Household income posts first gain in 6 years
The median household income was $46,326 in 2005, a gain - above inflation - of 1.1 percent from 2004.
By Les Christie, staff writer

NEW YORK ( -- The average American household earned more money last year than in 2004, according to a Census Bureau report released Tuesday.

Based on a sampling of 3 million households, median U.S. household income for 2005 was $46,326, an increase of 1.1 percent in real, inflation-adjusted dollars over the previous year. It was the first time real income rose since 1999.

The nation's poverty rate, at percent 12.6 percent, and the number of Americans living in poverty, 37 million, were statistically identical to the year before. It was the first time since 2000 that the poverty rate had not climbed.

Income rose in the West (1.5 percent) and Northeast (2.9 percent) and was unchanged in the South and Midwest. Median income was highest in the Northeast ($50,882) and lowest in the South ($42,138).

Although real household income was up, wages and salaries lost ground. Wages for men fell 1.8 percent to $41,386; wages for women fell 1.3 percent to $31,858.

The difference between rising household income and falling wages and salaries may be traced to two factors, according to David S. Johnson, the chief of the Census Bureau's Housing and Household Economic Statistics Division: Household income can include other sources of income, such as from stock dividends. And some households may have added low-income workers - they would raise the income of the household, but at the same time bring down the median wage.

"This is not as positive a report for working families as the numbers would indicate," says Jared Bernstein of the Economic Policy Institute, a DC-based, non-profit, liberal think tank.

Digging more deeply into the data, one finds that all the income gains went to householders aged 65 or older, most of whom are retirees and no longer part of the work force. Their median household income gained 2.8 percent.

In contrast, median income of non-elderly households, working people, fell 0.5 percent. "The recovery is bypassing working families," says Bernstein. Top of page

Richest cities to live
The top 25 U.S. cities ranked by median household income.
City State Median household income
San Jose CA $70,921
Anchorage AK $61,217
Virginia Beach VA $58,545
San Francisco CA $57,496
San Diego CA $55,637
Anaheim CA $52,258
Honolulu HI $50,793
Riverside CA $50,416
Seattle WA $49,297
Arlington TX $48,992
Aurora CO $48,309
Raleigh NC $48,131
Las Vegas NV $47,863
Colorado Springs CO $47,854
Santa Ana CA $47,438
Washington DC $47,221
Charlotte NC $47,131
Bakersfield CA $45,174
Sacramento CA $44,867
Mesa AZ $44,861
Jacksonville FL $44,173
Oakland CA $44,124
Austin TX $43,731
New York NY $43,434
Los Angeles CA $42,667
Source: U.S. Census Bureau

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