What Was The Average Household Income the USA ?

Every year in September, the US Census Bureau reports household income based on the data from two types of surveys. The first is the Current Population Survey (CPS) and the second is the American Community Survey (ACS). The CPS is considered a good source to describe the estimates at the national level, whereas, the ACS is well known for the geographic level estimates. According to the survey that was held in 2020, the average household income in the USA was $97,026, whereas the median household income was mentioned as $67,521.

Types Of Income

The U.S. Census Bureau reports two different types of income i.e. mean and median.

a. Mean

The mean and the average are the same in which all incomes are included in them, which is further divided into the described number of people, which is defined as the half more and half less income level. The mean income is slightly higher than the median because there is a huge gap between the two.

b. Median

The median income is the middle number of the group. Median income more precisely defines the middle earner’s income scale. For instance, an estimate of income represents the middle number. According to the survey of 2020, the Median household income was $67,521, which is a decline of 2.9per cent from the 2019 median of $69,560. This shows a noticeable decline statistically since 2011.

Income level in the US

In the US, the number of people below the poverty line was 34 million in 2019. In 2018, the poverty line decreased by 11.5% while it decreased by 10.5% in 2019 according to the survey. The poverty line is decreasing every year, in 2014 the percentage of the decreased poverty line was 14.5%. However, while taking the comparison from 2018 to 2019, the percentage of 10.5% shows that America had 4.2 million fewer people in poverty than in 2018.

The median income in 2021

In 2021, the median income was about $1,298.50 in the US, which is $67521 yearly. This is considered a good median income, but it depends on the lifestyle and goals of the common masses that either the income is good or not.

Average income from 2000-2021

From 2001 to 2005, the income didn’t increase in the US, although it was a time of economic growth, it didn’t improve income level. The reason behind this is the replacement of technology with human force. Similarly, the financial crisis of 2008 dropped the income level on average. Before the recession, many jobs were created in the area of financial service and construction, but those jobs didn’t offer in 2009. And the low-paying area jobs like retailers or food service providers were common. Employers started to hire people as a freelancer or part-time temporary jobs, instead of full-time workers, which frequently decreased the income level. In 2010, with the help of Congress, the debt was reduced instead of creating jobs. After the dropped down of the labour force, the unemployment rate fell but still, the income level did not increase. However, in 2013, income started to improve after unemployment was reversed. In 2016, average income topped the pre-recession peak. The economy gradually improved in 2019 but fell in 2020 due to the devastating effects of the COVID, BUT recovered in 2021 again.

Conclusion

The U.S. average household income indicates the average American earning of the population. It shows the median but not the mean of the American’s earnings. It is widely calculated how much money is available to spend. When consumers will earn more, they will spend more and the economy will grow more, so consumer spending increases 70 % of the economy. Therefore, economic growth is importantto increase salaries.

What is the salary of the upper class in the US?

In 2016, a research centre defined the upper-class income which is greater than $135,600. However, this level was increased and in 2022 it is estimated at $165,460

How to estimate a middle-class income in the US?

According to Pew Research centre, the middle-class income is estimated as two-thirds to double the median income of Americans. In 2020, it improves the income range of $30,000 to $90,000 for single Americans.