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.

Gallup gross median household income[edit]

In 2013, Gallup published a list of countries with median household income.[1] Using median, rather than mean income, results in a much more accurate picture of the average income of the middle class since the data will not be skewed by gains and abnormalities in the extreme ends. The figures are in international dollars using purchasing power parity and are based on responses from at least 2,000 adults in each country, with the data aggregated from 2006 to 2012. Below is a list of the top 30 countries. The figures are before deduction of taxes and social contributions and not adjusted for household size.[citation needed]

  • Based on analysis on US median household income, median household money income during the 2006-2012 period averaged $53,836, therefore by comparison the Gallup result is underreported and is even below the Census' own figures. [3]

OECD Statistics[edit]

The annual median equivalence disposable household income for selected countries is shown in the table below. This is the disposable income of an equivalent adult in a household in the middle of the income distribution 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)[4] Year[5]
1  Luxembourg 37,178 2011
2  Norway 33,928 2011
3   Switzerland 33,669 2011
4  United States 30,932* 2012
5  Australia 29,993 2012
6  Austria 28,495 2011
7  Canada 28,404 2011
8  Sweden 26,644 2011
9  Denmark 26,421 2011
10  Finland 25,864 2012
11  Netherlands 25,487 2012
12  Germany 24,623 2011
13  Iceland 24,499 2011
14  Belgium 24,408 2010
15  France 24,233 2011
16  South Korea 23,236 2012
17  New Zealand 22,722 2011
18  Ireland 22,101 2011
19  United Kingdom 21,470 2011
20  Italy 21,444 2011
21  Slovenia 19,994 2011
22  Japan 19,974 2009
23  Spain 17,191 2011
24  Israel 16,260 2011
25  Slovakia 14,351 2011
26  Czech Republic 14,189 2011
27  Greece 13,366 2011
28  Portugal 13,116 2011
29  Poland 12,615 2011
30  Estonia 10,837 2011
31  Russia 10,765 2010
32  Hungary 10,476 2012
33  Chile 8,540 2011
34  Turkey 7,958 2011
35  Mexico 4,508 2012
  • Based on analysis of the CPS data, US median household income (based on "cash income" definition) has been consistently underestimated by a ratio of 83-85% (mean under-counted by 75%), thus making "true" median income $37,228-$38,272 but-for the undercounting.[6] Other analysis has shown varying mean rates of quality among countries; For example, Norway, Sweden, Denmark, Netherlands, Germany, Austria, and UK all captured a mean of 85% or more income as compared to the national accounts (details in link—Appendix 4).[7]

Median household income and the US economy[edit]

This graph shows the income of the given racial and ethnic groups, in 2011 dollars.[8]

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%,[9] 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.[10] In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.[11]

A comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below.[12][13]

See also[edit]