.  12.7% fell below the federal poverty threshold. The bottom 20% earned less than $19,178. The  income distribution tends to tilt towards the top with the top 6.37% earning roughly one third of all income. Those with upper-middle incomes also controlled a large, though declining, share of the total earned income. Households in the top 20%, 77% of which had two income earners, had incomes exceeding $91,705. Households in the mid 20%, with a mean of one income earner per household had incomes between $36,000 and 57,657. Overall the United States followed the trend of other developed nations with a relatively large population of relatively rich households outnumbering the poor. There was large and quite powerful section of households with moderately high middle class incomes

## Income distribution
**SOURCE: US Census Bureau, 2005**

**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 groups. White people 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. 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. 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., D.O., J.D., D.D.S., or D.V.M.).

Considering how education increases the earnings 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 degree 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.

**SOURCE: US Census Bureau, 2003**

The change in median personal and household income since 1991 also varied greatly with educational attainment. While, both the overall median personal and household income 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 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 the median household income was $46,236, 2.7% higher than today.  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. The highest median household income was found among households headed by working baby-boomers.

The median household income rose from $33,338 in 1967 to an all-time high of $44,922 in 1999, and has since fallen slightly to $43,318. Decreases in household income are visible during each recession, while increases are visible during economic upturns. 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 faster among wealthier households than it did among poorer households. The household income for the 80th percentile, 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. 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.

While per-capita, disposable income has increased 469% since 1972 it has only increased moderately when considering inflation. In 1972, disposable personal income was $4,129; $19,385 in 2005 dollars. In 2005, disposable personal income was  $27,640, showing a moderate 43% increase. Since 1990, household income has fallen slightly, but this does not take into account the decrease in average household size.

**SOURCE: US Census Bureau, 2004** 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 median household income varies with race, size of household and geography. The state with the highest median household income in the United States was New Hampshire with $57,352, followed by New Jersey, Maryland and Connecticut, making the Northeastern United States the wealthiest area by income in the entire country. In terms of region the median household income was as follows: "Northeast ($47,994), West ($47,680) and South ($40,773)." Median household income in the Mid-West declined by 2.8% to $44,657. The exception was the Midwest, where income declined 2.8% to $44,657. While median household income has 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, household with 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. In terms of race, Asian-Americans 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. The mean income is usually more affected by the relatively unequal distribution of income which tilts towards the top.

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.

## References
## Other websites 
* Income, Poverty, and Health Insurance Coverage in the United States: 2003
* US Census Bureau's web-site for income statistics
* NPR.org statistics and background on income inequality in the United States