Incomes are much lower than you think [View all]
October 2, 2014, 10:31 AM ET
The recently released Census Bureau publication Income and Poverty in the United States: 2013 confirmed the dismal picture presented in the Federal Reserve’s Survey of Consumer Finances that median household income has not recovered from the financial crisis and the Great Recession. The publication also contains fascinating information on the level and distribution of income. The numbers go to the heart of conversations about the “middle class” and the “rich.”
The headline news associated with the release of the new Census data was that poverty had declined. Indeed, the decline in the poverty rate was statistically significant and occurred primarily among children. Not to rain on that parade, but the poverty rate remained 2.0 percentage points higher than in 2007.
Median family income in 2013 according to the Census was $51,939, compared to $56,436 in 2007. The median means that half of households had higher incomes and half had lower ones. The table above presents the thresholds for being in different parts of the income distribution. For example, a household with an income of $150,000 is at the 90th percentile point, or in the top 10% of the income distribution. Even more amazing, a household with an income of $196,000 is at the 95th percentile, or in the top 5%.
The thresholds must be interpreted with caution because households include old and young, urban and rural, coastal and midland, and small and large. Yet, many of those with $150,000 of household income would be quite surprised to know that they are among the richest 10%.
More: http://blogs.marketwatch.com/encore/2014/10/02/incomes-are-much-lower-than-you-think/
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