Income Demographics

Real estate and other material possessions contribute to affluence, but a person's disposable income is the single, most important indicator of his or her economic status. As shown in Figure 10-1, the median income for both men and women rises sharply from young adulthood to middle age and then declines fairly abruptly in old age. The increase in income from young to middle adulthood is, of course, accounted for by the fact that most young people must become established in a job or profession, gaining experience and advancement before they begin to make high salaries.

Despite the fact that their average incomes are lower than those of young and middle-aged adults, older adults are much better off financially than they were only a few decades ago. Average income has increased for all demographic groups of older Americans—men and women, blacks, whites, and Hispanics, married and unmarried. Today's older Americans have much more discretionary income than formerly, a circumstance that has encouraged business to develop products and services specially for the over-age-55 consumer market. Increases in Social Security benefits, expansion of private pension funds, property tax relief, supplemental government programs, and senior discounts offered by many commercial organizations allow older

Race/Ethnicity:' White Black HispanicJ

Region Northeast' Midwest South1 West |

Total i

Annual Income of Men ($1000) Annual Income of Women ($1000)

Figure 10-1 Median annual incomes of men and women in the United States in 1995 by race, age, and geographical region. (Based on data from U.S. Bureau of the Census, September 1996.)

Annual Income of Men ($1000) Annual Income of Women ($1000)

Figure 10-1 Median annual incomes of men and women in the United States in 1995 by race, age, and geographical region. (Based on data from U.S. Bureau of the Census, September 1996.)

adults to spread their money further than younger adults are able to do. Another factor, the high percentage of home owners in the 65+ age group of Americans, has led to the characterization of many older adults as being "house rich" but "cash poor." However, the financial burden of older adults with low incomes is moderated by Supplemental Security Income (SSI), Medicaid, food stamps, and other sources of in-kind income— goods and services that require no expenditures.

Income varies not only with age, but also with gender, ethnicity, geographical region, education, and other demographic variables. Average income is higher for men than women, higher for whites than blacks and Hispanics, higher in the Northeast and Midwest than in the South and West, and higher in the suburbs than in the central cities (Taeuber, 1993). As might be expected, median annual income for both full- and part-time workers varies directly with educational attainment. Even when education is equated, however, the annual median incomes of full-time female workers is less than 80% of that for full-time male workers (see Table 10-1). This is true for all ages and ethnic groups and for women in various circumstances. Older widows, for example, have less income than older widowers. Married women, who share in the wealth of their husbands, tend to have higher incomes than single women and widows. To some extent, the income differential between the sexes is due to the type of industry or other organization in which men and women work, as well as the specific job and level within the organization. For example, only a disproportionately small percentage of women have been able to break into the upper echelons of corporate management.

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