Measure content performance. Develop and improve products. List of Partners vendors. We hear it all the time: The middle class is shrinking. Wages seem to have been stagnant for decades and American families are struggling with financial insecurity. However, what exactly is the middle class? Who is in it, and who is not?
Is it shrinking? What about you—which income class do you belong to? It turns out that these questions are difficult to answer. So we are going to start with some data. The majority of the U. However, the narrow majority found in still reflects a longer-term trend of a shrinking middle class compared to the s, s, s, and s. The middle class has been both decreasing in population share and seeing its cut of the income pie shrink.
The most interesting part of the Pew report, though, was its finding that the middle class is shrinking not only because more people are poor but also because more people are rich.
The shrinking middle class is less a decline in how well the population as a whole is doing. Also, there is more polarization of where growth is coming, at the extreme bottom and top of the economic spectrum. So, it is not just that people are falling out of the middle class into the lower class—they are also rising into the upper class, albeit in smaller numbers.
Also, note that the state of the U. On average, and according to reports by the U. Census Bureau, the American population has grown older. This aging makes a big difference to the median income because retirees typically live off savings and generate little income. Also, the country is significantly more diverse than it was in the s. Increases in the number of immigrants, for example, push down median incomes because immigrants, on average, make less money.
According to Pew, the data suggests that the middle class has stabilized in size. See the chart from the report below, for these later figures on how the class composition has changed since the s. However, the data also suggests that middle-class families continue to lose financial ground to upper-income families. If we take a longer view—say, from to —we see that only the income of the upper class has recovered from the previous two economic recessions.
Upper-class incomes were the only ones to rise over those 16 years. This segmented rise has contributed to an ongoing trend since the s of the divergence of the upper class from the middle and lower classes. In another piece, Pew reported that the wealth gaps in between upper-income families and middle- and lower-income families were at the highest levels ever recorded. As a growing body of research is demonstrating in ever greater detail, there is a substantial racial wealth gap in the United States.
Note that Pew researchers, like the U. Census Bureau, use the term Hispanic, not Latinx. Black households did see progress, Pew reports. The percentage of lower-income White households stayed roughly the same, with increases at the top and a shrinking middle income group.
And Asian households experienced increases at both the top and the bottom of the income scale. You can see this as you look below at the Note from the report. So, the obvious follow-up question is: Where does that leave me? Into which class do I fall? Income data released by the U. Pew defines the middle class as those earning from two-thirds to double the median household income. Easy, right? But for many people in the medical field, it takes several decades to recoup that investment.
Most U. And workers in some industries really struggle to make a livable wage. Here's how the top five occupations compare to the bottom five:. These lower-paying jobs don't require specialized education or training, so they're often a last-but-necessary resort among the non-college-educated who need work. Geography and earnings often go hand in hand, and in many cases, you'll earn a lot more in the same industry by moving from one state to another.
Here's what median income looks like on a state-by-state basis, broken down by male and female earnings:. If we count Washington, D. You'll often command a much higher salary in a major metro area than in a smaller city or suburb. Here are the top 15 metros where full-time employees ages 16 and over earn the highest annual median income:. It's not surprising to see tech hubs like San Jose and San Francisco on this list. What is a bit surprising is to see the New York City metro absent from this list.
Clearly, its large number of low-income earners cancels out its plethora of hotshot bankers and lawyers. You might not have expected Los Alamos to be the 1 highest-earning metro area in the country, either.
It also has the highest concentration of millionaires anywhere in the country. This is because of the Los Alamos National Laboratory, a high-profile lab best known for being the birthplace of the atomic bomb.
Many chemists, physicists, doctors, and other highly educated scientists work at LANL, and the average salary reflects that. Of course, it's easy to be tempted to move to one of these metros in the hopes of snagging a massive pay boost.
But remember, some of these cities are among the most expensive in the country to live in, so what you might gain in earnings, you'll likely end up spending on rent and other expenses. Now that you have a better sense of how much Americans earn on a national level and how those earnings break down by factors such as gender, race, age, occupation, and location, you can take a closer look at your circumstances and see if any changes are in order.
Of course, you can't change your race or age, but a couple of things you can change are the industry you choose to work in and the state or metro area you choose to call home. That said, you don't need to make such drastic changes to boost your earnings. If you're happy with your line of work and enjoy the area you live in, try learning new job skills to make yourself a more valuable employee.
Doing so could result in a nice raise. Similarly, research salary data for your industry and present it to your employer if you see that you're statistically underpaid given your position and line of work.
And finally, don't hesitate to dust off your resume and see what opportunities are out there. You may find that there's a nearby company that will pay you what you're worth if your current employer won't. And, of course, don't forget that it's not always how much money you make -- it's how you use it. The Ascent does not cover all offers on the market.
Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Knowing how much the average American makes can help you figure that out. Any amount above that should theoretically be considered a good salary; however, it is not as easy as that. What is considered a good salary in one city may not be so in another. Other factors that determine a good salary are the type of job, level of education, and sadly, even gender and race.
Source: U. Bureau of Labor Statistics. About In , around Source: IbisWorld , Statista. According to Pew Research, middle-class households are those with an annual income that is two-thirds to double the national median household income.
It is an increase of 6. Due to the fact that many households consist of only one person, the average household income is usually lower than the average family income. If you are keen on household income growth trends, since , US median household income has been rising. Source: US Census Bureau. If you compare the median male vs. Age is an essential variable while considering the average income in any country.
As experience is a crucial determinant of average salary, we decided to present numbers on that front. Based on the data from the US Bureau of Labor Statistics, 2nd Quarter , years is the highest income age group. Here the numbers are adjusted for monthly wages to give you a complete picture of the impacts of age on average monthly wages in the US.
There has been an increase in real median household income of 6. Additionally, median income increased for all US regions:.
Source : US Census Bureau. There is a big difference between the average and median wage data. The average numbers are higher because the distribution of workers by wage is highly skewed. In , there were 34 million people below the poverty line in the US. The poverty rate in the US decreased from Use precise geolocation data.
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