2023 U.S Average Income Statistics: By State, Demographics and Occupation
The average American in a post-pandemic world faces a lot more financial hurdles than he did in the years prior. These hurdles are not the same for everyone as the disparity in wealth differs between different demographics.
With world events continuously affecting the economy, the American people find their income reflecting the situation. Below we will take a look at the latest data on the average income for Americans.
Key Takeaways
- Real wages in 2022 reach up to $67,521 for the average American.
- The median income in the U.S. for individuals is $70,824.
- The household income for the average American family is $87,864.
- U.S. citizens earn some of the highest salaries in the world.
- Connecticut is the state with the highest income range for a middle-class family.
- Asian Americans are the demographic group with the highest income.
- Doctors have the highest hourly wage, earning $89 per hour.
Topics Covered
01
Average Income
by State
02
Average Income
by Demographic
03
Average Income
by Occupation
04
Standard of
Living
General Statistics
Estimates show that the real average wage for 2022 amounts to $67,521, while the average income for households reaches $87,864.
In the last few years, the average American income for individuals and families has continued to rise. During the 2018 - 2020 period, the average income increased by $5,717—a 4.68% increase in the average annual income or a 7.27% increase in total.
Statistics from the U.S. Bureau of Labor Statistics (BLS) show that by the first quarter of 2022, the median income per week for a full-time American worker was $1,030. This number represents a 4.8% year-over-year increase or a 2.2% increase from the preceding quarter. This income differs between genders, with men having a weekly income of $1,118 compared to women whose weekly income averages at $937.
In the case of a 40-hour work week, the hourly wage for the average American working over the first quarter of 2022 reached about $25.75.
Data from the World Bank places U.S. citizens in the high-income category. Some other countries, besides the U.S., with a majority of high-income individuals are Canada, Australia, Japan, South Korea, and most EU countries. With Americans having some of the highest salaries, it’s no wonder that their purchasing power is just behind China.
(The World Bank)
Some of the nations that offer the highest salaries include Denmark, Australia, Sweden, Norway, Luxembourg, and the United States.
With inflation in mind, the real wage for the average American has only increased by $18.82 since 1964. The average hourly wage for Americans in 1964 was about $1.15, which would translate into $10.99 by today’s standards. According to the BLS data for 2020, the average hourly wage for Americans is $29.81.
According to the U.S. Census Bureau, the average household income in 2020 was $67,521, which is less than the average for 2019 ($69,560). However, despite recent economic setbacks, the average wage is still higher than it was after the economic crisis of 2008, which was about $60,200.
Average Income by State
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The difference between the average income in different states across America also corresponds to the difference in cost of living. While someone in New York can have a higher salary than someone living in Missouri, the cost of living in New York is much higher.
While a salary of $6,000 would be considered good in most U.S. cities, in places like New York, Los Angeles, Chicago or San Diego the sum necessary for a salary to be considered good is higher. In New York for example, an income of $8,000 to $10,000 per month is generally considered a good salary. With 30% of families in New York having a six-figure income, the average annual salary is $81,000.
New York stands out as one of the most expensive cities in the U.S., with a cost of living that's 129% higher than the national average. The average rent in Manhattan is $3,475 for an apartment, while a one-bedroom apartment would cost about $3,100. This price, however, has recently reached as high as $5,000.
In Alabama, the income for lower-middle-class families can start at $38,582, while for those categorized as upper middle class, this income can go up to $161,524.
The number of those living in poverty varies from state to state. In states like New Mexico, West Virginia, and Mississippi, the adult poverty rate is over 18%.
The approximate highest income range for middle-class households by state goes as follows: 1. Connecticut ($137,002); 2. New Jersey ($134,704); 3. Massachusetts ($133,746); 4. Maryland ($130,482); 5. New York ($119,540); 6. California ($119,126); 7. Virginia ($118,940); 8. New Hampshire ($117,422); 9. Hawaii ($117,075); 10. Washington ($114,940).
Average Income by Demographics
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One of the biggest factors that impact income for Americans worldwide is gender. The gender pay gap is still prominent, with men continuing to earn more than women, even in the same fields and occupations. The other factors that contribute to the differences between incomes are race, age, and location.
The income disparity between men and women reflects in the annual earnings, which are estimated to be $52,004 for men and $42,238 for women. These measurements take into consideration women and men with the same jobs, in the same positions.
The demographic with the most significant income disparity is households with a female as the sole breadwinner. This leads to a further complication of data, not just because women earn less but also because with only one provider, there’s less income to distribute in a household.
In work sectors, when calculating the disparity of income between genders, even in industries with equal qualifications, women still make just about 83% of what men do. This is still a huge gap despite the fact that it’s an improvement from previous years. This gap tends to decrease among the younger generations.
Self-employed individuals are particularly prone to experiencing the largest pay gap. Self-employed women earn about $36,995 per year on average compared to the average self-employed man, who makes $61,091 per year.
Back in 1979, women earned just 62% of the weekly earnings of men. Today, this gap has been reduced by 20 percentage points.
The category with the highest income earned is Asian Americans, whose income reaches $87,243 annually. The second highest income earners are White Americans, who earn about $20,000 less than Asian Americans. The reasons for this are the fact that Asian Americans are the group with a very fast population growth rate, the fastest in the country. And not only that, they are also the group with the highest level of education.
Black Americans are the group with the lowest income, earning only $41,511 per year. This means that Black Americans earn less than half of what Asian Americans earn and roughly $25,000 less than White Americans.
In terms of age groups, the highest earnings of about $84,464 belong to those between 45 to 54 years. Those between the ages of 35 to 44 are in second place, typically earning about $80,743. This reflects the fact that during this age, most of the working class are at the highest points in their careers.
Women who work in the private sector earn the lowest median salary, which is $30,040. They make $7,000 less than women in other sectors and about $11,000 less than men in the private sector.
The age groups making the lowest income are those between 15 to 24, who earn a median income of $43,531. Those over 65 make the second-lowest income, with a median of $43,696. This is due to the fact that people in these demographics are either just starting their careers or are already retired.
The highest median income in any sector belongs to men employed by the federal government at $68,464. Women in this sector, however, make $59,581 on average.
Average Income by Occupation
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The lowest paying jobs in the U.S. continue to be those in the food and service industry. The average hourly wage for workers in these industries continues to be roughly $10 per hour or an annual wage of $22,140. Due to these numbers, the minimum wage debate has been centered around helping workers in these industries specifically.
In terms of jobs that have the highest salaries per hour, the BLS states that the medical sector dominates, being in the top positions. Doctors make roughly $89 per hour; however, this also depends on the field that doctors specialize in. Dentists, for example, make about $77 per hour, while anesthesiologists make $113.
Anesthesiologists are also within the category that makes the highest monthly income in the United States. As far as their annual salary, it can reach up to $331,190.
Average Income, Standard of Living and Poverty
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In the past few years, there has been a steady increase in income for the average American despite lingering economic setbacks spearheaded by the lingering COVID-19 pandemic and the ramifications of war between Russia and Ukraine. While many people have different ideas about what ‘wealthy’ is, there are some measures to go by.
What is considered a good salary for the average American? A yearly salary of anything between $70,000 and $78,000 (before taxes), which translates to $5,800 to $6,500 per month, is widely considered a good income.
A family needs around $100,000 in order to have a good standard of living. An annual income of $100,000 is enough to support a family and still provide for other luxuries. This is considered a good salary for families all over the country.
The top 10% of earners in the U.S. make over $169,070 annually, and the bottom 10% of earners make less than $56,880 annually.
The percentage of families who earned more than $100,000 in 2022 is around 34.4%.
The pandemic had a major impact on income and in the increase of poverty all over the world, the U.S. included. By the end of 2020, 11.4% of Americans were considered poor, which is one percentage point higher than 2019.
In 2010, after the economic crisis, the poverty rate reached 15.1%, but it steadily decreased till 2019, when it reached 10.5%. Undoubtedly, the increase in poverty in the following years is a direct result of the COVID-19 pandemic and its economic effect on the global market.
Currently, there are 37.2 million Americans living in poverty. In California, there are 6.3 million people in poverty; the state alone is responsible for 16.9% of the overall statistics.
(Public Policy Institute of California)
In 2020, 4.7% of American households lived in poverty, which is 0.7% more than in 2019. This means that there are 7.3 million families living in poverty across the United States.
Most Americans believe that in order to be considered wealthy in the U.S., one needs a net worth of about $2.3 million. The annual wage that would qualify someone as wealthy is around $300,000.
Projections for the Future
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With all the data in mind, what does the future have in store for the American people and their income?
After the pandemic and ongoing wars, the global economy has taken a tremendous hit, with more people now than ever before losing their jobs and financial security. However, things are looking up for most Americans as the economy has started to stabilize and the majority of workers are joining the workforce once again.
While inflation continues to be a problem, employment rates have finally started to pick up, which is a good indicator of what’s to come.