Standard of living in the United States

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Median Equivalised Household Income and GDP per Capita levels in selected developed nations.
The growth in total US GDP vs median US household income.

The standard of living in the United States is one of the top 20 in the world by the standards economists use as measures of standards of living. Per capita income is high but also less evenly distributed than in most other developed countries; as a result, the United States fares particularly well in measures of average material well being that do not place weight on equality aspects.

Measures[edit]

On comprehensive measures such as the UN Human Development Index the United States is always in the top twenty, currently ranking 3rd. On the Human Poverty Index the United States ranked 17th, one rank below the United Kingdom and one rank above Ireland.[4]

On The Economist's quality-of-life index the United States ranked 13th, in between Finland and Canada, scoring 7.6 out of a possible 10. The highest given score of 8.3 was applied to Ireland. This particular index takes into account a variety of socio-economic variables including GDP per capita, life expectancy, political stability, family life, community life, gender equality, and job security.[5]

The homeownership rate is relatively high compared to other post-industrial nations. In 2005, 69% of Americans resided in their own homes, roughly the same percentage as in the United Kingdom, Belgium, Israel and Canada.[6][7][8] Residents of the United States also enjoy a high access to consumer goods. Americans enjoy more cars and radios per capita than any other nation[9] and more televisions and personal computers per capita than any other nation with more than 200 million people.[10][11]

Change over time[edit]

From the 1930s up until 1980, the average American income (after taxes and inflation) tripled,[12] which translated into higher living standards for the American population.[13][14][15][16][17][18][18][19][20][21][22][23][24][25][26][27][28][29] Between 1949 and 1969, real median family income grew by 99.3%.[30] From 1946 to 1978, the standard of living for the average family more than doubled.[31]

Average family income (in real terms) more than doubled from 1945 up until the 1970s, while unemployment steadily fell until it reached 4% in the Sixties.[32] Between 1949-50 and 1965–66, median family income (in constant 2009 dollars) rose from $25,814 to $43,614,[33] and from 1947 to 1960, consumer spending went up by a full 60%, and for the first time, as noted by Mary P. Ryan, “the majority of Americans would enjoy something called discretionary income, earnings that were secure and substantial enough to permit them to enter sectors of the marketplace that were once reserved for the affluent.”[34]

During the Sixties, median family incomes increased by over 33%, while per capita expenditures on recreation and meals grew by over 40%. From 1959 to 1969, median family income (in 1984 dollars) increased from $19,300 to $26,700.[35] By 1969, 79.6% of all households owned at least one car, 82.6% owned a refrigerator or freezer, 79% owned a black and white television set, 31.9% owned a color television set, and 70% owned a washing machine.[36] Post-war prosperity also resulted in increased leisure time. By 1970, it was estimated that the average workingman in America had 140 days off work each year.[37]

As reported by the OECD in 1980, the American standard of living was the highest among the industrial countries. Out of the 85 million households in the United States, 64% owned their own living quarters, 55% had at least two TV sets, and 51% had more than one vehicle. By 1985, the US per capita income was $11,727, one of the highest among industrialized countries. By the mid-1980s, 98% of all households had a telephone service, 77% a washing machine, 45% a freezer, and 43% a dishwasher.[38] By the 1990s, the average American standard of living was regarded as amongst the highest in the world.[39]

Current[edit]

The median income is $43,318 per household ($26,000 per household member)[1] with 42% of households having two income earners.[40] Meanwhile, the median income of the average American age 25+ was roughly $32,000[2] ($39,000 if only counting those employed full-time between the ages of 25 to 64) in 2005.[3] According to the CIA the gini index which measures income inequality (the higher the less equal the income distribution) was clocked at 45.0 in 2005,[41] compared to 32.0 in the European Union[42] and 28.3 in Germany.[43]

The United States has one of the widest rich-poor gaps of any high-income nation today, and that gap continues to grow.[44] In recent times, some prominent economists including Alan Greenspan have warned that the widening rich-poor gap in the U.S. population is a problem that could undermine and destabilize the country's economy and standard of living stating that "The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself".[45]

Country Austria Belgium Denmark France Ireland Norway Spain Portugal UK United States Israel Canada Russia
Homeownership rate[6] 56% 71% 51% 55% 42% 77% 77% 85% 64% 69% 69% 68%[46] 72%

International rankings[edit]

Index Rank
Human Development Index 3rd out of 172
GDP (PPP) per capita 7th out of 183
GDP (nominal) per capita 9th out of 183
Quality-of-life Index 13th out of 111
Human Poverty Index 17th out of 19

Social class[edit]

Standard of living in the United States varies considerably with socio-economic status. The table below gives a summarization of prominent academic theories on the socio-economic stratification of the United States:

Academic Class Models
Dennis Gilbert, 2002 William Thompson & Joseph Hickey, 2005 Leonard Beeghley, 2004
Class Typical characteristics Class Typical characteristics Class Typical characteristics
Capitalist class (1%) Top-level executives, high-rung politicians, heirs. Ivy League education common. Upper class (1%) Top-level executives, celebrities, heirs; income of $500,000+ common. Ivy league education common. The super-rich (0.9%) Multi-millionaires whose incomes commonly exceed $350,000; includes celebrities and powerful executives/politicians. Ivy League education common.
Upper middle class[1] (15%) Highly-educated (often with graduate degrees), most commonly salaried, professionals and middle management with large work autonomy. Upper middle class[1] (15%) Highly-educated (often with graduate degrees) professionals & managers with household incomes varying from the high 5-figure range to commonly above $100,000. The Rich (5%) Households with net worth of $1 million or more; largely in the form of home equity. Generally have college degrees.
Middle class (plurality/
majority?; ca. 46%)
College-educated workers with considerably higher-than-average incomes and compensation; a man making $57,000 and a woman making $40,000 may be typical.
Lower middle class (30%) Semi-professionals and craftsmen with a roughly average standard of living. Most have some college education and are white-collar. Lower middle class (32%) Semi-professionals and craftsmen with some work autonomy; household incomes commonly range from $35,000 to $75,000. Typically, some college education.
Working class (30%) Clerical and most blue-collar workers whose work is highly routinized. Standard of living varies depending on number of income earners, but is commonly just adequate. High school education.
Working class (32%) Clerical, pink- and blue-collar workers with often low job security; common household incomes range from $16,000 to $30,000. High school education. Working class
(ca. 40–45%)
Blue-collar workers and those whose jobs are highly routinized with low economic security; a man making $40,000 and a woman making $26,000 may be typical. High school education.
Working poor (13%) Service, low-rung clerical and some blue-collar workers. High economic insecurity and risk of poverty. Some high school education.
Lower class (ca. 14–20%) Those who occupy poorly-paid positions or rely on government transfers. Some high school education.
Underclass (12%) Those with limited or no participation in the labor force. Reliant on government transfers. Some high school education. The poor (ca. 12%) Those living below the poverty line with limited to no participation in the labor force; a household income of $18,000 may be typical. Some high school education.
References: Gilbert, D. (2002) The American Class Structure: In An Age of Growing Inequality. Belmont, CA: Wadsworth; Thompson, W. & Hickey, J. (2005). Society in Focus. Boston, MA: Pearson, Allyn & Bacon; Beeghley, L. (2004). The Structure of Social Stratification in the United States. Boston, MA: Pearson, Allyn & Bacon.
1 The upper middle class may also be referred to as "Professional class" Ehrenreich, B. (1989). The Inner Life of the Middle Class. NY, NY: Harper-Colins.


See also[edit]

General:

References[edit]

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