NCPA - National Center for Policy Analysis


August 30, 2004

The Census Bureau released its annual income distribution report on Thursday. The good news is that the distribution of income has been essentially unchanged for the last three years. The bad news is that this is because every income group is worse off to about the same degree, says Bruce Bartlett.

  • Between 2000 and 2003, the share of total income going to the top quintile (20 percent of households) was exactly unchanged at 49.8 percent.
  • The middle three quintiles -- the middle class -- were slightly better off, raising their share of aggregate income from 46.7 percent to 46.9 percent.
  • The bottom quintile was slightly worse off, falling from 3.6 percent to 3.4 percent.

However, the real income of every group is down significantly since 2000, including those at the top. Their income is down almost $5,000 (in 2003 dollars), about the same as for the lower 80 percent of households in total, says Bartlett.

Needless to say, there is no reason to cry for those in the top quintile -- often characterized as the "rich." They are still doing very well, with an average income of $147,078 in 2003. However, it is doubtful that very many people view this as a rich family's income, especially when both spouses work.

This fact is even clearer when looking at the income needed to get into the top quintile, which is a mere $86,867, says Bartlett:

  • Almost any couple where both spouses work full time is going to be close to this level.
  • According to the Census Bureau, the median earnings for a male working full time last year was $40,668 and those for females was $30,724, for a combined income of $71,393.

Source: Bruce Bartlett, "Wealth and Poverty in America," National Center for Policy Analysis, August 30, 2004.


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