Household Incomes Hit New High, Census Bureau Finds

New findings also show the gender gap narrowing

By Stephen Miller, CEBS Sep 15, 2017
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As the U.S. economy continues its extended recovery from the Great Recession of 2007-09, the U.S. Census Bureau announced this week that real median household income increased by 3.2 percent between 2015 and 2016.

Real (meaning inflation-adjusted) median household income in the U.S. in 2016 was $59,039, up from $57,230 in 2015, putting middle-class incomes at their highest level ever.

The findings were published in the Income and Poverty in the United States: 2016 report, released on Sept. 12. A Census Bureau press release and webpage summarize key findings.

Family vs. Nonfamily Households

Real median incomes in 2016 for family households ($75,062) and nonfamily households ($35,761) increased 2.7 percent and 4.5 percent, respectively, from their 2015 medians, the report showed. A family is defined by the Census Bureau as "a group of two people or more (one of whom is the householder) related by birth, marriage or adoption and residing together."

Highest Incomes in Northeast and West

U.S. regional differences for median household incomes (family and nonfamily together) also were highlighted in the report:

  • Households in the South and West experienced an increase in real median income of 3.9 percent and 3.3 percent, respectively, between 2015 and 2016.
  • Households with the highest median household incomes were in the Northeast ($64,390) and the West ($64,275), followed by the Midwest ($58,305) and the South ($53,861).
  • The difference between the 2015 to 2016 percentage changes in median income for households in all regions were not statistically significant.

Although the Census Bureau report did not forecast future earnings growth, compensation advisors expect salary increase budgets to remain at 3 percent for both 2017 and 2018SHRM Online has reported. Employers also are continuing to use variable pay to differentiate rewards for high-performers.


[SHRM members-only HR Q&A: How can I locate resources for salary survey data for all industries and occupations?]

Gender Income Gap Narrows

The 2016 real median earnings of men ($51,640) and women ($41,554) who worked full time, year-round resulted in a female-to-male earnings ratio of 0.805, a slight improvement for women compared with the 2015 ratio of 0.796. In 1975, the female-to-male earnings ratio was 0.588, the Census Bureau's data shows.

17-1187 Full Time Income Increases 2b.png

"For all female workers (full and part time), the story is simple—real median earnings in 2016 were higher than in any of the last 40 years," Jonathan Rothbaum, a Census Bureau survey statistician in the social, economic and housing statistics division, commented in a blog post. "Median female earnings have been rising, from $16,483 in 1976 to $30,882 in 2016.

For male workers, the picture was more complicated, Rothbaum noted. "Compared to their peak in 1999 ($43,360), median male earnings in 2016 ($42,220) were 2.6 percent lower," due, some believe, to factors such as an increasingly globalized economy and greater automation putting downward pressure on wages, particularly for manufacturing jobs.

Median male earnings, however, "were higher in 2016 than any year prior to 1998 and each year from 2008 to 2014," Rothbaum pointed out, in another sign of economic recovery.

17-1187 Income Increases 2.png

In April, the Pew Research Center also reported evidence of a narrowing but persistent gender gap in pay.

Median Household Income by Race/Hispanic Origin

The Census Bureau report presents income by race/Hispanic origin in a variety of ways. The findings below compare median household income in 2015 and 2016 based on the race/Hispanic origin of the householder.

Median Household Income by Race/Hispanic Origin of Householder: 2015 and 2016

 

2015
Median Income

2016
Median Income

% Change in Real Median Income

White

$60,869

$61,858

1.6%

White, not Hispanic

$63,745

$65,041

2.0%

Black

$37,364

$39,490

5.7%

Asian

$78,141

$81,431

4.2%

Hispanic (any race)

$45,719

$47,675

4.3%

Source: U.S. Census Bureau, Income and Poverty in the United States: 2016. Table 1. Income and Earnings Summary Measures by Selected Characteristics: 2015 and 2016.


Labor Market Tightens

Between 2015 and 2016, the total number of people in the U.S. with earnings increased by about 1.2 million. In addition, the total number of full-time, year-round workers increased by 2.2 million between 2015 and 2016, "suggesting a shift from part-year, part-time work status to full-time, year-round work status," the Census Bureau reported.

"There's a danger that this is as good as it gets," Peter Atwater, president of Financial Insyghts, a research firm, told TheWashington Post after the report was released. "We are already at a 16-year low in unemployment. The likelihood of significant job growth from here is limited."

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