Unexpectedly Intriguing!
April 23, 2013

Who is the median woman who doesn't earn a wage or a salary?

The question arises because of something we did last year. Specifically, when we extracted data for this demographic category of American income earner from other data published by the U.S. Census Bureau.

What makes this particular demographic category so interesting is that U.S. women who do not earn wages or salaries make up what is perhaps the lowest income earning group within the United States. To see what we mean, our chart below shows the inflation-adjusted median incomes earned by women from 1947 through 2010 in terms of constant 2010 U.S. dollars:

Women's Median Real Income in the U.S., with Recessions, 1947 - 2010

So just who is the median woman who doesn't earn a wage or a salary, who is part of the lowest ranks of income earners in the United States?

The answer came to us when we were looking at the history of average Social Security retirement and survivors benefits paid out over time, for which the Social Security Administration provides data for selected years going back to 1956. Our chart below shows what we found:

Real Annual Incomes of U.S. Women Without Wage or Salary Incomes, 
1956-2010 [Constant 2010 U.S. Dollars]

What we find is that the income earned by the median U.S. woman without a job paying a wage or salary for the years from 1956 through 2010 is largely consistent with benefits paid by Social Security, which means the median U.S. woman who doesn't earn a wage or salary is of retirement age - typically Age 62 (for those taking a reduced benefit) or older (for those taking non-reduced benefits).

We note that for much of the data, the median income is less than the average income. This is a characteristic of the lognormal distribution of income. However, we do observe an upward shift in the data over time, which we believe corresponds to the increasing number of women with wage and salary income in the United States, whose incomes reflect their growing share among Social Security recipients.

The variation in the median income data would also appear to be somewhat consistent with having an increasing portion of income derived from investments, such as those that might be earned through an Individual Retirement Account or 401(k)-type retirement investment programs, which we recognize in the surges for median income earned in 1986-1989, 1997-1999 and later in 2005-2006, which coincide with booming periods for the U.S. stock market.

Once again, that would be very consistent with the kind of income that would be earned by a woman of retirement age in the United States, who it would seem collectively make up the lowest income earning demographic group within the United States!

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