Economists like to look at changes in the gross domestic product (GDP )when assessing the health of the economy. But for a real-life glimpse of how well individual Americans are doing, you need to know what their income is. We can find out what the U.S. citizen's average income is with the U.S. Census Bureau.
What Is Median Income?
Median income means that half of the people earn less than that figure and half earn more. It's actually a more accurate assessment of how well Americans are doing. With average income, a small number of people with very high salaries (America's growing billionaire class, for example) could increase the figures, so they look better than they really are.
Actually, the latest figures are better than they've been for years. Based on recent U.S. Census Bureau figures, there’s room for optimism. The median household income in 2017 was $61,372, which is a 1.8% increase from 2016.
Why Median Household Income Is Up
It’s also the first annual increase since 2007, after which the Great Recession of 2008 left millions of Americans without work. Experts see this as evidence that the economic growth the country has seen over the past several years is finally putting upward pressure on wages. What’s more, there are clues that income growth is being enjoyed not just by the upper and middle classes but also by low-wage earners. Of particular note is the fact that the poverty rate also fell.
However, as heartening as those trends are, we’re still struggling to get back to pre-recession wage levels. If you account for inflation, the typical American pay is still 1.6% lower than it was in 2007.
Regional Disparities in Average Income
While it can be informative to look at nationwide income figures, taking a closer look at the data yields some interesting discoveries. Among them is a deep chasm between affluent and poor parts of the country.
The Northeast is the most affluent part of the U.S. It’s also home to the wealthiest state when it comes to median income, Delaware. The median household in Delaware is $83,382, more than $22,000 above the national median income.
Americans in the West received nearly as much, with earnings of $69,000 per year. Residents of oil-rich Alaska fared particularly well, with a median household income of $72,231. Those in the Midwest were slightly behind, at $63,000 per year. Minnesotans were the highest wage earners in that part of the country, at $71,920.
On the bottom end of the spectrum is the South, where the median household income is $51,174 a year. The region is home to three of the five poorest states, including Louisiana, Mississippi, and Arkansas. The distinction of having the lowest income goes to Mississippi, where the median household made just $43,000.
Gender and Racial Pay Gaps
The figures show a continued gender gap in terms of pay, with women earning substantially less than men. Females who worked full time earned a median income of $40,742, according to the census data. That’s roughly 80% of what their male counterparts made: $51,212.
There’s also a significant income divide among racial groups. The median yearly income for white households was $62,950. However, Hispanic families took home $45,148 in pay, while black earners made even less, at just $36,898. The highest earners of all were Americans of Asian descent, at $77,166 per year.
The Bottom Line
Census figures across the board show that wages are on the rise—a sign that the economic recovery is starting to benefit Middle America. While that’s good news for workers in the U.S., it’s clear that large gulfs continue to exist along gender and racial lines.