In this world’s largest evolving economy, the cost of living is increasing, and the national average salary is ever-evolving. It, therefore, becomes difficult to earn enough to be living comfortably.
Are you wondering how much the average American makes and where your salary stacks up? What does how much you make depend on?
This post tackles these questions and a few other basic statistics that fall within 2019 and the current year.
[Read More: Lending Money – Trending Credit Cards Topics]
What’s the Average American Wage?
A full-time American worker’s median weekly personal income was approximately $1,037 per week for the first quarter of 2022. (BLS)
As of December 2021, the highest-paid occupation is managerial, with a $126,480 average annual salary, and the lowest is food preparation and serving, with $27,650.
Further inspection of the national income shows the gender pay gap. Women earned weekly incomes of $939,16.8% less than their counterparts, who achieved a median income of $1,128 per week.
The average American salary varies based on gender, background, vocation, position, education, race, and geography.
Let’s explore some valuable statistics about American wages.
In 2021, the poverty rate in the US was around 12.5%
(US Census Bureau, Poverty Centre Colombia)
The poverty rate has recently gone up. Again! Most probably due to the pandemic, it has risen from 11.4% in 2020 to 12.5% in 2021. Although this is not as bad as in 1993, when one out of seven lived below the poverty line – 12.5% leaves room for improvement.
8,912,000 children were in poverty.
Maryland’s real median household income during Covid
A median household income of $94,384 made Maryland the wealthiest state in the US in 2020.
On the other hand, Mississippi, the poorest State of 2020, had a median household income of less than half as much – $44,966.
The average median household income for that year for all the states was $67,521.
The median household income peaked in 2019 at $69,560
(US Census Bureau)
Between 2014 and 2019, the average and median American household incomes have increased yearly. It peaked in 2019 at $69,560. This trend didn’t persist until 2020 because of the pandemic and the economic stagnation that came with it. Covid shook things up, and the median household income fell to 67,521.
[Read More: Lending Money – Crypto Topics Information]
Women working full-time earned 17% less than men in 2020
(US Census Bureau)
In 2020, men with full-time jobs earned median earnings of $61,417. However, women in the same position earned $50,982, showing the gender wage gap still exists and is very wide.
The United Census Bureau shows that between 2018 and 2019, the total number of full-time workers grew by around $1.2 million.
The District of Columbia offers the highest income in 2022
(World Population Review)
Even though the District of Colombia is not a real state, it’s ranked by virtue of it having the highest earning demographic in the country at an average of $88,702 per year. Mississippi once again falls at the bottom of the list at $41,776.
Black people had the highest poverty rate in 2020, at 19.5%
(US Census Bureau)
Despite the government policies in response to Covid and the economic decline, the most vulnerable groups in society still fell below the poverty line. At 19.5%, Black people were the poorest demographic in the country. Though they did not experience any significant change from 2019.19.5% of them were below the poverty line.
Hispanic people closely followed them at 17%, and Asian people – were the least affected, at 8.1%.
Meet the middle-class of American society
As of 2018, the middle class comprises 52% of the American population, according to Pew Research Centre. This number has fallen consistently since 1971 to 50% in 2021. Their income level ranged between $30,000 and $90,000 in 2020. In 2021, the middle class held only 27.6 % of the country’s wealth. Compare this to the 2.6% that the bottom 50 hold and the 33.3% held by the top 1%.
You had to earn at least $538,926 to rank among the top 1% of all earners
According to USA Today, it will take an annual income of $538,926 for you to be ranked among the top 1%earners nationwide. The average annual income of the 1.4 million taxpayers that meet this threshold is around $1.7 million, which is a multiple of the average income among all taxpayers. Due to various factors like education and taxes, wealth is more concentrated in some parts of the country than in others. As a result, the amount it takes to be among the top 1% in each state varies considerably. Your Resource For Everything Finance
What Is a Good Average Salary in the US?
Economists calculate the average salary by considering taxes, dependents, debts-personal, and student loans.
Given that these are different in every state and affect the overall disposable income, it becomes difficult to find a good national salary.
An annual income of $75,000 is estimated to cover essentials and leave enough for a comfortable life. Thus it’s considered a good average salary.
Hopefully, we’ve shed some light on important factors and discrepancies that affect what the average American makes. As indicated above, the average income is determined through education, gender, and location. We are all in different situations. Even though no salary is perfect for all, most of the time, the state average and even the national average are enough for all essentials and a little bit left over.
Kindly note that the average salary is not the most accurate representation of the economy. The difference between the highest and lowest state average salaries is significant. Furthermore, the wealth disparity is huge. Much so that the median income better portrays what the middle-class employee earns.
The income gaps are likely to persist as recession, inflation, and the effect of the pandemic are to be felt for years to come.