Median Household Income Overview
The indicator refers to the median income of a household in a country. Median household income divides households into two equal segments, such that the first half earns less than the median income while the second half earns more. Median income is defined in PPP (Purchasing Power Parity, in Current International Dollars) terms so as to avoid exchange rate fluctuations due to inflationary tendencies across countries. The median income level is generally accepted as the better indication of well-being or actual income distribution as it is not skewed by disproportionate data.
According to GlobalData, the top ten countries with highest median household income in the world are Singapore, Iceland, Norway, Sweden, Ireland, Luxembourg, Belgium, United States, Cyprus, and Australia. The average median household income (PPP) was $40,094 in 2021.
The US Median Household Income Highlights in 2021
The US is the largest economy in the world. The US median household income hit (PPP) $65,657.65 in 2021, an increase of 1.3% over the previous year. Between 2015 to 2021, the US median household income increased by 11.7%.
According to the Census Bureau, the real median earnings of all workers aged 15 and over decreased 1.2% between 2019 and 2020 from $42,065 to $41,535. The 2020 real median household incomes of non-Hispanic Whites, Asians, and Hispanics decreased from their 2019 medians, while the changes for Black households was not statistically different.
According to GlobalData, the US is amongst the poorest performers of major OECD countries, such as Germany, the UK, Canada, and Australia, in terms of income inequality. The Gini index ranges from zero (perfect income equality across all households) to 100 (perfect income inequality across all households).
Key elements that are influencing Global Economy
Increased COVID-19 impact:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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