Measuring Income

How we measure income and poverty status

Median Income Indicators:

Median income represents the level at which exactly half of the incomes are above and half are below. Median is not to be confused with another measurement of central tendency, the average, which is based on the sum of all incomes divided by the total number of units measured. Demographers favor median income because all units are weighted equally. If averages were used the relatively small population (outliers) making extremely high incomes would skew the measurements resulting in a higher number of central tendency.

For households and families, the median income is based on the distribution of the total number of households and families including those with no income. The median income for individuals is based on individuals 15 years old and over with income. Median income for households, families, and individuals is computed on the basis of a standard distribution. Median income is rounded to the nearest whole dollar.

Median household income (MIHH): A household includes all the people who occupy a housing unit. The diference between household and family median income was $13,876 in 2005, the last year published data was available for both indicators.

Median family income (Fam. MI): A family is one householder and one or more people living in the same household who are related to the householder by birth, marriage or adoption. Every family is a household but not every household is a family. The family median income rate is used by agencies such as the U.S. Department of Housing and Urban Development (HUD).

• 50% of the median income is termed “very low-income.” HUD uses this measure as a basis for determining housing assistance eligibility.
• 30% and 80% of median income are other benchmarks sometimes cited for social planning

Federal Poverty Level

The federal poverty level (FPL) is updated annually by the U.S. Census Bureau based on the cost of a defined market basket of goods deemed to be the minimum necessary for survival. The FPL is adjusted based on the number of persons in a family but the standard format for publishing the FPL is based on a family of four.

Because the cost of living can vary widely in different communities and is often higher in urban areas, the FPL may be of limited use. One attempt to increase the utility of the FPL is to use 200% of FPL as a measure of low-income status. The concept is that families making greater than 200% should have sufficient income to cover basic living expenses. Again, this rate has its limitations because of its variable basis. Read more about the challenges in measuring poverty

• Federal Poverty Level - considered extremely low income or "poverty".
• 200% Federal Poverty Level – a widely used alternative to FPL as a measure of low income status.

Local Income Levels and Federal Poverty Rate

All figures below are based on a family of four, this family size is the most commonly cited published format.

Median Income

• The 2007 median family income for the Seattle-Bellevue-Everett PMSA (Primary Metropolitan Statistical Area): $75,600
• 80% of Family median income: $59,600
• 50% of Family median income: $38,950
• 30% of Family median income: $23,360
• 2005 Median household income: $58,374

Federal Poverty Level

• Federal Poverty level for 2006: $20,444.
• 200% of the Federal Poverty in 2006: $40,888

Source: Claritas 2006 Update (Census Tract Level)

Return to Top
Return to Previous Page