Household Income in The United States - Household Income Over Time

Household Income Over Time

All figures are in 2003 dollars.

Since 1967, the median household income in the United States has risen by 31%, fluctuating several times. The rise in household income is largely the result of an increase in personal income among college graduates, a group that has doubled in size since the 1960s, and women entering the labor force. Today, 42% of all households have two income earners. Household income increased dramatically faster for affluent households with income inequality having increased steadily since the 1970s.

While household income has increased, its growth has been slowed by a decrease in married-couple households who tend to have two earners and, therefore, higher incomes. While the proportion of wives working year-round in married couple households with children has increased from 17% in 1967 to 39% in 1996, the proportion of such households among the general population has decreased. This means that the share the most economically prosperous type of household has been dwindling in the United States.

In 1969, more than 40% of all households consisted of a married couple with children. By 1996 only a rough quarter of US households consisted of married couples with children. As a result of these changing household demographics, median household income rose relatively slowly despite an ever-increasing female labor force and a considerable increase in the percentage of college graduates.

"From 1969 to 1996, median household income rose a very modest 6.3 percent in constant dollars... The 1969 to 1996 stagnation in median household income may, in fact, be largely a reflection of changes in the size and composition of households rather than a reflection of a stagnating economy."- John McNeil, US Census Bureau

Overall, the median household income rose from $33,338 in 1967 to an all-time high of $44,922 in 1999, and has since decreased slightly to $43,318. Decreases in household income are visible during each recession, while increases are visible during economic upturns. These fluctuations were felt across the income strata as the incomes of both the 95th and 20th percentile were affected by fluctuations in the economy. Income in the period between 1967 and 1999 grew considerably faster among wealthier households than it did among poorer households.

For example the household income for the 80th precentile, the lower threshold for the top quintile, rose from $55,265 in 1967 to $86,867 in 2003, a 57.2% increase. The median household income rose by 30% while the income for the 20th percentile (the lower threshold for the second lowest quintile) rose by only 28% from $14,002 to $17,984. As the majority of households in the top quintile had two income earners, versus zero for the lowest quintile and that the widening gap between the top and lowest quintile may largely be the reflection of changing household demographics including the addition of women to the workforce.

Household demographics are not, however, the cause of the growing gap between the top 5% and the rest of the upper quintile. The top 5% had fewer dual earner households and full-time workers than the top quintile overall. In 2003 a household in the 95th percentile earned 77.2% more than a household in the 80th percentile, compared to 60.5% in 1967, a 27.6% increase in the earnings increase discrepancy between the two groups. Overall the income of the 95th percentile grew 15.2% faster than that of the 80th, 146.8% faster than that of the median and 159.9% faster than that of the 20th percentile.

Households in the top 1% experienced the by far greatest increases in household income. According to economist Janet Yellen "the growth was heavily concentrated at the very tip of the top, that is, the top 1 percent." A 2006 analysis of IRS income data by economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics showed that the share of income held by the top 1% was as large in 2005 as in 1928. The data revealed that reported income increased by 9% in 2005, with the mean for the top 1% increasing by 14% and that for the bottom 90% dropping slightly by 0.6%.

While per-capita disposable income has increased 469% since 1972, it has only increased moderately when inflation is considered. In 1972, disposable personal income was determined to be $4,129; $19,385 in 2005 dollars. In 2005, disposable personal income was, however, $27,640, a 43% increase. Since the late 1990s, household income has fallen slightly.

The following table shows US household income in 2009 constant (CPI-U-RS adjusted) dollars. The final column shows the average change per year from 1976 to 2009.

Percentile	2009	2006	2003	2000	1997	1994	1991	1988
20th	$20,453	$21,314	$20,974	$22,320	$20,520	$19,215	$19,338	$19,830
50th	$49,777	$51,278	$50,519	$52,301	$49,309	$46,175	$46,269	$47,433
80th	$100,000	$103,226	$101,307	$101,884	$95,273	$89,936	$87,173	$88,146
95th	$180,001	$185,119	$179,740	$180,879	$168,626	$157,172	$148,055	$149,207

Percentile	1985	1982	1979	1976	1973	1970	1967	Per Year
20th	$18,898	$17,927	$19,274	$18,526	$18,973	$18,180	$16,845	.30%
50th	$44,898	$43,048	$45,325	$43,483	NA	NA	NA	.41%
80th	$82,843	$77,683	$79,851	$75,648	$77,723	$72,273	$66,481	.85%
95th	$136,881	$128,232	$129,029	$119,967	$124,921	$114,243	$106,684	1.24%