Money Income in the United States: 1995 - Highlights
The data presented here are from the March 1996 supplement to the CurrentPopulation Survey (CPS), the source of official income estimates. The CPS is asample of approximately 50,000 households nationwide. These data reflect conditionsin calendar year 1995. For almost 50 years, analysts, researchers, and policy makers have used CPS data toexamine annual changes in income and earnings and to compare these changes withhistorical trends. This year's report shows that the economic status of households inthe U.S. is improving and that selected subgroups have experienced recent economicgains which have raised their incomes to 1989 pre-recessionary levels.
Highlights (The figures in parentheses denote 90-percent confidence intervals.)
Official Money Income Estimates
For the first time in 6 years, households in the United States experienced
an annual increase in real median income. Between 1994 and 1995, median household income increased by 2.7 (+/-1.0) percent, from $33,178 (+/-$257) to $34,076 (+/- $324).
The Midwest region was the only region to experience a significant change in real median
household income between 1994 and 1995, increasing from $33,426 (+/- $546) to $35,839 (+/- $586). This is the first annual increase in median household income experienced by the Midwest since 1988.
White and Black households experienced increases in real median income between 1994 and 1995--the income of White households increased by 2.2 (+/- 1.0) percent to $35,766 (+/- $306), for Black households the increase was 3.6 (+/-3.5) percent to $22,393 (+/- $628). In contrast, the median income of Hispanic-origin households declined by 5.1 (+/- 3.6) percent to $22,860 (+/- $819) between 1994 and 1995. The income of Asian and Pacific Islander households in 1995, $40,614 (+/- $1,676), was not significantly different from its 1994 level.
Households located both inside and outside metropolitan areas experienced increases in real median income between 1994 and 1995. Households located inside metropolitan areas
experienced an increase of 2.4 (+/-1.2) percent to $36,079 (+/- $326). Households outside metropolitan areas experienced an increase of 2.9 (+/- 2.8) percent to $27,776 (+/- $661).
The annual real median earnings of women working year round, full time declined $337 or 1.5 (+/- 1.1) percent between 1994 and 1995--going from $22,834 (+/-$193) to $22,497 (+/-$225). The earnings for men working year round, full time, $31,496 (+/- $189), remained unchanged. The female-to-male earnings ratio in 1995 was .71, not statistically different from the all-time high ratio reached in 1990.
Per capita income did not change in real terms between 1994 and 1995 for the total population or for race and Hispanic-origin groups.
There was no change in overall income inequality between 1994 and 1995.
Based on comparisons of 2-year moving averages, real median household income increased significantly for 11 states--Colorado, Illinois, Iowa, Kentucky, Maine, Mississippi, Missouri, Pennsylvania, Tennessee, Texas, and Wisconsin. The remaining 39 States and the District of Columbia showed no significant change.
Valuation of Noncash Benefits
The use of a fully adjusted income definition (one that includes the effect
of taxes and noncash benefits) lowered income inequality by 11.3 (+/-1.0) percent. Government transfers have a much more significant effect than taxes on redistributing income.
The change in household median income between 1994 and 1995 using the fully adjusted
income definition was 2.6 (+/-0.8) percent, not significantly different from the change in official money income.
The use of a definition of income that has been broadened to include the effect of taxes and noncash benefits results in higher Black-to-White and Hispanic-to-White household income ratios.
NOTE: Comparability of the 1995 income data with data from previous CPS years is affected by three changes in survey methodology: (1) completion of phasing in of the 1990 census-based sample design, (2) reduction of the CPS sample by about 7,000 households, and (3) a revised edit and allocation procedure for the race item.
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