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What is the Average Income in America?

by Ryan Kinnar5 min read
What you should know about Meet the average income in America

How much is the average income in America? You see, salaries vary largely based on different factors, such as education, ethnicity, industry, geographical location, gender, and occupation just to a name a few. By essence, it is any statistic that defines the earnings of an individual, family, or household. In case you are wondering, the government agency responsible for reporting average U.S. incomes (every September of each year) is none other than the U.S. Census Bureau.


The Census’ reports feature two kinds of averages. First is the mean, which simply totals all incomes and divides by the number of workers reporting. Second is the median income and it is the point where half the workers make more while the other half make less. Apparently, the mean income usually appears to be higher compared to the median income. This is due to the fact that few individuals who earn massive amounts of money tend to skew the results higher. As a result, they outweigh the many that make low incomes in the mean. Still, this results in an accurate estimate, as it is significantly affected by the so-called income inequality in the country. Hence, most reports utilize the median income.


There are three different groups by which the bureau reports average income in America. They are:

  • Income per person – Also known as income per capita, this is the income for each individual age 15 or older.
  • Family income – This one here is simply the average for a family of two or more related individuals who all live in a single household. Their relation to each other can vary from adoption to birth to marriage.
  • Household income – Unlike the family income, the household income refers to the average income of all people living in a single housing unit. It does not matter if the individuals living along with their families, alone, or even in a group of related persons.


Reports on average income in America
The Census reports average income in America using two types of averages: the mean and the median.


Information for Average Income in America

As per the Bureau of Labor Statistics or BLS, the median wage for American workers in the fourth quarter of 2017 was estimated at $857 per week or about $44,564 a year. This already encompasses the 40-hour workweek. Based on the figures, as compared to the previous year, wages were somehow 0.9 percent higher. It is important to keep in mind, however, that salaries can greatly vary based on location and occupation alone. For example, those who work in management, professional, and other related occupations manage to earn an average of $64,220 per year. As for those who work in service occupations, their average income per year is only $28,028. Jobs situated in large metropolitan cities seem to pay more as compared to the ones found in rural areas, though the former has a higher cost of living than the latter.


In 2016, the nominal median income per capita was reported at approximately $31,099, which fell behind the mean income per capita of $46,550. Real median household income, on the other hand, was estimated $59,039. Interestingly, this is the very first time since 2007 that income exceeded the $58,149 level. Even more so, it appears to be a bit higher than the $57,230 income of 2015. This was the first significant increase since the infamous Great Recession in 2015. To establish or distinguish poverty levels, the U.S. federal government utilizes the median household income. This was also utilized in determining the eligibility for Obamacare subsidies as well as other welfare programs.


Average Salaries for Men and Women in America

According to the report from BLS in the fourth quarter of 2017, men accumulated a median average of $49,192, which was higher compared to $39,988 from women. In other words, it was 81.3 percent of what men earned. As mentioned above, ethnicity or race plays a vital role in average income in America. For example, white women tend to earn 80.5 percent as much as their white men counterparts. As for black women, they earn 96 percent of their black men counterparts. Despite that, the latter earn a median salary of $35,412 or only 69.3% of what white males earn on average. If compared to women, the difference appears to be less, as black women’s median earnings average 82.7% only. The BLS also provides information on both Asian and Hispanic wage earners, both of whom earn a median salary of $55,172 and $34,164, respectively).


Average Salary by Age and Education

Salaries also vary by age and education. First off is age. Here, the numbers are somewhat different for both men and women. For example, men ages 55 to 64 reportedly achieved the highest annual earnings of $58,760. Women, however, only earned the highest wages ($43,420) when their ages were in between 45 and 54. The median annual earnings of workers age 25 and over, especially those without a high school degree, was at $27,612 by the end of 2017. This was low compared to high school graduates, albeit without a college degree, of $37,128. As for those with a bachelor’s degree, they earned an annual income of $66,456. College graduates who acquired advanced degrees – either a professional or master’s degree (or even higher) – had $77,324 as their median average.


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