Household income in the United States

A key measure of household income is the median income, at which half of households have income above that level and half below. The U.S. Census Bureau reports two median household income estimates based on data from two surveys: the Current Population Survey (CPS) Annual Social and Economic Supplement and the American Community Survey (ACS). The CPS ASEC is the recommended source for national-level estimates, whereas the ACS gives estimates for many geographic levels.^{[2]: 19 [3]: 10  [4]}According to the CPS, the median household income was $70,784 in 2021.^[5][2] According to the ACS, the U.S. median household income in 2018 was $61,937.^[3] Estimates for previous years are given in terms of real income, which have been adjusted for changes to the price of goods and services.


The distribution of U.S. household income has become more unequal since around 1980, with the income share received by the top 1% trending upward from around 10% or less over the 1953–1981 period to over 20% by 2007.^[6] Since the end of the Great Recession, income inequality in the US has gone down slightly, and at an accelerated pace since 2019.^{[7] [8]}

Definition[edit]

A household's income can be calculated in various ways but the US Census as of 2009 measured it in the following manner: the income of every resident of that house that is over the age of 15, including pre-tax wages and salaries, along with any pre-tax personal business, investment, or other recurring sources of income, as well as any kind of governmental entitlement such as unemployment insurance, social security, disability payments or child support payments received.^[9]


The residents of the household do not have to be related to the head of the household for their earnings to be considered part of the household's income.^[10] As households tend to share a similar economic context, the use of household income remains among the most widely accepted measures of income. That the size of a household is not commonly taken into account in such measures may distort any analysis of fluctuations within or among the household income categories, and may render direct comparisons between quintiles difficult or even impossible.^[11] The US Census does not include noncash benefits such as health benefits.^[12]

Uses[edit]

Use of individual household income: The government and organizations may look at one particular household's income to decide if a person is eligible for certain programs, such as nutrition assistance^[21] or need-based financial aid,^[22] among many others.


Use at the aggregate level: Summaries of household incomes across groups of people – often the entire country – are also studied as part of economic trends like standard of living and distribution of income and wealth. Household income as an economic measure can be represented as a median, a mean, a distribution, and other ways. Household income can be studied across time, region, education level, race/ethnicity, and many other dimensions. As an indicator of economic trends, it may be studied along with related economic measures such as disposable income, debt, household net worth (which includes debt and investments, durable goods like cars and houses), wealth, and employment statistics.