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Income, Poverty, and Valuation of Noncash Benefits: 1994

Report Number P60-189
Component ID: #ti524220240

Introduction

This report presents data on the income and poverty status of households, families, and persons in the United States for the calendar year 1994. These data were compiled from information collected in the March 1995 Current Population Survey (CPS) conducted by the Bureau of the Census. The survey consisted of approximately 60,000 households nationwide.

This report begins with a highlight section then follows with sections discussing household income; earnings of year-round, full-time workers; per capita income; income inequality; and State income estimates. Poverty data follows and are cross-classified by various demographic characteristics such as age, race, Hispanic origin, and family relationship, including poverty estimates for States. The report concludes with a section entitled Valuation of Noncash Benefits, which examines the effects of taxes, government transfers, and various noncash benefits on income and poverty estimates under 18 alternative (experimental) definitions of income.

The official income and poverty estimates are based solely on money income before taxes and do not include the value of noncash benefits such as food stamps, medicare, medicaid, public housing, and employer-provided fringe benefits. The Valuation of Noncash Benefits section of this report discusses the effect of taxes and noncash benefits on income and poverty. These data were also derived from information collected in the March 1995 CPS along with data from other sources including the Internal Revenue Service, the Department of Agriculture, the Bureau of Labor Statistics, and the Health Care Financing Administration.

Component ID: #ti251297195

Highlights

(The figures in parentheses denote 90-percent confidence intervals.)

Income

  • The median income of households in the United States, $32,264 (± 240), did not change significantly in real terms between 1993 and 1994 and has not yet recovered to its 1989 prerecessionary peak of $34,445 (± 312) (in 1994 dollars).2
  • Households in the South experienced a 2.9 (± 1.8) percent increase in median household income, in real terms, between 1993 and 1994. The median household incomes of the other three regions did not change significantly. Households in the South continue to have the lowest median income among the four regions.
  • Family households experienced an increase of 2.5 (± 1.1) percent in real median income between 1993 and 1994; nonfamily households experienced a decline of 2.1 (± 2.1) percent.
  • Married-couple family households experienced a 1.8 (± 1.1) percent increase in real median income between 1993 and 1994, and family households maintained by women with no husband present experienced a 4.5 (± 3.2) percent increase in income.
  • Black households experienced a 5.0 (± 3.8) percent increase in real median income between 1993 and 1994, the only racial group showing a significant change.
  • The per capita income for all persons increased by 2.3 (± 1.2) percent between 1993 and 1994 (after adjusting for inflation). Increases were also evident for the White population, 2.2 (± 1.4) percent, and for the Black population, 5.3 (± 3.5) percent. The per capita income for the Asian and Pacific Islander and Hispanic origin populations remained unchanged.
  • The shares of aggregate household income received by quintiles of households were unchanged in 1994 when compared to 1993. In 1994, the share received by the lowest quintile was 3.6 percent; the second, 8.9 percent; the third, 15.0 percent; the fourth, 23.4 percent; and the top quintile, 49.1 percent.

Poverty

  • The number of persons below the official government poverty level was 38.1 (±0.9) million in 1994, a figure 1.2 million lower than the 39.3 (±0.9) million poor in 1993.
  • The poverty rate was 14.5 (±0.3) percent in 1994, significantly lower than the 15.1 (±0.3) percent poverty rate in 1993.
  • While the poverty rate of 21.8 (±0.7) percent for persons under 18 years old in 1994 remained higher than that of other age groups, this was significantly lower than the 1993 rate of 22.7 (±0.7) percent.
  • Poverty rates dropped between 1993 and 1994 for Whites and Blacks but showed no significant change for persons of Hispanic origin or Asians and Pacific Islanders. While the number of poor Blacks dropped significantly between 1993 and 1994, the number of poor Hispanics showed a significant increase.
  • There was a significant decrease in both the rate and the number of poor families between 1993 and 1994. In 1994, there were 8.1 (±0.3) million poor families, resulting in a poverty rate of 11.6 (±0.3) percent.
  • In 1994, 40.8 (±1.6) percent of poor persons 16 years old and over worked, and 10.5 (±1.0) percent worked year-round, full-time. The number of poor persons in these categories remained unchanged between 1993 and 1994.
  • The South was the only region with a statistically significant decline in its poverty rate, from 17.1 (±0.6) percent in 1993 to 16.1 (±0.6) percent in 1994. Unlike previous years in which the South had the highest regional poverty rate, the West, with a rate of 15.3 (±0.8) percent, was not significantly different from the South in 1994.

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2 Changes in real income refer to comparisons after adjusting for inflation. The percentage changes in prices between earlier years and 1994 were computed by dividing the annual average Consumer Price Index (CPI-U-X1) for 1994 by the annual average for earlier years. See table A-1 in appendix A for the CPI-U-X1’s from 1947 to 1994.

 

NOTE: During the period April 1994 through June 1995, the Bureau of the Census systematically introduced a new sample design for the Current Population Survey (CPS) based on the results of the 1990 Decennial Census. During this phase-in-period, CPS estimates were being made from two distinct sample designs, the old 1980 sample design and the new 1990 sample design. The March 1995 CPS consisted of 55 percent new (1990) sample and 45 percent old (1980) sample. Since overlap in the sample design does not permit the development of estimates for metropolitan/non-metropolitan categories that are comparable to either the 1980 or 1990 census definitions, estimates of these categories have been omitted from this report. Some CPS estimates are thought to be more affected by this mixed sample than others. For example, it is thought that racial and ethnic subgroup estimates are subject to greater error and variability. The causes of this variability are differences in coverage, errors in geographic recoding, and changes in CPS sample areas. The Census Bureau recommends that users exercise caution when analyzing data using these or related variables during this period.

 

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