The relative stability in median family earnings between 2000 and 2005 masked a marked decline in the earnings of those families at the bottom of the income distribution.
To analyze earnings disparities, families were divided into five groups (or quintiles), based on their earnings levels. Median earnings for the 20% of families with the highest earnings were then compared to median earnings for the 20% with the lowest earnings.
Between 2000 and 2005, median earnings for the one-fifth of families at the bottom of the earnings distribution declined 9.1%, to $14,176. Earnings for this group have fallen steadily since 1980.
On the other hand, median earnings for the one-fifth of families at the top of the distribution increased 5.1%, to $140,905, during the same five years.
The ratio of median earnings in the top quintile to median earnings in the bottom quintile represents a common index of earnings inequality. In 2000, the median family earnings from the one-fifth of families with the highest earnings were 8.6 times as much as the median family earnings from the quintile with the lowest earnings. By 2005, the top one-fifth of families were earning 9.9 times as much as those with the lowest.