US median household income is a measurement of income that is considered average in terms of the overall value of the household. This income is generally used to compare the relative incomes of different households, and helps the public understand the extent to which poverty exists within a particular community.
US median household income is based on three methods, namely: (a) The official (or calculated) income level of a family from the Internal Revenue Service; (b) The estimated (or calculated) income level of the household, and (c) The estimated (or calculated) income level of the household aggregated over a population, like a state, a city, or a whole county. It is important to note that these estimates do not necessarily represent the same figures given in other sources.
Official, calculated, and estimated income levels are then compared with the most recent data released by the Department of Commerce on median income levels for each state, city, and county in the United States. These figures are then used to estimate the average US median household income.
The last method is used to calculate the median income levels for a metropolitan area. This is done by dividing the official and estimated incomes of the median income levels for the state, city, and/or county in the area by its population size. This method is based upon the fact that cities and counties with a relatively low population usually have lower incomes than those that have a high population.
In the case of the median income levels, a household is considered to be “poor” if its income is less than forty-three hundred percent of the US median household income level. Similarly, “rich” is defined as having income above four hundred fifty percent of the median level. A household’s income may also fall below this level when tax payments are included in the total of its income.
The data used for these studies were originally collected for the Economic Research Service. They then were published in academic journals, but it was only after considerable research was done by different organizations that the income levels were finally published. Because of this, it is often possible to find different values that can easily be compared among different sources.
When income levels for households are compared, the differences can often be found between different counties. For example, counties with larger populations tend to have lower incomes than counties with smaller populations.
The US median household income levels are important when it comes to determining how much poverty there actually is within a community, because a small amount of poverty does not necessarily indicate that a household is suffering from poverty. Conversely, a high level of poverty in a certain locality often means that the community is suffering from substantial poverty. However, it should be noted that most people do not live in a community where they are considered “poor,” and so these data cannot be used to determine that.
As with any statistic, the higher the level of poverty rate, the higher the chances that the statistics will be inaccurate. Unfortunately, some areas of the country have high poverty rates while others have very low rates, so it is difficult to conclude which regions are experiencing poverty at a high or low level.
Because of this, the US median income levels are often taken as a base point and then compared to income figures for various demographics. In this way, a general idea of what the overall income levels are can be determined.
These figures are also taken as a starting point when determining the size of a community or an individual family. Many communities will publish their annual median income level for the area in question. This can help to give a rough estimate for the median income levels of individuals living in that community.
Most families make more than the income levels suggested by the income figures. However, some families live in situations where the median income level is much lower than that suggested by these figures. In these cases, family members may receive welfare or other types of government assistance. A good way to ensure that families are not suffering from poverty is to consider all the options that are available to avoid poverty.