The average salary in the US is one of those weird numbers that everyone talks about, but no one really understands. Politicians like to throw it around to make points. Your uncle mentions it at Thanksgiving to complain about taxes. Your college roommate uses it to calculate how long it will take to pay off student loans.
But here’s the thing – the average salary doesn’t actually tell you much about what real people earn. Just like how the “average person” has one testicle and one boob (I hope), the average salary muddles together a huge range of incomes that have little to do with your own situation.
So, what is the average salary in the US? And more importantly, who gives a crap?
Let’s break this down.
According to the Bureau of Labor Statistics, the median weekly income for full-time workers in Q3 2022 was $1,115 per week. That comes out to around $58,000 per year.
This means that if you lined up everyone’s salaries from lowest to highest, the person smack dab in the middle would make $58k.
This means that if you lined up everyone’s salaries from lowest to highest, the person smack dab in the middle would make $58k.Here’s the problem – no one actually makes the median salary. The $58k number is just a mathematical abstraction that mashes together all salaries in the country. It tells you nothing about what actual people earn.
Imagine gathering a random group of 10 people. Five of them make $20k per year. Four make $100k. And Mark Zuckerberg makes $25 billion.
The median income of this group is $100k because that’s the middle number. But does this represent what anyone actually makes? Nope. The median is totally skewed by the extremes on either end.
The same thing happens when calculating the median salary for the entire US workforce. The super-rich drags the number upwards, while lower-income workers pull it back down. The result is a fictional number that doesn’t reflect any real person’s income.
So, that $58k figure politicians love to cite? It’s bogus. It’s time to stop obsessing over a meaningless statistic.
Here’s the reality – salaries vary hugely depending on where you live and work.
For example, the median income in Mississippi is $45,000, while in Massachusetts, it’s $81,000. That’s a $36,000 difference!
Education matters, too. People with advanced degrees earn significantly more than high school grads. The median salary for someone with a professional degree is $122,000 per year versus $45,000 for a high school diploma.
Experience plays a role as well. Median earnings peak between ages 45-54 at around $66,000, compared to $30,000 for ages 20-24.
And your job makes a massive impact. Anesthesiologists average $271,000, while fast food workers earn $22,000. That’s more than a 10x difference just based on occupation.
The bottom line is that there are too many factors affecting income to boil it down to one number.
We’ve established the average salary figure is bogus. But why does it even matter?
As humans, we have an obsession with comparing ourselves to others. Researchers have found social comparison is a key driver of our happiness. When we see others doing better than us, we feel worse.
But constantly comparing yourself to abstract averages like the median salary is a recipe for misery. There will always be people making more than you and people making less. You can’t win.
A better approach is to ignore what others make and instead focus on achieving the lifestyle YOU want.
For example, I know a guy making $35k per year as a part-time surf instructor. He works 3 days per week, surfs every morning, and lives in a van by the beach. To me, it sounds like he’s killing it!
Yet, according to the stats, he makes way below average. But so what? He’s happy and living the dream. Your ideal lifestyle may look totally different, and that’s okay.
The goal isn’t to earn more than others. It’s to have enough money to create the life you want. External benchmarks like the median salary won’t get you there.
Here’s the million-dollar question – how much salary do you really need to be happy?
Unfortunately, there’s no one-size-fits-all answer. The ideal income depends entirely on your lifestyle and values.
For example, if you’re a single minimalist who enjoys hiking and reading library books, you can get by quite comfortably on $30-40k in low-cost areas.
On the other hand, if you’re raising kids in New York City and love expensive hobbies like horseback riding and collecting rare wines, you may need upwards of $300-400k to afford your lifestyle.
The actual amount you need comes down to your unique preferences and spending habits.
To figure it out, list everything you value in life. Then, put a price tag on each item. How much is your ideal home? What activities do you enjoy, and how much do they cost? How much will you need for retirement someday?
Add it all up to estimate your personal target income number. This is the salary you should aim for, not some fictional average.
I’ll wrap up with one final thought…
Yes, higher levels of education typically lead to higher earnings. People with professional degrees earn a median of $122,000 vs. $45,000 for those with a high school diploma.
Make a list of everything you value and put a price tag on it. Add up costs like your ideal home, activities, retirement savings, etc., to estimate the income you need for the lifestyle you want, regardless of national averages.
The median salary in the US is around $58,000 per year, according to the Bureau of Labor Statistics. However, this number doesn’t actually reflect what real people earn since it mashes together salaries across the entire workforce.
Obsessing over the average salary is an exercise in futility. This single number can’t possibly represent the vast range of real-world incomes that exist across the diverse US workforce. Unique lifestyle choices and values drive each person’s ideal income. Rather than endlessly comparing yourself to national statistics, take time to reflect on what you truly want from both your career and life in general. Then, make a plan to get there based on your own definitions of success. With some self-awareness and strategic effort, you can achieve the salary and lifestyle that allows you to thrive.
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This has truly been the first time we worked with someone outside of our business that quickly grasped our vision, and that I could completely forget about and would still deliver above expectations.
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Disclaimer
*The information this blog provides is for general informational purposes only and is not intended as financial or professional advice. The information may not reflect current developments and may be changed or updated without notice. Any opinions expressed on this blog are the author’s own and do not necessarily reflect the views of the author’s employer or any other organization. You should not act or rely on any information contained in this blog without first seeking the advice of a professional. No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained in this blog. The author and affiliated parties assume no liability for any errors or omissions.
