How Much Does the Average American Make?

Mary Gormandy White
earnings statement

According to the Social Security Administration (SSA), the 2013 National Average Wage Index (AWI) is $44,888.16 per year. This is an overall arithmetic average, including workers from all geographic areas and demographic classifications. This index is used for the purpose of determining Social Security benefits and is based on net compensation, which are earnings subject to federal income tax. This number provides general insight into what American workers earn, but doesn't tell the whole story.

Impact of Geography on Earnings

Earnings by State

In 2013, the United States Census Bureau reported that the overall median household income for the U.S. was $51,939. However, earnings can vary significantly by region, as indicated by the table below, which is also based on Census Bureau statistics and includes the states with the lowest and highest median household incomes. See AdvisorPerspectives.com for a list of all U.S. states.

State Median Household Income Status
Louisiana $39,622 Lowest in country
Arkansas $39,919 Second lowest in country
New Hampshire $71,322 Highest in country
Virginia $67,620 Second highest in country

Note that median is not an arithmetic average; median is the physical midpoint of the data, representing the point at which there are an equal number of occurrences above and below.

Earnings by Metropolitan Area

State is not the only geographic factor that impacts earnings - size of the metropolitan area has an impact as well. Out of the 25 metropolitan areas with the largest populations, those with the highest median household income (per 2013 Census Bureau data) are:

  • The Washington, DC metropolitan area - $90,149
  • San Francisco metropolitan area - $79,624
  • Boston metropolitan area - $72,907

Note that the number for each of these areas is well above the state with the overall highest median earnings, as well as the overall national number, suggesting that people who live in large cities do earn more than those who live in smaller areas.

Earnings by County

Earnings don't just vary by state - county is another important factor to consider. The Census Bureau collects information on all 3,142 U.S. counties through its Small Area Income and Poverty Estimates (SAIPE) program. The data provided here are based on 2013 statistics.

Counties With the Highest Income

The highest annual median income range for small counties is $79,637 to $117,680, which is significantly above the overall national average. Many of these areas are 'bedroom communities' for large metropolitan areas, with residents commuting from rural home settings to big-city jobs.

  • 57 counties across the country are in this range.
  • 33 of them (57%) are located in Maryland and Virginia and the Northeast.
  • 31 of them (54%) are located in the corridor that includes Boston, New York, Philadelphia, Baltimore and Washington, D.C.

Counties With the Lowest Income

The lowest annual median income range for $21,572 to $37,091, which is significantly below both overall national statistics and the lowest overall state-specific numbers. These counties tend to be rural areas. Depending on family size, this income range may fall below the 2014 poverty guidelines.

  • 80% of the counties that fall within the lowest income range are in the South.
  • Overall, 1,075 counties had poverty rates in the range of 25.9% and 63%.
    • Three-quarters of these counties are in the South, with the remaining quarter located across the country.
    • In six southern states (Alabama, Arkansas, Georgia, Louisiana, Mississippi and South Carolina), 65 percent or more counties fall within this poverty range.

Impact of Education Level on Earnings

The level of education a person has completed can have a significant impact on earnings. Bureau of Labor Statistics (BLS) data from 2013 reveal median earnings for a variety of education levels:

Education Level Completed Median Weekly Earnings Median Annual Earnings
Doctoral degree $1,623 $84,396
Professional degree $1,714 $89,128
Master's degree $1,329 $69,108
Bachelor's degree $1,108 $57,616
Associate degree $777 $40,404
Some college, without an earned degree $727 $37,804
High school diploma $651 $33,852
Less than a high school diploma $472 $24,544

Earnings by Gender

Income data also show differences by gender. Annual household data averages compiled by BLS for 2013 indicate that overall median weekly earnings are $776, which translates to annual median compensation of $40,352. When broken down by sex, the data are:

Sex Median Weekly Earnings Median Annual Earnings
Male $860 $44,730
Female $706 $36,712

Earnings by Race/Ethnicity

Income differences also show up along racial and ethnic lines, as indicated in 2013 data compiled by Statistia.

Race/Ethnicity Median Household Income
Asian $67,065
Caucasian $58,270
Hispanic $40,963
Black $34,598

Complicated Topic

Looking at average earnings is a complicated topic, with statistics gathered by multiple agencies and data analyzed multiple ways. Reviewing the various ways average and median earnings are compiled can give you a good, general idea of earning expectations in certain geographic locations and based on other key indicators.

If you are trying to get a sense of how much you might expect to earn in a particular profession, the Occupational Outlook Handbook, which is a BLS publication, is a good resource. You can get earnings estimates, education requirements, expectations for job growth or decline and more for hundreds of specific occupations.

How Much Does the Average American Make?