For the second year in a row, the income of American families failed to make headway against inflation according to results of the March 1982 Current Population Survey (CPS) conducted by the Bureau of the Census. In 1981, the median family income was $22,390, an increase of 6.5 percent before adjusting for the change in consumer prices. After adjusting for a 10.4-percent increase in consumer prices between 1980 and 1981, however, median family income decreased by 3.5 percent.¹ This decline was somewhat smaller than the decline in real median family income of 5.5 percent which occurred between 1979 and 1980.

Between 1980 and 1981 the number of persons below the poverty level rose from 29.6 million to 31.8 million, an increase of 2.2 million or 7.4 percent.² This means that approximately 1 out of every 7 persons was living below the poverty level in 1981. Between 1979 and 1980, the number of persons below the poverty level rose by 3.2 million or 12.3 percent; the difference in the increases is not statistically significant. The poverty threshold in 1981 for a family of four was $9,287.

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¹ Changes in real income refer to comparisons after adjusting for inflation. The percentage change in prices between 1980 and 1981 was computed by dividing the annual average Consumer Price Index (CPI) for 1981 by the annual average value of the CPI for 1980. Research has shown that, in recent years, the treatment of home prices and mortgage interest costs in the calculation of the CPI tended to overstate the increase in prices experienced by the average consumer. See table A-2 of appendix A for CPI's from 1947 to 1981.
² All comparisons between 1980 and 1981 are made using the modified poverty definition. For a further explanation, see the section entitled "Changes in the Definition of Poverty."