WASHINGTON -- First the good news: The economic boom continues to generate more wealth for more Americans.

The median income for households rose last year by 3.5% adjusted for inflation, the fastest pace in three years. It's now at an all-time high of $38,885, the Census Bureau reported Thursday. The percentage of Americans living under the poverty line dropped to 12.7% last year from 13.3% in 1997, the lowest level since 1979.

Now the reality check.

Gains were surprisingly widespread. Virtually every type of household -- those headed by couples, by single mothers, old, young, immigrants, city dwellers, suburbanites -- saw big gains. For the first time since 1975, every region of the country saw significant increases in income. Poverty in the South, long considered the country's economic backwater, plunged, and is at a lower rate than in the West.

The census study, one of the governments best annual snapshots of economic well-being, also offers stark proof that life is still a struggle for millions of Americans. All the fanfare about this record-breaking expansion -- with tales of college dropouts turned IPO millionaires -- masks statistics showing that, overall, wages have barely budged for the decade as a whole. Last year's poverty rate was still 1.6 percentage points higher than it was in 1973, the twilight of America's last prolonged golden age.

The latest census numbers suggest two big reasons for this mixed performance. First, though this expansion, now in its ninth year, is remarkable in length, it was so slow for so long that the past three years of hypergrowth and low unemployment haven't been enough to make up lost ground. The pretax median income in 1998 the dividing point between those households in the top half of the pay heap and those in the bottom half was just $ 1,001 higher than it was in 1989. That translates into an average annual raise for the 1990s, adjusted for inflation, of $111.22, or a stingy 0.3%.

Signs of Improvement

Second, the official statistics say that the fruits of prosperity in this decade have been even more heavily skewed toward the rich than in prior booms. The top 5% of households last year -- those making $132,999 or more -- had 21.4% of all income, well above the 17.5% earned by the top 5% in 1967. Income inequality rose sharply through the 1980s and early'90s, and the level has held roughly constant since 1994. That means the disparity has locked in at a historically high level.

True, for many once-beleaguered families, there are plenty of signs that life is improving.

Five years ago, Geneva Haight was a part-time substitute teacher making $300 a week for the few weeks a year that she worked. Now she manages AmeriGas Propane LP's plant in Ardmore, Okla. Her promotion from customer service at the fuel supplier just over a year ago won her a 20% pay increase.

Mrs. Haight's brother, who had been struggling to find work, showed up one recent Monday in booming Ardmore. He started a construction job on Tuesday. His wife got hired at a cafe on Wednesday. "People seem to be able to improve their lot in life," says Mrs. Haight, 51 years old.

Yet there are also many families who still don't feel that way. "This country is still for those who have money," says Rose Woolery, a 46-year-old single mother in Boston. "For the people that don't have it, you're not going to get it." Her income has actually tumbled over the past three years, from $33,000 to $26,000. She lost her salaried position as a junior database analyst at Fidelity Investments in 1996 as her department downsized. So far, all she has been able to find is temp work at John Hancock Mutual Life Insurance Co. processing files for class-action suits.

Ms. Woolery is a victim of the continuing labor market instability that has helped keep overall wage gains muted. The 4.2% unemployment rate may mean work is plentiful, but it doesn't guarantee that jobs are secure or full-time.

Education and training in specific high-demand sectors still widen the divide between haves and have-nots. "There were other jobs in other departments at Fidelity, but I needed a college degree," says Ms. Woolery, who has only a high school diploma. Pay for women with her level of education rose by 1.2% last year. Those with some college rose by 5.9%.

"If you don't have computer skills, then you're out of luck," says Darcy Walker, a 39-year-old domestic-violence counselor near San Jose, Calif, in thriving Silicon Valley. In her field, she's seen pay gains, after inflation, of about 2% a year. She makes $13.50 an hour. She says she went shopping at CostCo recently and "I looked at the other women in their [new] cars -- it's painful to watch it around you and not be able to reach it."

Wages for many low-paid workers have been rising in recent years, but they still aren't high enough to lift significant numbers out of poverty, defined as $16,660 in annual income for a family of four. Even though the unemployment rate was higher in the earlier 1970s than it is today, poverty was less widespread then.

After 10 years on welfare, Estelle Sterling, a single mother of four, joined the millions of Americans who left the dole in the 1990s for the private sector. Hanky Panky LTD, a New York maker of women's-, has given her a paycheck, a 401(k) plan and a new self-assurance. Welfare, she says, "was a trap. ... Now I'm just so confident I can do anything." Yet after three years doing clerical and quality-control work, Ms. Sterling is paid just $6 an hour, or $12,000 a year.

In some ways, the census report may overstate the rise in living standards. Income is up, but so are the hours many families have to work to realize those gains. Working hours for the average family rose by about 2% from 1989 to 1998, reaching 3,149 last year, according to the Economic Policy Institute.

Pay Doubles

Avaren Ipsen and Tom Schleis have been trying to raise their two kids in Berkeley, Calif, on one income. She's been working on a Ph.D. in biblical literature. He works for a construction company. Mr. Schleis's pay doubled to $50,000 over the past six years -- "but most of that was overtime," says Ms. Ipsen. "He was never here. Six days a week for six years, from 6 a.m. to past 8 p.m. It was a boom, but we were so burnt out." Mr. Schleis recently took a managerial job with a higher salary, but no overtime -- an effective cut in pay to under $50,000.

Still, although economic progress hasn't been as rapid as many people would like, that doesn't mean it won't keep trickling down -- as long as unemployment stays at a quarter-century low and the pay gains of the past four years persist.

James Duncan, a 55-year-old security guard in Warner Robins, Ga., says his standard of living hasn't improved one bit over the past few years. If anything, it has declined. Traveling costs, including a spike in gas prices, forced him to give up his side business selling women's clothing at colleges along the East Coast.

Yet Mr. Duncan is training to be a big-rig truck driver. Pay would be about $31,000, or 25% more than he makes now. He carries a list of 45 trucking firms, desperate for drivers. "They come every day -- there's a possibility you can get hired before you complete the class," he says. Until now, the 1990s haven't been so great for him. As for the future, he says, "I'm looking forward to it."

a) that the today's low unemployment rate should be interpreted to mean that work is plentiful and jobs are secure and full time.

b) that the average income for households is at an 'all time high' of about $39,000 and poverty has dropped to its 'lowest level' since the late 1970s.

c) education and training are important in some sectors of the economy and help explain the divide between haves and have-nots.

d) all of the above are true.

e) only b and c are true.