Money Income in the United States: 1997 - Highlights
In 1997, the real 1 median income of U.S. households returned to the peak reached in 1989, the year before the most recent recessionary period (lasting from July 1990 to March 1991). U.S. households began their recovery in median household income in 1995 and since then have experienced significant annual increases in their income.
Subgroups that achieved 2 or surpassed their 1989 income levels in 1997 included White households, households maintained by a person 25 to 34 years old, households maintained by a person 65 years old and over, households outside of metropolitan areas, households in the West, family households, and nonfamily households maintained by a woman. Subgroups that had already achieved their 1989 income level within the past 2 years and continue to sustain or exceed that level include Black households, households in the Midwest and South, households maintained by a person 55 to 64 years old, married-couple households, and family households maintained by women with no husband present. These data are from the March supplement to the Current Population Survey (CPS).
The CPS supplement conducted in March of each year is one of the best known and most widely used of all continuing federal household surveys. For 50 years, analysts, researchers, and policymakers have used the CPS to examine annual changes in income and earnings and to compare those changes with historical trends. Daily news (whether television, radio, or newspaper) frequently details statistics on Americans' jobs, income, poverty status, health insurance coverage, marital status, migration, and so forth based on these data.
(The figures in parentheses denote 90-percent confidence intervals.)
- After 8 years, the median income of households has recovered to its 1989 peak. The median household income in 1997 was $37,005 (+ 281), not statistically different from the 1989 income of $37,303 (+ 339) (in 1997 dollars). (See Tables A and B-2 and Figure 1.)
- Between 1996 and 1997, real median household income increased by 1.9 (+ 0.9) percent, from $36,306 (+ 301) to $37,005 (+ 281). This is the third consecutive year households in the United States experienced an increase in real annual median income. (See Tables A and B-2.)
- For the fourth consecutive year, family households experienced an increase in real median income. Between 1996 and 1997, the median income of family households increased by 2.9 (+ 1.1) percent to $45,347 (+ 388); the change in the income for nonfamily households was not statistically significant. (See Tables A and 1.)
- Most race/Hispanic-origin 3 groups experienced increases in their real median household income between 1996 and 1997. White households experienced an increase of 2.5 (+ 1.1) percent and Black households an increase of 4.3 (+ 3.6) percent. The change in the median income of Asian and Pacific Islander households was not statistically significant. Households maintained by a person of Hispanic origin experienced a 4.5 (+ 3.0) percent increase in their median household income between 1996 and 1997; households maintained by a White, not Hispanic person experienced a 2.3 (+ 1.2) percent increase 4. (See Table A.)
- Three of the four regions experienced a significant increase in real median household income between 1996 and 1997. The median household income of the Midwest increased by 2.4 (+ 2.1) percent, for the South it increased by 3.6 (+ 1.9) percent, and for the West it increased by 3.1 (+ 2.4) percent5 The real median income for households in the Northeast was statistically unchanged. (See Table A.)
- · The real median earnings of both men and women working full time, year round increased between 1996 and 1997. The median earnings of men increased by 2.4 (+ 1.5) percent to $33,674 (+ 526); the median earnings of women increased by 3.0 (+ 1.3) percent to $24,973 (+ 255)6 The female-to-male earnings ratio remained at 0.74 (+ .01) (See Table A and 7.)
- The overall per capita income increased significantly between 1996 and 1997, in real terms, by 3.7 (+ 1.3) percent to $19,241 (+ 196). (See Table A.)
- Based on comparisons of 2-year moving averages (1995-1996 and 1996-1997), real median household income increased significantly for 12 states. Seven of these states ( Alabama, Delaware, Louisiana, North Carolina, Oklahoma, South Carolina, and Virginia) were in the South, two (Indiana and Kansas) were in the Midwest, and three (New Mexico, Utah, and Washington) were in the West. Median household income declined for four states--Hawaii, Iowa, Maine, and Wisconsin. Median household income did not change significantly for any of the remaining states or the District of Columbia. (See Table C.)
- The use of a fully adjusted income definition (one that includes the effects of taxes and noncash benefits) lowered income inequality by 10.0 (+1.1) percent when compared with pre-tax (official) money income. Government transfers have a much more significant effect than taxes on redistributing income. (See Table 12.)
- The change in household median income between 1996 and 1997 using the fully adjusted income definition was 1.6 ( + 0.8) percent compared with 1.9 (+ 0.9) for pre-tax (official) money income.
- Changes in real income refer to comparisons after adjusting for inflation. The percentage changes in prices between earlier years and 1997 were computed by dividing the annual average Consumer Price Index (CPI-U) for 1997 by the annual average for earlier years. See Table B-1 in Appendix B for values of the CPI-U from 1947 to 1997.
- For the purpose of this report, we say that a particular subgroup "achieved" the 1989 pre-recessionary income level (in 1997 dollars) if the difference between the income level for the reference year and that for 1989 is not statistically significant at the 90-percent level of confidence. The difference, or percent change, may be positive or negative.
- People of Hispanic origin may be of any race, therefore data users should use caution in comparing data for Hispanics to data for race groups (such as White, Black and Asian and Pacific Islander).
- The differences were not statistically significant between the 1996-1997 percent increases in median income among White, Black, Hispanic-origin, and White, not Hispanic households.
- The differences were not statistically significant among the 1996-1997 percent increases in median household income for the Midwest, South, and West.
- The difference was not statistically significant between the percent increases in the earnings of men and women.