It’s always good to know how much the average American makes and how incomes across the country vary. Knowing this information can help make informed decisions about career paths, budgets, and investments.
So, I decided to take a closer look at the average income in America, as well as how income varies by gender, race, state, and other factors. I’ll also provide tips for how to make the most of your salary, no matter what it is.
- Average U.S. Income
- Income by State
- Average income by Age
- Average income by Occupation
- What Income is Classed as Middle Class?
- How Many Americans Earn Over $100,000?
- How Much Do Americans Make in a Lifetime?
- Average Income by Gender
- Average Income by Race
- What About Your Income?
- Ways to Stretch Any Income
- Support for Low-Income Earners
- Final Thoughts
Average U.S. Income
In the United States, understanding income trends is essential for grasping the economic realities affecting everyday citizens. As of Q2 of last year, the median weekly income for full-time workers is $1,041, which would amount to an annual income of $54,132 if maintained throughout the year.
Comparing this figure with the mean income of $71,456 in the year prior to that, it becomes evident that income inequality plays a significant role in the country’s financial mechanics.
Mean vs median…
While median income accurately reflects the middle point in the salary range and is generally considered to be more representative of the average income in a population, mean income is greatly influenced by extreme values, such as the earnings of a small percentage of high-income individuals.
Moreover, this disparity between median and mean income demonstrates the existence of substantial income inequality in the United States. An anomaly that can lead to far-reaching economic, social, and political consequences. Including diminished social mobility, increased poverty rates, and heightened political polarization.
Income by State
The landscape of the average American income sees a remarkable disparity from state to state, painting a unique picture of wealth distribution throughout the nation. Boasting the highest median household income of $94,384, Maryland emerges as a leader in terms of its resident’s financial success, surpassing the achievements of other states such as the District of Columbia, New Hampshire, Massachusetts, and New Jersey, to name a few.
However, not all states share the same prosperous fate as their counterparts. Mississippi, for instance, suffers through the lowest median household income of $44,966. Bearing the load of not only its plight but also the likes of other nearby struggling states like Kentucky, Tennessee, Alabama, and West Virginia.
Moreover, these vast differences in household income reflect the economic discrepancies between states. Warranting a closer examination of the factors and social consequences underlying these contrasting realities.
Average income by Age
A closer look at the median weekly earnings of Americans reveals that income levels fluctuate as individuals progress through different age brackets. Based on BLS data from the second quarter of last year, it becomes evident that the highest median income in the US is enjoyed by those aged between 45 and 54 years old.
Of course, an individual’s income is not solely dependent on age. Other factors such as occupation, state, and education level can play a significant role in shaping one’s earnings.
But for a better understanding of the income disparities across age groups, the following data can be instructive.
The age curve…
Adolescents aged 16 to 19 can expect around $603 per week, while young adults between the ages of 20 and 24 earn about $703. As individuals advance in years — and presumably experience level — the median earnings show an upward trend. With 25-to-34-year-olds earning $976 and 35-to-44-year-olds taking home $1,180. At 45-to-54, those same people reach the peak at a median of $1,181.
However, it is crucial to note that as individuals approach the later stages of life, the median income begins to decline. 55-to-64-year-olds earn $1,134, and those aged 65 and above draw an approximate $1,023.
Average income by Occupation
As mentioned, the gap in earnings can be attributed to the type of occupation an individual engages in, as highlighted by the BLS data from that latest fiscal year. A striking contrast can be observed between management, professional, and related occupations. These enjoy the highest median weekly income of $1,459. However, service occupations have the lowest median weekly income of $707.
The sector spectrum further diversifies, with sales and office jobs earning a median weekly income of $867, while occupations in natural resources, construction, and maintenance receive $964. Those in production, transportation, and material moving make $807.
Depending on where you live…
Additionally, location plays a critical role in affecting these income averages, with certain regions offering higher compensation in specific industries.
Overall, understanding the income variations across various occupations and regions can provide useful insight into the American job market and help job seekers make informed decisions about their career choices.
What Income is Classed as Middle Class?
Defining middle-class income can be challenging, as it depends largely on geographical location and a variety of other factors. Interestingly, the Pew Research Center has conducted comprehensive studies on this matter, revealing that, on average, a salary range of $30,000 to $90,000 annually is generally considered a middle-class income.
But once again…
It’s essential to understand that these numbers can vary depending on the cost of living and household size, which contribute to one’s perception of financial security and socioeconomic status.
Ultimately, what constitutes a middle-class lifestyle is fluid, and understanding this complexity requires a nuanced perspective that acknowledges the diverse economic realities faced by individuals across the globe.
How Many Americans Earn Over $100,000?
Delving into the financial upper classes of America, it’s fascinating to discover that last year, 21 million workers earned a salary exceeding $100,000. This surprising revelation, constituting around 17% of American workers, has its roots in U.S. Census Bureau data.
It’s clear that a lucrative career beckons those who venture into the realms of medicine, with anesthesiologists commanding some of the highest six-figure salaries in the nation. In the quest for prosperity and the American dream, these figures represent significant income milestones and bear witness to the potential heights reachable by hard-working, well-educated, and dedicated individuals.
How Much Do Americans Make in a Lifetime?
Again, this answer will be heavily influenced by several variables, such as industry, education level, gender, and location.
According to the Social Security Administration’s data, the standard lifetime gross income range for American men falls somewhere between $1.13 million and $3.05 million.
For women, the range is much lower – from $510,000 to $1.86 million. These disparities can be attributed to various societal and economic factors influencing each individual’s career journey.
Ultimately though, it is clear that gender inequality in the economic sector is just one of a multitude of dynamics that impact the amount an average American can potentially earn during their lifetime.
Average Income by Gender
Despite making significant strides in recent years, the persistent issue of income inequality between American men and women remains a pressing concern in the United States.
In the latest relative consensus, men’s median salaries amounted to $50,391. Women earned considerably less at a median figure of $36,726, or 73% of men’s earnings. This gap is even more apparent among self-employed individuals, where women earn a mere 60% of their male counterparts.
The private sector sees a staggering 70% gender wage gap, so government workers are not exempt from this. While women’s salaries have undergone growth since 2016, the overall gender pay gap has barely budged. Women still earn only 73% of what men earn, a figure still alarmingly similar to that of 2016.
Consequently, the ongoing challenge to bridge this gap and establish an equitable income landscape remains at the forefront of societal challenges today.
Average Income by Race
The income disparities among various racial groups in the United States showcase the connection between these gaps and differences in educational attainment, access to opportunities, and poverty rates.
For instance, Asian Americans boast the highest median income at $110,572, largely attributed to a higher percentage of them achieving educational milestones compared to other races. Conversely, Black Americans, with the lowest median income of $46,774, experience higher poverty rates and have fewer high school or degree completions than any other racial group, except for Hispanic Americans.
Such factors make it challenging for these communities to climb the income ladder in a similar fashion to their Asian and White counterparts.
Who face relatively similar poverty rates…
Additional racial groups, such as Native Hawaiians and other Pacific Islanders, those identifying as two or more races, and American Indians and Alaska Natives, display varying median incomes. And these similarly reflect their unique respective experiences with education and poverty in the United States.
What About Your Income?
Analyzing national income data is an insightful way to assess your own income in comparison with the USA averages. As well as to identify areas where you may improve your earnings.
As you can see by now…
Various factors like gender, race, age, occupation, and location influence income levels, but this does not mean you are powerless to make changes.
Among the ways to boost your income are developing new job skills, negotiating a raise based on industry salary data, or exploring better job opportunities in different regions.
It is paramount, however, to recognize that income is just one element of financial well-being. How you manage and utilize your money contributes significantly to your overall financial security and success. Just as much as the amount you earn, in fact.
So, moving on from the average income in America, let’s talk about…
Ways to Stretch Any Income
In essence, stretching your income effectively involves a combination of prudent financial planning and smart spending habits. So, here are some ways you can make your income go further…
Create a budget
This can help you to track your income and expenses, identify areas where you can cut back, and make informed financial decisions. You can create a budget using a spreadsheet, online tools, or simply pen and paper.
Make sure to include all your income sources, such as your salary, rental income, or freelance income. Also, include all of your expenses. That’s fixed costs like rent or mortgage, utilities, food, transportation, and discretionary expenses such as entertainment, hobbies, and travel.
Once you have created a budget, you can start identifying areas where you can reduce your expenses. One way is by eliminating unnecessary services like cable or subscription services. You can also cook at home more often, shop during sales events, and use coupons or discount codes when shopping online.
Look for ways to reduce your transportation costs, such as taking public transportation or carpooling. You can also consider downsizing your home or moving to a less expensive area.
Save on utilities
Energy-efficient appliances and light bulbs can save you money on your energy bill. You can also turn off lights and electronics when not in use and adjust your thermostat to save on heating and cooling costs. Or consider installing a programmable thermostat to automate your energy consumption and save even more.
Avoiding unnecessary debt is essential to financial health. So, avoid using credit cards for purchases you can’t afford to pay off in full each month. Moreover, if you have outstanding debt, prioritize paying it off as soon as possible. Starting with high-interest debt like credit card balances.
You can also consolidate your debt using a balance transfer credit card or personal loan.
Use tools to help pay off your debt
There are various tools available to help you pay off debt more effectively, such as budgeting apps, balance transfer credit cards, personal loans, and mortgage refinancing. Research these options to determine which ones are best for your situation.
Build an emergency fund
Creating an emergency fund can help you avoid dipping into your regular income and prevent financial setbacks. Aim to save three to six months’ worth of expenses in an easily accessible account.
Shopping smart means comparing prices, buying in bulk for everyday items, and looking for sales or discounts. Use apps or websites to find the best deals on groceries, clothes, and other items. Avoid impulse purchases and stick to your budget.
Plan for the future
Planning for your financial future includes saving for retirement, setting financial goals, and investing wisely. Consider contributing to a 401(k) or IRA and consult with a financial advisor to help you create a long-term financial plan.
Align credit card rewards with spending
Choose a credit card that offers rewards or cash back on purchases you make regularly. For example, if you spend a lot on groceries, look for a credit card that offers cashback on grocery purchases.
Open a high-yield savings account
A high-yield savings account can help you earn more interest on your savings than a traditional savings account. Research different options to find one that offers a high-interest rate and low fees.
Open a brokerage account and invest for the long-term
A brokerage account can help you invest in stocks, bonds, and other assets to grow your wealth over time. Consider consulting with a financial advisor to help you create an investment strategy that aligns with your financial goals and risk tolerance.
If you’re researching the average income in America because you’re struggling to make ends meet, you might be interested in…
Support for Low-Income Earners
Sometimes, no matter how hard we try, our circumstances can keep us trapped by low-income limitations.
If this is you, or someone you love, please take a look at the variety of support options available to you, including How to Get Wi-Fi with SNAP Benefits or Free Internet for Low-Income Families. It’s also possible to acquire a Free Refrigerator for Low Income Families and a Free Government Landline Phone Service.
Then you can secure the services of a Free Divorce Lawyer for Low-Income individuals.
Already have an EBT?
Simply search our site for the support you need in 2023.
The latest figures show that with an average weekly income for full-time workers of $1,041, the annual average American income is $54,132
Learning how to stretch your income is an important part of your financial health. Your budget should be the foundation of this process, and you can use it to identify areas where you can reduce expenses or increase savings.
Consider using tools like credit card rewards, high-yield savings accounts, and brokerage accounts to grow your wealth over time. Combined with careful planning and knowing where you stand in the average pay range, you can be more aware of where you can, should, and need to be. And make better financial decisions for you and your family.