What does the median household income mean?
I m a little confused when trying to see what the median household income is, it says from what i read it s in the 50-55k range in America. I m 23 and my wife is 22 and we both make 15 an hour so that puts us at 62kish a year does this mean we are making more than most American family s? I dont see how this could be because it s not like we have a huge amount of money and it s just the 2 of us so I dont see how you have kids if you make less. Am I reading the stat wrong?
- CliveLv 71 year ago
That's exactly what the median means. If you lined up all households in order of income, then found the household in the exact middle of the line, that would have the median income. Therefore you are making more than over half the American population do.
What you have is a LOT of people on a low income. Let's look at what happens if you grouped this line into bands of 0-5k, 5-10k, 10-15k and so on. Which of these bands has the most households in it? That is the mode, and I bet it's significantly lower than the median. The final kind of average is the one you probably know - the arithmetic mean, what you get if you add up all the incomes and divide by the number of households. Most likely that will be lower than the median but higher than the mode.
What we have here is a skewed distribution. If we have a measurement that clusters around the average number and the further away you get from it in EITHER direction the equally less likely it is, then if you plotted a graph of that, it would be bell-shaped, highest in the middle and tailing away equally on either side. This is called a normal distribution. The mode, median and mean are all the same.
But with household incomes, you get a bell that looks pushed over towards the low end, with a long tail of higher incomes. The mode, median and mean are not the same. So which one is most meaningful? The median is usually picked because of what it tells you - half of American households make more than this and half make less. And it's as low as it is because SO many households make less.
Bear in mind there are single-person households, couples where only one works or neither works because unemployment is high in that area... all of those will pull the median down. In statistics, doing the calculation is the easy part, interpreting correctly what it means is the tricky bit!
- george 2Lv 61 year ago
The 55k range just means that half of the people in the us make that or more then that and half make that or less.
- Pat WoodenLv 71 year ago
I have a husband and two kids, and for most of our marriage, neither of us made more than $13-$14 per hour. When my husband was laid off, I had to take a second job to make ends meet. We were not poor, but we had to cut out non-essentials such as a car that wasn't used, eating out, going on vacation, etc.
It's amazing how many things you probably consider ordinary expenses are really luxuries. I shopped at thrift shops, bought reconditioned appliances, and cooked lots of casseroles. I have to admit, I did fall behind on credit card payments sometimes, but caught up as soon as I could. I think it's fair to say a LOT of Americans live like that.
- AmyLv 71 year ago
Yes, it means that you earn more than the majority of American households.
Your salary is double the minimum wage. And there are two of you - a "household" can be a single person (unrelated roommates are separate households), or a single-income family, as well as two-income couples like you.
A lot of people cannot get a $15/hour job, or cannot get a full time job.
And no, they can't afford to have children. Poverty is the #1 reason for abortion.
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- StephenWeinsteinLv 71 year ago
It means the amount that half make more than and half make less than. Since you are making only slightly more than the median, you are making more than the majority of families, but not more than "most families". Probably about 60% make less than you and about 40% make more than you. Give or take.
- STEVEN FLv 71 year ago
Median is a MATHEMATICAL term that means 1/2 of the numbers are above and 1/2 of them are below the figure.
- AmbistomaLv 71 year ago
Others have explained what a median is. To answer your second question, $62,000 goes farther in some places (e.g. Pine Bluff, Arkansas) than in others (e.g. anywhere near San Francisco). If I recall correctly, as of 2008 about 1/3 of our population lives in communities of 10,000 or less, where housing is much cheaper.
- shipwreckLv 71 year ago
median is where half make more and half make less. So you are over half of households. Since you have two workers and many are single that makes sense.
Average is adding up all the income and dividing buy the total household. So if 99 households make 50K and one household makes 550K the average is 100K while the median is 50K.
- Beverly SLv 71 year ago
It means the average is 50k - 55k so you are making slightly over average.
- Anonymous1 year ago
I'm afraid that's exactly what it means. We have a large number of citizens who are quite poor, pulling down the median and struggling to provide the basics for themselves and their families.