This fact further emphasizes the scenario of income inequality in the US. Below, you will see more about the median household income for each US state, for , based on data compiled by the US Census Bureau:. The following chart, based on the data provided by Statista, helps paint a better picture of how income is distributed in the United States according to the percentage of households holding specific income brackets:.
The US has been dealing with an income inequality problem for years, given that the highest earners tend to have a considerably larger income when compared to most individuals. Therefore, in practice, you can expect significant differences for all income categories, including the average retirement income, average white-collar income, and average blue-collar income.
Before anything else, it is important to point out the fact that the numbers that we are about to mention refer strictly to the income of one individual, thus completely disregarding the income of their family or the income of the household. It is important to mention that this is a slight increase when compared to the previous years, thus illustrating that.
Americans are currently earning higher salaries. It is certainly interesting to compare this to the cost of living. As such, studies are currently being carried out to determine whether the latest increase in the US median income has led to higher prices as well. The following table will give readers more insight into how the real US median income has changed for households since Source : Statista. Numerous factors have either a direct or indirect impact on the average income of Americans.
As you might expect, some jobs pay more, whereas some pay less. For instance, information technology IT generally offers higher salaries than other popular domains. Therefore, there are industry averages for each niche of work. Source: Payscale , Payscale. Despite this aspect, people living in expensive areas, such as San Francisco or New York, can generally expect a higher income since it is mandatory when ensuring that employees can sustain their lifestyle.
Therefore, the average wage in the US is considerably lower when compared to these high-income areas. Higher prices lead to higher salaries, according to economic laws, yet a higher salary in a high-income location will not generally buy you a better quality of life, given the high prices for all products and services.
This helps us better understand the average income in the USA compared to the rest of the world. Source: Statista. Experience and skill are some of the best-known factors that influence national income averages. Entry-level salaries are generally lower. Despite this aspect, pay increases flatten out following 15 years of experience, unless employees manage to be promoted to managerial positions. Source: MeasuringU. The US Census Bureau generally offers two main averages: the mean income and the median income.
The mean: It sums up all the income and divides it by the number of people who have reported their earnings. Keep in mind that this is the median income, meaning that it is not your usual mathematical average since that would considerably push the numbers up due to the incredibly large amounts of money earned by the richest US citizens. Do keep in mind that the average family income represents the amount earned by families consisting of at least two people who live in the same household at the same time.
Compared to , this average income has increased by 7. The answer to this question is quite complicated, given the complex taxation framework that operates in the United States. Because of this, it is yet again important for us to apply the median formulas to help determine a credible average paid in taxes. Firstly, it is important for us to agree on what a good salary actually represents since there are numerous conflicting opinions on this matter.
First off, good is above average and should be enough for people to cover living expenses, food, transportation expenses, utilities, apparel, and credit payments, while leaving a little wiggle room for savings and occasional purchases. Despite a higher standard deduction and numerous tax credits available to families with children, households with multiple dependents still have a hard time keeping up.
High living costs coupled with stagnant wages explain why so many households consist of multiple earners. The need for multiple incomes often poses challenges with regard to having children. Many families can't afford child care , but they also can't afford to slash their household income in half. It's a tricky problem with no particularly good solution at present. It's no secret that men out-earn women, even in situations where both have similar roles and qualifications. And that's telling, since self-employed folks often get to dictate their own rates.
The disparity exists among government workers, too. Here are the median earnings for men:. It's clear that closing the wage gap will take a lot of work. For now, the best women can probably do is be their own advocates and continuously research salary data for their industries to ensure that they're not being shortchanged on the basis of gender alone. As you progress in your career, your earnings usually climb.
But your earnings might also peak before declining as you near retirement. As you can see, Americans aged 45 to 54 earn more money than both their younger and older counterparts. By contrast, workers under 25 and over 64 earn the least.
That means a large number of retirees are, thankfully, supplementing their benefits with pension income, retirement plan withdrawals, earnings from part-time work, or other sources. The industry you work in largely influences your earnings potential. Not surprisingly, most of the highest-paid U. Here are the 10 most and least lucrative occupations by average annual income:. But remember, many of those same people are hundreds of thousands of dollars in debt from having gone to medical or dental school.
Will they come out ahead eventually? But for many people in the medical field, it takes several decades to recoup that investment. Most U. And workers in some industries really struggle to make a livable wage. Here's how the top five occupations compare to the bottom five:. These lower-paying jobs don't require specialized education or training, so they're often a last-but-necessary resort among the non-college-educated who need work.
Geography and earnings often go hand in hand, and in many cases, you'll earn a lot more in the same industry by moving from one state to another. Here's what median income looks like on a state-by-state basis, broken down by male and female earnings:.
If we count Washington, D. You'll often command a much higher salary in a major metro area than in a smaller city or suburb. Here are the top 15 metros where full-time employees ages 16 and over earn the highest annual median income:.
It's not surprising to see tech hubs like San Jose and San Francisco on this list. What is a bit surprising is to see the New York City metro absent from this list.
Clearly, its large number of low-income earners cancels out its plethora of hotshot bankers and lawyers. You might not have expected Los Alamos to be the 1 highest-earning metro area in the country, either. It also has the highest concentration of millionaires anywhere in the country.
This is because of the Los Alamos National Laboratory, a high-profile lab best known for being the birthplace of the atomic bomb. Many chemists, physicists, doctors, and other highly educated scientists work at LANL, and the average salary reflects that.
Of course, it's easy to be tempted to move to one of these metros in the hopes of snagging a massive pay boost. But remember, some of these cities are among the most expensive in the country to live in, so what you might gain in earnings, you'll likely end up spending on rent and other expenses.
Now that you have a better sense of how much Americans earn on a national level and how those earnings break down by factors such as gender, race, age, occupation, and location, you can take a closer look at your circumstances and see if any changes are in order. Median income means that half of the people earn less than that figure and half earn more. It's actually a more accurate assessment of how well Americans are doing. With average income, a small number of people with very high salaries—America's growing billionaire class, for example—could increase the figures, so they look better than they really are.
Actually, the latest figures are better than they've been for years. Based on recent U. This was the second annual increase in a row, while the increase in was the first annual increase since when the Great Recession left millions of Americans without work. Of particular note is the fact that the poverty rate also fell.
While it can be informative to look at nationwide income figures, taking a closer look at the data yields some interesting discoveries. Among them is a deep chasm between affluent and poor parts of the country. The Northeast is the most affluent part of the U. The figures show a continued gender gap in terms of pay, with women earning substantially less than men. Census figures across the board show that wages are on the rise—a sign that the economic recovery is starting to benefit Middle America.
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