As indicated in our advance report on family income, the 7 percent increase in median family income ($12,840) from 1973 to 1974 was less than the rise in prices, resulting in a net loss in real purchasing power. After adjusting for the 11 percent increase in prices between 1973 and 1974/1, the 1974 median decreased by about 4 percent below the 1973 median expressed in terms of constant dollars.
Although the real median income for all families declined between 1973 and 1974, it did not decline for families in which the head worked year round full time. The median income of the latter group was $16,070 in 1974, not significantly different from the 1973 median in real terms.
Both white and black families/2 experienced a decline in real median income between 1973 and 1974. The median income of white families was $13,360 in 1974 a decrease of about 4 percent below their 1973 median when expressed in constant dollars. Similarly, black median family income, estimated at $7,810 in 1974, decreased by approximately 3 percent in real terms, not significantly different than for whites.
Of the 55.7 million families (including families with civilian or military heads) in the United States as of March 1975, 6.4 million or 11.5 percent received incomes of $25,000 or more in 1974. There were 15.8 million families (28.3 percent) with incomes between $15,000 and $25,000; 13.6 million families (24.4 percent) with incomes between $10,000 and $15,000; 12.7 million families (22.7 percent) with incomes between $5,000 and $10,000; and 7.3 million families (13.1 percent) with incomes less than $5,000 in 1974.
1 The percentage increase in prices between 1973 and 1974 is computed by dividing the annual average Consumer Price Index (CPI) for 1974 by the annual average value of the Index for 1973.
2 The decline for black families is statistically significant at the 90 percent confidence level. See section on "Source and Reliability of the Estimates" in the appendix.
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