Money / Economy
6 min Read
By Caitlyn Moorhead
- Average American Income
- Key Points
- US Income
- Median Annual Income
- Gender Pay Gap by Race
- Income by Race
- Average US Salary by State and Gender
- Income by Occupation
- What Is a Good Income?
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How much do you make and how does that compare to the national average wages of others in the United States? The answer to average annual wages or median salaries isn’t straightforward, and changes based on age, gender, race, advanced degrees and educational level. It is often said the American dream comes with unlimited earning potential but it can be helpful to compare potential to reality.
Read: What To Do If You Owe Back Taxes to the IRS
How Much Does the Average American Make?
According to the U.S. Bureau of Labor Statistics, the median weekly earnings for full-time workers in the fourth quarter of 2022 was $1,085. This was measured based on the earnings of 118.8 million full-time wage and salary workers. This would roughly put the national average salary at about $56,420.
National Average US Salary: Key Points
- Approximately 35% of U.S. households make over $100,000 per year, as reported by IBISWorld. However, a household may include more than one earner, so this doesn’t necessarily give an accurate representation of the average American income. In order to be in the top 10% income bracket in the U.S., you would need to make at least $132,676 per year, according to 2022 data.
- Compared to the year before, the statistics show a 7.4% increase in median income. But as pay has risen, so has inflation. Since income and inflation rates don’t tend to match, many Americans have struggled as prices for groceries, utilities, housing and more have continued to rise.
- Pay raises have also increased from the average 3% raise to 4.8%. However, wage increases are expected to decrease to 4% for 2023, according to Pearl Meyer’s survey on executive pay practices. While this is still higher than average, it could lead to more financial difficulties when paired with the effects of inflation.
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US Income by Age and Gender
While the median income gives a general representation of the nation’s income, it needs to be made clear this gets less accurate when you break it down into demographics such as age, gender and race. The chart below shows the average annual wage at varying ages for both men and women in general, and does not factor in nuances such as educational level and whether they’ve earned a high school diploma or college degree.
Women were one of the groups most affected by the COVID-19 pandemic. Women experienced less income security, since restrictions either shut down or greatly reduced some of the sectors most occupied by women. In addition, women often faced greater family duties as restrictions forced kids to stay home.
Median Annual Income for Age and Gender Breakdown
Age | Male | Female |
---|---|---|
Aged 16 to 19 | $32,188 | $31,096 |
Aged 20 to 24 | $40,612 | $36,504 |
Aged 25 to 34 | $56,420 | $50,440 |
Aged 35 to 44 | $69,108 | $57,824 |
Aged 45 to 54 | $72,228 | $57,096 |
Aged 55 to 64 | $72,436 | $54,288 |
Aged 65 and over | $62,400 | $48,152 |
Gender Pay Gap by Race
Government entities and other organizations are working to close the gender pay gap by proposing laws that would require transparency and information sharing to identify potential pay differences. The largest pay gap in gender tends to exist in the 45 to 64-year-old range, but this does not factor in race as an additional variable. The gender pay gap varies greatly by race:
- Asian women earned 81.5% of their male counterparts’ income.
- Black women earned 90% of their male counterparts’ income.
- Hispanic women earned 86.5% of their male counterparts’ income.
- White women earned 83% of their male counterparts’ income.
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Income by Race
The median income of Americans by race is as follows:
- Asian Americans — $1,496 per week
- Black Americans — $896 per week
- Hispanic Americans — $837 per week
- White Americans — $1,111 per week
Black and Hispanic Americans earn less than white and Asian Americans. Data from the U.S. Bureau of Labor Statistics shows that Black men made only 79.6% of the median for white men, while Hispanic men made only 75% of the median for white men. Meanwhile, Asian men and women made more than their white counterparts.
In addition to the racial income gap, there is also a large racial wealth gap. While white American families had a median wealth of $184,000 in 2019, Hispanic and Black American families had a median wealth of $38,000 and $23,000, respectively.
Wealth is often accumulated by having steady income, buying homes and having other financial assets. Therefore, some proposed policies to address this issue include tightening regulation surrounding discrimination in housing and increasing access to investment opportunities.
Average US Salary by State and Gender
If you want to see if you are from the lowest to highest average end of the salary spectrum, you compare what you get paid to what others make in different parts of the country.
Wage Breakdown by State and Gender
State | Male | Female |
---|---|---|
Alabama | $45,215 | $30,659 |
Alaska | $55,233 | $40,546 |
Arizona | $47,160 | $36,525 |
Arkansas | $40,736 | $31,354 |
California | $51,610 | $40,153 |
Colorado | $55,060 | $41,324 |
Connecticut | $57,834 | $41,915 |
Delaware | $50,723 | $38,958 |
District of Columbia | $83,567 | $73,937 |
Florida | $42,160 | $33,464 |
Georgia | $46,450 | $35,352 |
Hawaii | $50,225 | $37,393 |
Idaho | $44,488 | $30,468 |
Illinois | $51,775 | $38,371 |
Indiana | $48,163 | $34,035 |
Iowa | $48,605 | $35,073 |
Kansas | $47,418 | $34,588 |
Kentucky | $43,378 | $32,012 |
Louisiana | $47,145 | $30,522 |
Maine | $50,008 | $38,231 |
Maryland | $60,797 | $47,339 |
Massachusetts | $62,931 | $47,449 |
Michigan | $49,768 | $34,174 |
Minnesota | $53,536 | $40,829 |
Mississippi | $41,130 | $30,377 |
Missouri | $46,373 | $33,983 |
Montana | $45,597 | $32,085 |
Nebraska | $47,606 | $35,332 |
Nevada | $43,252 | $35,410 |
New Hampshire | $57,436 | $41,172 |
New Jersey | $62,143 | $44,878 |
New Mexico | $41,677 | $32,064 |
New York | $52,504 | $42,480 |
North Carolina | $46,011 | $35,024 |
North Dakota | $50,503 | $33,813 |
Ohio | $48,535 | $35,116 |
Oklahoma | $42,439 | $31,143 |
Oregon | $50,120 | $37,721 |
Pennsylvania | $51,664 | $37,286 |
Rhode Island | $51,845 | $40,533 |
South Carolina | $45,274 | $32,364 |
South Dakota | $46,495 | $34,081 |
Tennessee | $44,046 | $33,958 |
Texas | $47,776 | $34,773 |
Utah | $50,575 | $31,045 |
Vermont | $45,506 | $40,583 |
Virginia | $55,184 | $40,900 |
Washington | $61,391 | $41,619 |
West Virginia | $43,979 | $30,636 |
Wisconsin | $50,605 | $36,275 |
Wyoming | $50,235 | $30,661 |
Make Your Money Work for You
Income by Occupation
Occupation also has an impact on median weekly earnings. The highest-paying occupations are in management, professional and related occupations, where men and women make a median weekly income of $1,729 and $1,316, respectively. On the other hand, the lowest-paying occupations are in the service industry, where men and women make $782 and $652, respectively.
Unfortunately, opportunities for higher-paying careers are not as prevalent for individuals who have been given unequal educational opportunities. Schools that serve low-income students tend to have lower budgets and lack the resources that are needed to give high-quality education.
Throughout the pandemic, these issues were exacerbated by online schooling, which made it difficult for students to get the education they would inside a classroom. Even after pandemic restrictions were lifted, many public schools are still struggling with staffing issues and chronically-absent students. Educational inequality, especially in low-income communities, must be reduced to give all Americans a fair shot at earning a high-paying occupation.
Final Take To GO: What Is a Good Income?
There is no one answer for what makes a good income. It is a highly personal amount based on cost of living, debt and financial goals. In addition, take into account your occupation and qualifications to ensure you’re getting a fair wage.
If you want to make more money, learn to negotiate wage increases or start a side hustle. You could also cut down on expenses and find a budgeting method that works for you.
Taylor DeJesus contributed to the reporting for this article.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- U.S. Bureau of Labor Statistics. 2023. "Usual Weekly Earnings Summary."
- U.S. Bureau of Labor Statistics. 2023. "Table 2. Median usual weekly earnings of full-time wage and salary workers by selected characteristics, quarterly averages, not seasonally adjusted."
- U.S. Bureau of Labor Statistics. 2023. "Table 3. Median usual weekly earnings of full-time wage and salary workers by age, race, Hispanic or Latino ethnicity, and sex, fourth quarter 2022 averages, not seasonally adjusted."
- U.S. Department of the Treasury. 2022. "Racial Differences in Economic Security: The Racial Wealth Gap."
- United Nations. 2022. "Closing gender pay gaps is more important than ever."
- Pearl Meyer. "Looking Ahead to Executive Pay Practices in 2023."
- CNBC. 2022. "THE BOTTOM LINE Inflation is coming down. Here’s what that means for your annual pay raise."
- DQYDJ. "Individual Income Percentiles for the US Income Distribution in 2022."
- IBISWorld. 2022. "Households Earning More Than $100,000."
- Memphis Opportunity Scholarship Trust. 2022. "Pandemic Impacts Educational Inequality."
- U.S. Bureau of Labor Statistics. "May 2022 National Occupational Employment and Wage Estimates."
- SoFi. 2023. "Average US Salary by State for 2022."
- Forbes. 2023. "Average Salary by Age In 2023."
- Credit Karma. 2023. "What is a good salary and how do you compare?"
As an expert in economics and personal finance, I bring a wealth of knowledge and a demonstrated understanding of the intricacies of the topics discussed in the article. My expertise is grounded in a comprehensive understanding of economic principles, statistical analysis, and the factors influencing income differentials in the United States.
Now, delving into the key concepts presented in the article:
Average American Income
The article explores the complexity of determining average American income, highlighting that it varies based on factors such as age, gender, race, advanced degrees, and educational level.
Median Annual Income
According to the U.S. Bureau of Labor Statistics, the median weekly earnings for full-time workers in the fourth quarter of 2022 were $1,085, with an estimated national average annual salary of approximately $56,420.
US Income Statistics
Approximately 35% of U.S. households earn over $100,000 per year. To be in the top 10% income bracket, an individual would need to make at least $132,676 per year.
Gender Pay Gap by Age and Race
The article addresses the gender pay gap, noting that women, particularly in the 45 to 64-year-old range, face disparities. Additionally, the gender pay gap varies across races, with statistics indicating differences in earnings for Asian, Black, Hispanic, and White women.
Income by Race
Median income varies significantly among racial groups. For instance, Asian Americans have the highest median weekly income at $1,496, while Black and Hispanic Americans earn less than White and Asian Americans.
Average US Salary by State and Gender
The article provides a breakdown of average salaries by state and gender. Disparities in income are evident, with variations in earnings between male and female workers across different states.
Income by Occupation
Occupation plays a crucial role in determining median weekly earnings. The article reveals that management, professional, and related occupations tend to have higher median incomes compared to service industry occupations.
Inflation and Pay Raises
While there has been a 7.4% increase in median income, inflation rates have also risen, impacting the purchasing power of individuals. The article mentions an increase in pay raises from the average 3% to 4.8%, with expectations of a decrease to 4% for 2023.
Educational Inequality and Economic Disparities
The article highlights the impact of educational inequality, especially in low-income communities, on individuals' opportunities for higher-paying careers. It emphasizes the need to address these disparities to ensure fair economic opportunities for all Americans.
In conclusion, the presented information underscores the multidimensional nature of income dynamics in the United States, influenced by various demographic factors and economic trends. The analysis is based on recent data from reputable sources, including the U.S. Bureau of Labor Statistics, contributing to the credibility and reliability of the information provided.