AFFLUENCE IN THE UNITED STATES

Breakdowns of individuals and households with incomes exceeding $60,000.^[1]^[2]

'Affluence in the United States' refers to an individual's or household's state of being in an economically favorable position in contrast to a given reference group.^[3] While there are no precise guidelines or thresholds for what may be considered affluent, the United States Department of Commerce's Bureau of the Census does provide detailed statistical data on the economic state of America's population. Income, measured either by household or individual, is the perhaps most commonly used measure for whether or not a given entity may be considered affluent. The term's usage varies greatly depending on context and speaker. Both an upper middle class person with a personal income of $77,500 annually and a billionaire may be referred to as affluent. If the average American with a median income of roughly $32,000^[4] ($39,000 for those employed full-time between the ages of 25 and 64)^[5] was used as a reference group, the upper middle class person with a personal income in the tenth percentile of $77,500 may indeed be referred to as affluent.^[4] If compared to an executive of the Fortune 500, however, the upper middle class person would seem anything but affluent.^[7]^[8] Currently marketing corporations and investment houses classify those with household incomes exceeding $75,000 as mass affluent, while sociologist Leonard Beeghley identifies all those with a net worth of $1 million or more as "rich." The upper class is most commonly defined as the top 1% with household incomes commonly exceeding $500,000 annually.
The US Census Bureau offers income data by household and individual. It is to be noted that 42% of households have two incomes earners; thus making households' income levels higher than personal income levels.^[9] The 2005 economic survey revealed the income distribution for households and individuals whereby the top 5% of individuals had 'six figure income's (exceeding $100,000) and the top 10% of individuals had incomes exceeding $75,000.^[4] The top 5% of households, three quarters of whom had two income earners, had incomes of $166,200 or more,^[9] with the top 10% having incomes well in excess of $100,000.^[12] The top 1.5% of households had incomes exceeding $250,000 with 146,000 households, the top 0.12%, having incomes exceeding $1,600,000 annually.^[13] Households may also be differentiated among each other, depending on whether or not they have one or multiple income earners. While many middle-middle class households rely on two income earners to merely make ends meet,^[14] those in the upper middle class may be able to do so on just one income. In 2005 for example, the median households income for a two income earner households was $67,000. The median income for an individual employed full-time with a graduate degree was in excess of $60,000, concluding that nearly half of those with graduate degree are able to out-earn most dual income households with one-income.^[5]
Overall the term affluent may be applied to a variety of individuals, households or other entities depending on context. Data from the US Census Bureau serves as the main guideline for defining affluence. US government data not only reveals the nation's income distribution but also provides data regarding the demographic characteristics of those to whom the term, affluent, may be applied.^[9]

Top percentiles

Affluence and economic standing within society is often expressed in terms of percentile ranking. Economic ranking is conducted either in terms of giving lower thresholds for a designated group (e.g. the top 5%, 10%, 15%, etc.) or in terms of the percentage of households/individuals with incomes above a certain thresholds (e.g. above $75,000, $100,000, $150,000, etc.). The table below presents 2006 income data in terms of the lower thresholds for the given percentages (e.g. the top 25.6% of households had incomes exceeding $80,000, compared to $47,000 for the top quarter of individuals).^[4]^[12]

Data	Top third	Top quarter	Top quintile	Top 15%	Top 10%	Top 5%	Top 3%	Top 1.5%	Top 0.1%^[13]
Household income^[12]
Lower threshold (annual gross income)	$65,000	$80,000	$91,705	$100,000	$118,200	$166,200	$200,000	$250,000	$1,600,000
Exact Percentage of households	34.72%	25.60%	20.00%	17.80%	10.00%	5.00%	2.67%	1.50%	0.12%
Personal income (age 25+)^[4]
Lower threshold (annual gross income)	$37,500	$47,500	$52,500	$62,500	$75,000	$100,000	N/A
Exact Percentage of individuals	33.55%	24.03%	19.74%	14.47%	10.29%	5.63%	N/A

'SOURCE: US Census Bureau, 2006'^[4]^[12]

Over time

This graph shows the income of the given percentiles from 1967 to 2003, in 2003 dollars.^[24]

Household income changes over the course of time, with income gains being substantially larger for the upper than for the lower percentiles.^[25] All areas of the income strata saw their incomes rise since the late 1960s, especially during the late 1990s.^[24] The overall increase in household income is largely the result of an increased percentage of households with more than one income earner. While households with just one income earner, most commonly the male, were the norm in the middle of the 20^th century, 42% of all households and the vast majority of married couple households now have two or more income earners. With so many present day households having two income earners, a substantial increase in household income is easy to explain.^[14]
Two income earner households are far more common among the top quintile of households than the general population. 2006 US Census Bureau data indicates that over three quarters, 76%, of households in the top quintile, with annual incomes exceeding $91,200, had two or more income earners compared to just 42% among the general population and a small minority in the bottom three quintiles. As a result much of the rising income inequity between the upper and lower percentiles can be explained through the increasing percentage of households with two or more incomes.^[14]^[25]

Data	2003	2000	1997	1994	1991	1988	1985	1982	1979	1976	1973	1970	1967
20th percentile	$17,984	$19,142	$17,601	$16,484	$16,580	$17,006	$16,306	$15,548	$16,457	$15,615	$15,844	$15,126	$14,002
Median (50th)	$43,318	$44,853	$42,294	$39,613	$39,679	$40,678	$38,510	$36,811	$38,649	$36,155	$37,700	$35,832	$33,338
80th percentile	$86,867	$87,341	$81,719	$77,154	$74,759	$75,593	$71,433	$66,920	$68,318	$63,247	$64,500	$60,148	$55,265
95th percentile	$154,120	$155,121	$144,636	$134,835	$126,969	$127,958	$119,459	$111,516	$111,445	$100,839	$102,243	$95,090	$88,678

'SOURCE: US Census Bureau, 2004'^[24] ''(Page 44/45)'', 'All figures are inflation-adjusted and given in 2003 dollars.'

Median income levels

Professions

Median annual earnings of selected professions as well as the nation medain income of full-time, year-round employed workers, according to the US Department of Labor.

The vast majority of Americans derive the majority of their income from occupational earnings. ^[31] Income derived from an occupation is largely determined by scarcity and the economic law of supply and demand. The more demand for a certain specialty and the less supply, the higher the income. There has been shown to be a correlation between increases in income and increases in worker satisfaction. The increase in worker satisfaction, however, is not solely a result of the increase in income. Workers in more complex and higher level occupations tend to have attained higher levels of education and thus are more likely to have a greater degree of autonomy in the workplace.^[32] Additionally higher level workers with advanced degrees are hired to share their personal knowledge, to conceptualize, and to consult. Higher-level workers suffer less job alienation and reap not only external benefits in terms of income from their jobs, but also enjoy high levels of intrinsic motivation and satisfaction.^[8]^[32]
In the United States the highest earning occupational groups were White collar professionals including management. Individuals in these occupations tend to experience the highest job satisfaction and highest incomes. The overall highest paying profession in the United States is that of physician. ^[8] Physician (M.D.and D.O.) compensation ranks as the highest median annual earnings of any profession. Median annual earnings ranged from $156,010 for family physicians to $321,686 for anesthesiologists. Surgeons post a median annual income of $282,504.^[36] By comparison the median annual salary for a Chief Executive Officer (C.E.O.) in May 2004 was $140,350.^[37] Overall annual earnings among the nation's top 25 professions ranged from the $70,000s to the $300,000s. In addition to physicians, lawyers, physicists, air traffic controllers, and nuclear engineers were all among the nation's 20 highest paid occupations with incomes in excess of $78,410.^[38] Some of the other occupations in the high five-figure range were economists with a median of $72,780^[39], mathematicians with $81,240^[40], financial managers with $81,880,^[41] and software publishers with median annual earnings of $73,060.^[42]

Education

Median household and personal income by educational attainment.

Educational attainment plays a major factor in determining an individual's economic disposition. Personal income varied greatly according to an individual's education, as did household income. Incomes for those employed, full-time, year-round and over the age of twenty-five ranged from $20,826 ($17,422 if including those who worked part-time^[4]) for those with less than a ninth grade education to $100,000 for those with professional degrees ($82,473 if including those who work part-time^[4]). This median income for individuals with doctorates was $79,401 ($70,853 if including those who work part-time^[4]).^[46] These statistics reveal that the majority of those employed full-time with professional or doctoral degrees are among the overall top 10% (15% if including those who work part time) of income earners. Of those with a master's degree, nearly 50% were among the top quarter of income earners (top third if including those who work part time).^[4]

Race

Percent of households with six figure incomes and individuals with incomes in the top 10%, exceeding $77,500.

Racial breakdown of households with six figure incomes.

Recent US Census Bureau publications indicate a strong correlation between race and affluence. In the top household income quintile, households with incomes exceeding $91,200, Whites and Asian Americans were overrepresented, whereas Hispanics and African Americans were underrepresented. The household income for Asian Americans was, at $61,094, by far the highest,^[48] exceeding that of Whites ($48,554) by 26%.^[49] Over a quarter, 27.5%, of Asian American households had incomes exceeding $100,000 , and another 40% had incomes of over $75,000.^[50] Among White households, who remained near the national median, 18.3% had six figure incomes, while 28.9% had incomes exceeding $75,000.^[49] The percentages of households with incomes exceeding $100,000 and $75,000 were far below the national medians for Hispanic and African American households.^[52] Among Hispanic households, for example, only 9% had six figure incomes, and 17% had incomes exceeding $75,000.^[53] The race gap remained when considering personal income. In 2005, roughly 11% of Asian Americans^[54] and 7% of White individuals^[55] had six figure incomes, compared to 2.6% among Hispanics^[56] and 2.3% among African Americans.^[57]
The racial breakdowns of income brackets further illustrate the racial disparities associated with affluence. in 2005, 81.8% of all 114 million households were White,^[49] 12.2% were African American,^[52] 10.9% were Hispanic^[53] and 3.7% were Asian American.^[48]^[62] While White households are always near the national median due to Whites being the by far most prevalent racial demographic, the percentages of minority households with incomes exceeding $100,000 strayed considerably from their percentage of the overall population. Asian Americans, who represent the smallest surveyed racial demographic in the overall population, were the found to be the prevalent minority among six figure income households. Among the nearly twenty million households with six figure incomes, 86.9% were White,^[49] 5.9% were Asian American,^[48] 5.6% were Hispanic^[53] and 5.5% were African American.^[52] Among the general individual population '''with earnings''', 82.1% were White,^[55] 12.7% were Hispanic,^[56] 11.0% were African American^[57] and 4.6% were Asian American.^[54] Of the top 10% of income earners, those nearly 15 million individuals with incomes exceeding $77,500, Whites and Asians were once again overrepresented with the percentages of African Americans and Hispanics trailing behind considerably. Of the top 10% of earners, 86.7% were White.^[55] Asian Americans were the prevalent minority, constituting 6.8% of top 10% income earners, nearly twice the percentage of Asian Americans among the general population.^[54] Hispanics, who were the prevalent minority in the general population of income earners, constituted only 5.2% of those in the top 10%^[56], with African Americans being the least represented with 5.1%.^[57]

Race		Overall Median	High School	Some College	College Graduate	Bachelor's Degree	Master's Degree	Doctorate Degree
Total population	All, age 25+	32,140	26,505	31,054	49,303	43,143	52,390	70,853
Total population	Full-time workers, age 25-64	39,509	31,610	37,150	56,027	50,959	61,324	79,292
White alone	All, age 25+	33,030	27,311	31,564	49,972	43,833	52,318	85,658
White alone	Full-time workers, age 25-64	40,422	32,427	38,481	56,903	51,543	61,441	77,906
Asian alone	All, age 25+	36,152	25,285	29,982	51,481	42,466	61,452	69,653
Asian alone	Full-time workers, age 25-64	42,109	27,041	33,120	60,532	51,040	71,316	91,430
African American	All, age 25+	27,101	22,379	27,648	44,534	41,572	48,266	61,894
African American	Full-time workers, age 25-64	32,021	26,230	32,392	47,758	45,505	52,858	N/A
Hispanic or Latino	All, age 25+	23,613	22,941	28,698	41,596	37,819	50,901	67,274
Hispanic or Latino	Full-time workers, age 25-64	27,266	26,461	33,120	46,594	41,831	53,880	N/A

'SOURCE: US Census Bureau, 2006'^[75]

Social class

Economic well-being is often associated with high societal status, yet one needs to remember that income and economic compensation of any sort are first and foremost the result of scarcity and may only act as an indicator of social class. It is in the interest of society that all open positions are adequately filled with the occupant being enticed to do his or her best.^[8] As a result an occupation that requires a scarce skill, the attainment of which is often documented through an educational degree, and entrusts its occupant with a high degree of influence will feature high economic compensation. The high income is meant to ensure that individuals obtain the necessary skills (e.g. medical or graduate school) and complete their tasks with the necessary valor.^[77] Differences in income may, however, be found among occupations of similar sociological nature. The median annual earnings of a physican were in excess of $150,000 in May 2004, compared to $95,000 for an attorney.^[36]^[38] Both occupations require finely tuned and scarce skill sets and both are essential to the well-being of society. Yet, family doctors outearned attorneys and other upper middle class professionals by a wide margin as their skill-sets are deemed especially scarce. Overall, high status positions tend to be those requiring a scarce skill and are therefore commonly far better compensated than those in the middle of the occupational strata.^[8]^[77]
It is important to remember that the above is an ideal type, a simplified model or reality using optimal circumstances. In reality other factors such as discrimination based on race, ethnicity and gender as well as aggressive political lobbying by certain professional organizations also influence personal income. An individual personal live and the thereon based career decisions as well as his or her personal connections (often attained through "networking") witin the nation's economic institutions are also likely to have an effect on income, status and whether or not an individual may be referred to as affluent.^[7] In contemporary America it is a combination of all these factors, with scarcity remaining the by far most prominent one, determine a person's economic compensation. Due to higher status professions requiring advanced and thus less commonly found skill sets (including the ability to supervise and work with a considerable autonomy) are better compensated through the means of income, making high status individuals relatively affluent, depending on reference group.^[8]
While the two paragraphs above only describe the relationship between status and personal income, household income is also often used to infer status. As a result, the dual income phenomenon presents yet another problem in equating affluence with high societal status. As mentioned earlier in the article 42% of households have two or more income earners, 76% of households with six figure incomes have two or more income earners.^[9] Furthermore people are most likely to marry their professional and societal equals. It therefore becomes apparent that the majority of households with incomes exceeding the six figure mark are the result of an economic as well as personal union between two economic equals. Today, two nurses, each making $55,000 a year, can easily outearn a single attorney who makes the median of $95,000 annually.^[85]^[38] Despite household income rising drastically through the union of two economic equals, neither individual has advanced his or her function and position within society. Yet the household (not individual) may have become more affluent, assuming an increase in household members does not off-set the dual-income derived gains.

Extreme affluence

The wide income discrepancies within the top 1.5% of households.

Today there are approximately 146,000 (0.1%) households with incomes exceeding $1,500,000, while the top 0.01% or 11,000 households had incomes exceeding $5,500,000. The 400 highest tax payers in the nation had gross annual household incomes exceeding $87,000,000. Household incomes for this group have risen more dramatically than for any other. As a result the gap between those who make less than one and half million dollars annually (99.9% of households) and those who make more (0.1%) has been steadily increasing, prompting ''The New York Times'' to proclaim that the "Richest Are Leaving Even the Rich Far Behind." Indeed the income disparities within the top 1.5% are quite drastic. While households in the top 1.5% of households had incomes exceeding $250,000, 443% above the national median, their incomes were still 2200% lower than those of the top .01% of houseolds. One can therefore conclude that any household, even those with incomes of $250,000 annually are relatively poor when compared to the top .1%, who in turn are relatively poor compared to the top 0.000267%, the top 400 taxpaying households.^[87]

References

External links

★ US Census Bureau, personal income forum

★ US Census Bureau, household income forum

★ Alternate income measures forum

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AFFLUENCE IN THE UNITED STATES

Top percentiles

Over time

Median income levels

Professions

Education

Race

Social class

Extreme affluence

See also

US related articles

References

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