Standard of living in the United States
Encyclopedia
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...
in the United States is one of the top 20 in the world by the standards economists use as measures of standards of living. Per capita income
Personal income in the United States
Personal income is an individual’s total earnings from wages, investment interest, and other sources. In the United States the most widely cited personal income statistics are the Bureau of Economic Analysis’s personal income and the Census Bureau’s per capita money income...
is high but also less evenly distributed than in most other developed countries; as a result, the United States fares particularly well in measures of average material well being that do not place weight on equality aspects.
On comprehensive measures such as the UN Human Development Index the United States is always in the top twenty, currently ranking 4th. On the Human Poverty Index
Human Poverty Index
The Human Poverty Index is an indication of the standard of living in a country, developed by the United Nations . For highly developed countries, the UN considers that it can better reflect the extent of deprivation compared to the Human Development Index....
the United States ranked 17th, one rank below the United Kingdom and one rank above Ireland. On the Economist's quality-of-life index
Quality-of-life index
The Economist Intelligence Unit’s quality-of-life index is based on a unique methodology that links the results of subjective life-satisfaction surveys to the objective determinants of quality of life across countries...
the United States ranked 13th, in between Finland and Canada, scoring 7.6 out of a possible 10. The highest given score of 8.3 was applied to Ireland. This particular index takes into account a variety of socio-economic variables including GDP per capita, life expectancy, political stability, family life, community life, gender equality, and job security. The homeownership rate is relatively high compared to other post-industrial nations. In 2005, 69% of Americans resided in their own homes, roughly the same percentage as in the United Kingdom, Belgium, Israel and Canada. Residents of the United States also enjoy a high access to consumer goods. Americans enjoy more cars and radios per capita than any other nation and more televisions and personal computers per capita than any other large nation.
The median income
Household income in the United States
Household income is a measure commonly used by the United States government and private institutions, that counts the income of all residents over the age of 18 in each household, including not only all wages and salaries, but such items as unemployment insurance, disability payments, child support...
is $43,318 per household ($26,000 per household member) with 42% of households having two income earners. Meanwhile, the median income of the average American age 25+ was roughly $32,000 ($39,000 if only counting those employed full-time between the ages of 25 to 64) in 2005. According to the CIA the gini index
Gini coefficient
The Gini coefficient is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper "Variability and Mutability" ....
which measures income inequality (the higher the less equal the income distribution) was clocked at 45.0 in 2005, compared to 32.0 in the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
and 28.3 in Germany.
|The US has... a per capita GDP [PPP] of $42,000... The [recent] onrush of technology largely explains the gradual development of a "two-tier labor market"... Since 1975, practically all the gains in household income have gone to the top 20% of households... The rise in GDP in 2004 and 2005 was undergirded by substantial gains in labor productivity... Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. -CIA factbook on the US economy, 2005.
The United States has one of the widest rich-poor gaps of any high-income nation today, and that gap continues to grow. In recent times, some prominent economists including Alan Greenspan
Alan Greenspan
Alan Greenspan is an American economist who served as Chairman of the Federal Reserve of the United States from 1987 to 2006. He currently works as a private advisor and provides consulting for firms through his company, Greenspan Associates LLC...
have warned that the widening rich-poor gap in the U.S. population is a problem that could undermine and destabilize the country's economy and standard of living
Standard of living
Standard of living is generally measured by standards such as real income per person and poverty rate. Other measures such as access and quality of health care, income growth inequality and educational standards are also used. Examples are access to certain goods , or measures of health such as...
stating that "The income gap between the rich and the rest of the US population has become so wide, and is growing so fast, that it might eventually threaten the stability of democratic capitalism itself".
| Country | Austria | Belgium | Denmark | France | Ireland | Norway | Spain | Portugal | UK | United States | Israel | Canada | Russia |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Homeownership rate | 56% | 71% | 51% | 55% | 42% | 77% | 77% | 85% | 64% | 69% | 69% | 82% | 72% |
International rankings
| Index | Rank |
|---|---|
| Human Development Index Human Development Index The Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries... |
4th out of 172 |
| GDP (PPP) per capita | 7th out of 183 |
| GDP (nominal) per capita | 9th out of 183 |
| Quality-of-life Index Quality-of-life index The Economist Intelligence Unit’s quality-of-life index is based on a unique methodology that links the results of subjective life-satisfaction surveys to the objective determinants of quality of life across countries... |
13th out of 111 |
| Human Poverty Index Human Poverty Index The Human Poverty Index is an indication of the standard of living in a country, developed by the United Nations . For highly developed countries, the UN considers that it can better reflect the extent of deprivation compared to the Human Development Index.... |
17th out of 19 |
International household income comparison
Median household income for other countries is shown in the table below. The data for each country has been converted to US dollars using Purchasing Power Parity
Purchasing power parity
In economics, purchasing power parity is a condition between countries where an amount of money has the same purchasing power in different countries. The prices of the goods between the countries would only reflect the exchange rates...
(obtained from the OECD).
- Note that the Switzerland figure represents mean and not median household income.
Social class
Standard of living in the United States varies considerably with socio-economic status. The table below gives a summarization of prominent academic theories on the socio-economic stratification of the United States:See also
- Affluence in the United StatesAffluence in the United StatesAffluence 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...
- Poverty in the United StatesPoverty in the United StatesPoverty is defined as the state of one who lacks a usual or socially acceptable amount of money or material possessions. According to the U.S. Census Bureau data released Tuesday September 13th, 2011, the nation's poverty rate rose to 15.1% in 2010, up from 14.3% in 2009 and to its highest level...
- Personal income in the United StatesPersonal income in the United StatesPersonal income is an individual’s total earnings from wages, investment interest, and other sources. In the United States the most widely cited personal income statistics are the Bureau of Economic Analysis’s personal income and the Census Bureau’s per capita money income...
- Household income in the United StatesHousehold income in the United StatesHousehold income is a measure commonly used by the United States government and private institutions, that counts the income of all residents over the age of 18 in each household, including not only all wages and salaries, but such items as unemployment insurance, disability payments, child support...
- International ranking of household income
- Economy of the United StatesEconomy of the United StatesThe economy of the United States is the world's largest national economy. Its nominal GDP was estimated to be nearly $14.5 trillion in 2010, approximately a quarter of nominal global GDP. The European Union has a larger collective economy, but is not a single nation...
- Human Development IndexHuman Development IndexThe Human Development Index is a composite statistic used to rank countries by level of "human development" and separate "very high human development", "high human development", "medium human development", and "low human development" countries...
- Gross domestic product
- Federal assistance in the United StatesFederal assistance in the United StatesIn the United States, federal assistance, also known as federal aid, federal benefits, or federal funds, is defined as any federal program, project, service, and activity provided by the federal government that directly assists or benefits the American public in the areas of education, health,...
- Male-female income disparity in the USAMale-female income disparity in the USAMale–female income diference, also referred to as the "gender gap in earnings" in the United States, and as the "gender wage gap", the "gender earnings gap" and the "gender pay gap", refers usually to the ratio of female to male median yearly earnings among full-time, year-round workers.The...
- Social class in the United States