There are approximately 100 million households—a group of people sharing living quarters—in the United States. The number of residents per household has consistently shrunk during this century, from over four to under three, as illustrated in Figure 4.14.
Figure 4.14 Household occupancy
Figure 4.15 Proportion of households by type
Figure 4.16 Percentage of incarcerated residents
Ten percent of households do not have an automobile, and 97.6% have a telephone. So-called land line telephones may start to fall as apartment dwellers, especially students, begin to rely exclusively on cell phones. Just under 99% of households have complete plumbing facilities (running water, bath or shower, flush toilet), up from 54.7% in 1940.
How much income do these households make? What is the distribution of income? One way of assessing the distribution is to use quintiles to measure dispersion. A quintile is one fifth, or 20%, of a group. Thus the top income quintile represents the top 20% of income earners, the next represents those ranking 60%–80%, and so on. Figure 4.17 shows the earnings of the top, middle, and bottom quintiles.
Figure 4.17 Income shares for three quintiles
Figure 4.19 Family income, cumulative percentage change
Real income gains in percentage terms have been larger for richer groups, even though the poor have also seen substantially increased incomes.
If the poor have fared less well than the rich in percentage terms, how have African Americans fared? After World War II, African American families earned about 50% of white family income. This ratio has risen gradually, noticeably in the 1960s after the Civil Rights Act—legislation that prohibited segregation based on race in schools, public places, and employment—that is credited with integrating workplaces throughout the southern United States. African American family income lagged white income growth throughout the 1980s but has been rising again, a trend illustrated in Figure 4.20.
Figure 4.20 Black family income as a percentage of white income
There have been three major inflations in the past century. Both World War I and World War II, with a large portion of the goods and services diverted to military use, saw significant inflations. In addition, there was a substantial inflation during the 1970s, after the Vietnam War in the 1960s. The price level fell during the Great Depression, a prolonged and severe economic downturn from 1929 to 1939. Falling price levels create investment problems because inflation-adjusted interest rates, which must adjust for deflation, are forced to be high, since unadjusted interest rates cannot be negative. Changes in the absolute price level are hard to estimate, so the change is separately graphed in Figure 4.22.
Figure 4.21 Consumer price index (1982 = 100)
Moreover, a much greater fraction of expenditures on food are spent away from home, a fraction that has risen from under 15% to 40%.
Figure 4.23 Food expenditure as percentage of income, and proportion spent out
Figure 4.24 After-tax income shares