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Money Income in the United States: 1996 (With Separate Data on Valuation of Noncash Benefits)

Report Number P60-197
Component ID: #ti1582640321

The Current Population Survey (CPS) is probably the best known and most widely used of all continuing federal household surveys. 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 CPS data. For 50 years, analysts, researchers, and policymakers have also used the CPS to examine annual changes in income and earnings and to compare those changes with historical trends. This year’s report shows that the economic status of households continues to improve and that selected subgroups have experienced recent economic gains which have raised their incomes to 1989 pre-recessionary levels.

Introduction

This report presents data on the income of households, families, and persons in the United States for calendar year 1996 and compares them with those for 1995. The data were compiled from information collected in the March 1997 Current Population Survey (CPS) conducted by the U.S. Census Bureau. The survey consisted of approximately 50,000 households nationwide.

Component ID: #ti498922704

Highlights

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

  • For the second consecutive year, households in the United States experienced an increase in annual real/1 median income. Median household income increased by 1.2 (± 1.0) percent between 1995 and 1996, from $35,082 (± 334) to $35,492 (± 295). (See Table A.)
  • For the third consecutive year, family households experienced an increase in real median income—for nonfamily households it is the second consecutive year of increase. Between 1995 and 1996, the median income of family households increased by 1.5 (± 1.0) percent to $43,082 (± 413); for nonfamily households the increase was 2.2 (± 2.0) percent to $20,973 (± 337).2 (See Table A.)
  • Households maintained by a person of Hispanic origin experienced a 5.8 (± 3.4) percent increase in real median household income, going from $23,535 (± 844) in 1995 to $24,906 (± 793) in 1996. The changes in real median household income of White, Black, and Asian and Pacific Islander households were not statistically significant. (See Table A.)
  • The South was the only region to experience a significant year-to-year change in real median household income between 1995 and 1996. In 1996, the median income of Southern households was $32,422 (± 474) compared with $31,856 (± 434) in 1995. (See Table A.)
  • The real median earnings of women who worked full time, year round increased by 2.4 (± 1.3) percent between 1995 and 1996 from $23,161 (± 232) to $23,710 (± 273). In contrast, the median earnings of men who worked full time, year round declined by 0.9 (± 0.7) percent, going from $32,426 (± 194) to $32,144 (± 188). (See Table A.) These contrasting changes in earnings brought the female-to-male earnings ratio to an all time high—in 1996, the median earnings for women represented about 74 (± 1.0) percent of the median for men.
  • Per capita income increased significantly between 1995 and 1996, in real terms, for all but one of the race/ethnic groups. The per capita income of Whites, Blacks, and Hispanics increased by 1.8 (± 1.3) percent, 5.2 (± 4.0) percent, and 4.9 (± 4.2) percent, respectively.3 The 1996 per capita income of Asians and Pacific Islanders remained statistically unchanged. (See Table A.)
  • This is the third consecutive year in which there was no year-to-year change in overall income inequality. (See appendix Table B-3.)
  • Based on comparisons of two-year moving averages, real median household income increased significantly for nine states—Alaska, Illinois, Indiana, Kentucky, Minnesota, New York, North Carolina, Rhode Island, and South Carolina. Median household income declined for three states—New Mexico, Vermont, and Wyoming. 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 11.0 (± 1.1) percent when compared with pre-tax (official) money income. Government transfers have a much more significant effect than taxes on redistributing income.
  • The change in household median income between 1995 and 1996 using the fully adjusted income definition was 0.7 (± 0.8) percent, compared with 1.2 (± 1.0) percent for pre-tax (official) money income.

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1 Changes in real income refer to comparisons after adjusting for inflation. The percentage changes in prices between earlier years and 1996 were computed by dividing the annual average Consumer Price Index (CPI-U) for 1996 by the annual average for earlier years. See Table B-1 in Appendix B for values of the CPI-U from 1947 to 1996.
2 The difference between the percentage changes in median household income between 1995 and 1996 for family and nonfamily households was not statistically significant.
3 The differences between the 1995-1996 percentage changes in per capita income among the race/ethnic origin groups were not statistically significant.

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