How women raised the median family income
Share Now on:
This is just one of the stories from our “I’ve Always Wondered” series, where we tackle all of your questions about the world of business, no matter how big or small. Ever wondered if recycling is worth it? Or how store brands stack up against name brands? Check out more from the series here.
Listener Christopher Skrocke sent in this email:
“I frequently hear comparisons of family incomes in 1980 and today. But I don’t think this is an apples-to-apples comparison. I remember that in the early ’80s, it was a big story that women were joining the workforce.” Skrocke asks how the increase in women earners can be squared with widespread income stagnation in recent decades.
In 1953, U.S. Census Bureau data show median family income was $32,970 (in inflation-adjusted 2015 dollars). By 1970, it had risen to $53,767, an increase of 63 percent.
According to Elise Gould at the Economic Policy Institute, the three decades after World War II were good for most American families.
“From 1947 to 1979, you saw broad-based income growth. From the lowest-fifth up to the top 5 percent of income, there was relatively strong growth across the board.”
But from the late 1970s on, growth in median family income slowed down. It increased just 23 percent from 1980 to 2015, and growth wasn’t distributed very evenly.
And as family income disparity has increased, the middle class has been hollowed out, said Rakesh Kochhar of the Pew Research Center, citing a recent report.
“The share of adults who live in middle-income households has fallen to a point where they are no longer the economic majority in the United States. In 1971, more than 60 percent of adults were in middle-income households. By 2015, it was 50 percent. And the share of income in the hands of middle-income households has fallen from more than 60 percent in 1971, to about 40 percent today.”
- RELATED: Renters facing affordability crisis as wages stagnate
- Ending inequality: Chuck Collins’ message to the 1 percent
- Oxfam reports that the assets of more than 3 billion don’t equal those of eight rich men
As women have entered the workforce in greater numbers, they’ve also contributed more to family income. Women’s labor-force participation surged from 43 percent in 1970 to 58 percent in 1990, according to the Bureau of Labor Statistics. Women’s participation peaked in the early 2000s at just over 60 percent and has fallen several points (as has men’s labor-force participation) since the Great Recession.
Starting in the 1970s, said economist Heidi Hartmann, president of the Institute for Women’s Policy Research, “we saw gains in income for the families where women were working. They worked anywhere from 700 to 1,000 more hours per year on average.”
Many men, meanwhile, have experienced a deterioration in earning power and labor demand in recent decades.
“At the middle, the median man hasn’t gained in real earnings since the late 1970s,” Hartmann said. “Middle-class family incomes wouldn’t have grown at all during the period if it had not been for women’s work.”
According to the Census Bureau, the median income for single-earner families has risen 6 percent since 1980 to $48,626 per year (in inflation-adjusted 2015 dollars). Median income for two-earner families has risen 42 percent, to $95,837 per year.
Hartmann said the greatest financial benefit of having two earners has accrued to families that have higher earning power, education and job skills to begin with.
“The middle-income mothers, and especially the high-income mothers, could work more and contribute more to family income. That’s because for them, the child care costs are affordable,” she said.
So to answer listener Skrocke’s question: Most of the increase in median family income since 1980 (84 percent, according to analysis by Gould of the Economic Policy Institute) is due not to wages rising for individual workers, but rather to more family members — especially women — going to work and working more hours to earn a paycheck.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.
Donate now to get almost any thank-you gift.