Median household income

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Median income is the amount that 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.

Household income is not to be confused with family or personal income. Household income is often the combination of two income earners pooling the resources and should therefore not be confused with an individual's earnings.

OECD Statistics[edit]

The annual median equivalised disposable household income for selected countries is shown in the table below. This is what each equivalent adult in a household in the middle of the income distribution earns in a year.

Data are in United States dollars at current prices and current purchasing power parity for private consumption for the reference year.

Rank Country Median income (US$, PPP)[1] Median income (US$, nominal) Year[2]
1  Luxembourg 36,415 47,936 2010
2  Norway 32,502 52,575 2010
3   Switzerland 30,897 47,237 2009
4  United States* 29,056 29,056 2010
5  Canada 27,752 34,929 2010
6  Austria 27,745 31,357 2010
7  Australia 27,092 38,570 2010
8  Denmark 26,318 39,742 2010
9  Netherlands 25,121 29,155 2010
10  Sweden 24,787 31,878 2010
11  Iceland 24,535 27,748 2010
12  Germany 24,426 27,213 2010
13  Belgium 24,420 29,221 2010
14  Finland 24,035 31,482 2010
15  France 23,492 27,835 2010
16  South Korea 21,916 18,035 2011
17  United Kingdom 21,750 25,237 2010
18  Ireland 21,681 30,287 2009
19  Italy 21,530 23,451 2010
20  New Zealand 21,472 21,462 2009
21  Japan 19,974 26,671 2009
22  Slovenia 19,401 17,971 2010
23  Spain 17,834 18,531 2010
24  Greece 15,563 15,823 2010
25  Israel 15,545 18,125 2010
26  Czech Republic 13,829 11,091 2010
27  Portugal 13,182 12,400 2010
28  Slovakia 12,904 9,758 2010
29  Poland 11,983 7,785 2010
30  Estonia 10,218 8,224 2010
31  Russia 9,383 5,690 2008
32  Hungary 9,087 6,374 2009
33  Chile 8,647 6,618 2011
34  Turkey 6,832 4,835 2009
35  Mexico 4,384 3,086 2010
  • Based on analysis of the CPS data, US median household income was under-counted by a ratio of 83%, thus making median income $35,007 but for the undercounting.[3]

Median household income and the US economy[edit]

This graph shows the income of the given racial and ethnic groups, in 2011 dollars.[4]

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%,[5] while median household income has only increased by 15%. An economic recession will normally cause household incomes to decrease, often by as much as 10% (Figure 1).

Median household income is a politically sensitive indicator. Voters can be critical of their government if they perceive that their cost of living is rising faster than their income. Figure 1 shows how American incomes have changed since 1970. The last recession was the early 2000s recession and was started with the bursting of the dot-com bubble. It affected most advanced economies including the European Union, Japan and the United States.

The current crisis began with the bursting of the U.S. housing bubble, which caused a problem in the dangerously exposed sub prime-mortgage market. This in turn has triggered a global financial crisis. In constant price, 2011 American median household income is 1.13% lower than what it was in 1989. This corresponds to a 0.05% annual decrease over a 22-year period.[6] In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.[7]

A comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below.[8][9]

Median Equivalised Income VS GDP per Capita

See also[edit]

References[edit]

  1. ^ http://stats.oecd.org/Index.aspx?DataSetCode=IDD
  2. ^ "OECD Statistics". OECD. Retrieved 2013-05-15. 
  3. ^ http://www.nber.org/chapters/c12828.pdf
  4. ^ DeNavas-Walt, Carmen; Proctor, Bernadette D.; Smith, Jessica C. (September 2012). "Real Median Household Income by Race and Hispanic Origin: 1967 to 2010". Income, Poverty, and Health Insurance Coverage in the United States: 2011. U.S. Census Bureau. p. 8. 
  5. ^ IMF.org
  6. ^ Census.gov
  7. ^ [1]
  8. ^ "OECD(2011), Society at a Glance 2011 - OECD Social Indicators". OECD. Retrieved 12 March 2012. 
  9. ^ "World Economic Outlook database October 2007". International Monetary Fund. Retrieved 12 March 2012.