Income and poverty data in this report for 1985 are the first estimates based entirely on households selected from the 1980 census-based sample design. Estimates by type of residence categories such as metropolitan, nonmetropolitan, farm, and nonfarm, which were omitted from the 1984 report because of the mixed 1970 and 1980 census sampling frame used for the March 1985 CPS, have been resumed in this report. The residence categories reflect metropolitan areas defined as of June 1984. In addition, the March 1986 CPS income supplement was revised to allow for the coding of larger earnings amounts on the questionnaire. A description of this change and its effect on estimates in this report can be found in the section discussing the revised earnings question.

For the third year in a row, median family money income continued to move ahead of inflation according to results of the March 1986 Current Population Survey (CPS) conducted by the Bureau of the Census. In 1985, median family income was $27,740, 4.9 percent higher than the 1984 median of $26,430. After adjusting for the 3.6-percent increase in consumer prices between 1984 and 1985, real median family income increased by 1.3 percent.¹ The 1.3-percent real increase in family income between 1984 and 1985 follows increases of 2.8 percent for 1983-84 and 1.6 percent for 1982-83.²

Both White families and Black families posted gains in real median income in 1985. The median income for White families was $29,150, 1.7 percent higher than in 1984. The median income for Black families was $16,790, 5.0 percent higher than in 1984. Spanish median family income, $19,030 in 1985, showed no statistically significant change from 1984.³

The median income of married-couple families was $31,100 in 1985; with the wife in the paid labor force it was $36,430. In March 1986, about 80 percent of all families were married couples of which 54 percent had a wife in the paid labor force. Ten years earlier, 84 percent of all families were married couples and 44 percent had the wife in the paid labor force. The median income for families with a female householder, no husband present, was $13,660 in 1985.

Data by educational attainment level of the family householder indicate that families in which the householder completed high school had a median income of $27,470 in 1985. In contrast, families with a householder completing 4 years of college had a median income of $43,190, and those with 5 or more years of college had a median of $50,530.

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¹ Changes in real income refer to comparisons after adjusting for inflation. The percentage change in prices between 1984 and 1985 was computed by dividing the annual average Consumer Price Index (CPI) for 1985 by the annual average value of the CPI for 1984. See table A-2 of appendix A for CPI's from 1947 to 1985.
² The percent change in median income between 1982 and 1983 was not significantly different from the 1983-84 or 1984-85 changes.
³ The percent changes in median family income for Whites, Blacks, and Hispanics were not statistically different from one another.