Median 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.

Median income can be calculated by household income, by personal income, or for specific demographic groups.

Gallup gross median household income[edit]

In 2013, Gallup published a list of countries with median household income, based on a self-reported survey of approximately 1000 adults from each country.[1] Using median, rather than mean income, results in a much more accurate picture of the typical 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 do not take taxes and social contributions into account.[1]

* Other sources claim that 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.[2] A study on the Census income data claims that when correcting for underreporting, U.S. gross median household income was $58,997 between 2006 and 2010 (table 3).[3]

Median equivalent adult income[edit]

The annual median equivalence disposable household income for selected OECD 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
1  Luxembourg 38,502 2012
2  Norway 35,528 2012
3   Switzerland 35,083 2012
4  United States* 30,616 2013
5  Australia 29,875 2012
6  Austria 28,736 2012
7  Canada 28,288 2011
8  Denmark 27,304 2012
9  Belgium 27,195 2012
10  Sweden 27,167 2012
11  Iceland 27,029 2012
12  Netherlands 26,440 2013
13  Finland 25,730 2013
14  Germany 25,528 2012
15  France 24,233 2012
16  New Zealand 23,422 2012
17  Ireland 22,018 2012
18  South Korea 21,916 2011
19  United Kingdom 21,033 2012
20  Italy 20,874 2012
21  Slovenia 19,981 2012
22  Japan 19,967 2009
23  Spain 19,684 2012
24  Israel 18,032 2013
25  Czech Republic 15,055 2012
26  Portugal 14,101 2012
27  Slovakia 13,920 2012
28  Poland 13,248 2012
29  Greece 12,217 2012
30  Estonia 11,947 2012
31  Hungary 11,927 2014
32  Russia 10,746 2010
33  Turkey 8,575 2012
34  Chile 8,540 2011
35  Mexico 4,910 2012

* Other sources claim that based on analysis of the CPS data, US median household income has been consistently under-counted by a ratio of 83-85% (mean undercounted by 75%). Other analyses have claimed varying rates of quality among countries; For example, Norway, Sweden, Denmark, Netherlands, Germany, Austria, and UK all captured 85% or more income as compared to the national accounts (details in link—Appendix 4).[5]

Median household income and the US economy[edit]

This graph shows the income of the given racial and ethnic groups, in 2014 dollars.[6]

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%,[7] 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 Late-2000s recession 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 triggered a global financial crisis. In constant price, 2011 American median household income was 1.13% lower than what it was in 1989. This corresponds to a 0.05% annual decrease over a 22-year period.[8] In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.[9]

A comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below.[10][11]

In 2015, the median household income spiked 5.2 percent, reaching $ 56,000, making it the first annual hike in median household income since the start of the Great Recession.[12]

See also[edit]