Median income

Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount. Mean income (average) is the amount obtained by dividing the total aggregate income of a group by the number of units in that group.

Median income can be calculated by household income, by personal income, or for specific demographic groups.

Gallup gross median household income

In 2013, Gallup published a list of countries with median household income, based on a self-reported survey of approximately 1000 adults from each country.[1] Using median, rather than mean income, results in a much more accurate picture of the typical income of the middle class since the data will not be skewed by gains and abnormalities in the extreme ends. The figures are in international dollars using purchasing power parity and are based on responses from at least 2,000 adults in each country, with the data aggregated from 2006 to 2012. Below is a list of the top 30 countries. The figures do not take taxes and social contributions into account.[1]

Rank Country/Territory Gross household income
in USD PPP[1]		 Gross per-capita income
in USD PPP[1]
1  Luxembourg 52,493 18,418
2  Norway 51,489 19,308
3  Sweden 50,514 18,632
4  Australia 46,555 15,026
5  Denmark 44,360 18,262
6  United States 43,585* 15,480
7  Canada 41,280 15,181
8  South Korea 40,861 11,350
9  Kuwait 40,854 7,487
10  Netherlands 38,584 14,450
11  New Zealand 35,562 12,147
12  Hong Kong 35,443 9,705
13  Austria 34,911 12,284
14  Finland 34,615 15,725
15  Japan 34,822 10,840
16  Germany 33,333 14,098
17  Taiwan 32,762 6,882
18  Singapore 32,360 7,345
19  United Kingdom 31,617 12,399
20  Belgium 31,112 12,445
21  France 30,364 7,847
22  Israel 26,703 10,189
23  Qatar 26,555 5,117
24  Ireland 25,969 8,656
25  Slovenia 25,085 8,048
26  Saudi Arabia 24,980 4,762
27  Bahrain 24,633 4,778
28  Czech Republic 22,913 7,821
29  Spain 21,959 7,284
30  Italy 20,085 6,874

* Other sources claim that median household money income during the 2006-2012 period averaged $53,836, therefore by comparison the Gallup result is underreported and is even below the Census' own figures.[2] A study on the Census income data claims that when correcting for underreporting, U.S. gross median household income was $58,997 between 2006 and 2010 (table 3).[3]

Median equivalent adult income

The annual median equivalence disposable household income for selected OECD countries is shown in the table below. This is the disposable income of an equivalent adult in a household in the middle of the income distribution in a year.

Data are in United States dollars at current prices and current purchasing power parity for private consumption for the reference year.

Rank Country Median income (US$, PPP)[4] Year
1  Luxembourg 38,516 2013
2  Norway 36,043 2013
3   Switzerland 34,608 2013
4  Australia 31,340 2014
5  United States* 30,960 2014
6  Canada 29,521 2013
7  Austria 29,278 2013
8  Iceland 27,919 2013
9  Denmark 27,157 2013
10  Belgium 26,922 2013
11  Netherlands 26,820 2014
12  Sweden 26,627 2013
13  Finland 25,810 2014
14  Germany 25,140 2013
15  France 24,547 2013
16  New Zealand 23,304 2012
17  Ireland 22,200 2013
18  South Korea 22,176 2014
19  Japan 21,675 2012
20  Italy 20,860 2013
21  United Kingdom 20,769 2013
22  Slovenia 19,736 2013
23  Spain 19,242 2013
24  Israel 17,802 2014
25  Czech Republic 15,391 2013
26  Slovakia 14,171 2013
27  Portugal 14,053 2013
28  Poland 13,630 2013
29  Estonia 13,366 2013
30  Greece 11,719 2013
31  Hungary 11,709 2014
32  Russia 10,746 2010
33  Lithuania 10,465 2013
34  Latvia 10,381 2013
35  Turkey 9,066 2013
36  Chile 8,800 2013
37  Mexico 5,160 2014
38  Bulgaria 3,932 2015

* Other sources claim that based on analysis of the CPS data, US median household income has been consistently under-counted by a ratio of 83-85% (mean undercounted by 75%). Other analyses have claimed varying rates of quality among countries; For example, Norway, Sweden, Denmark, Netherlands, Germany, Austria, UK And Bulgaria all captured 85% or more income as compared to the national accounts (details in link—Appendix 4).[5]

Median household income and the US economy

This graph shows the income of the given racial and ethnic groups, in 2014 dollars.[6]

Since 1980, U.S. gross domestic product (GDP) per capita has increased 67%,[7] while median household income has only increased by 15%. An economic recession will normally cause household incomes to decrease, often by as much as 10% (Figure 1).

Median household income is a politically sensitive indicator. Voters can be critical of their government if they perceive that their cost of living is rising faster than their income. Figure 1 shows how American incomes have changed since 1970. The last recession was the early 2000s recession and was started with the bursting of the dot-com bubble. It affected most advanced economies including the European Union, Japan and the United States.

The Late-2000s recession began with the bursting of the U.S. housing bubble, which caused a problem in the dangerously exposed sub prime-mortgage market. This in turn triggered a global financial crisis. In constant price, 2011 American median household income was 1.13% lower than what it was in 1989. This corresponds to a 0.05% annual decrease over a 22-year period.[8] In the mean time, GDP per capita has increased by 33.8% or 1.33% annually.[9]

A comparison between Median Equivalised Household Income and GDP per Capita in USD for select developed countries is shown in the chart below.[10][11]

In 2015, the median household income spiked 5.2 percent, reaching $ 56,000, making it the first annual hike in median household income since the start of the Great Recession.[12]

See also

References

This article is issued from Wikipedia - version of the 11/28/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.