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Education, Occupation, Gender, Race, and Earnings

Written by Nickel - 9 Comments

Ever wonder where your earnings stack up vs. those of a typical American? Well, wonder no more… CNN/Money has compiled an interesting set of earnings statistics from BLS data.

For starters, the median weekly income for in the United States for “wage and salary workers” in 2012 was $775. That works out to $40,300/year. Is that more or less than you expected?

It seems a bit low to me though, after some digging, it appears that CNN is using the data for “16 years or older”, so perhaps we might expect it to be lower than if they had used a higher age cutoff.

It’s also worth noting that this number is for individuals. Median household earnings would be somewhat higher.

What follows are the median weekly earnings sliced and diced in a variety of ways.

Education and earnings

Breaking it down by education…

No high school diploma = $478/week ($24,856/year)
High school diploma = $647/week ($33,644/year)
Bachelor’s degree = $1,071/week ($55,692/year)
Advanced degree = $1,379/week ($71,708/year)

In other words, education really does pay — though it’s worth noting that you can’t really separate the effects of education per se from innate ability (i.e., those who seek out higher education may be more capable [on average] than those who don’t) based on these data.

Occupation and earnings

Breaking it down by industry…

Service = $485/week ($25,220/week)
Sales & office = $655/week ($34,060/year)
Construction = $740/week ($38,480/year)
Management & business = $1,108/week ($57,616/year)

Not terribly surprising, though I have to admit that I wouldn’t have expected construction to beat out sales & office positions. Then again, I’m not sure what all they lump into that “office” category.

Gender, race, and earnings

And finally, breaking it down by gender and race… For every dollar that a male earns, a female of the same race earns:

Asian = $0.72
White = $0.80
Hispanic = $0.87
Black = $0.87

This is a rather interesting way of looking at things, though it does mask a lot of things — not the least of which is overall differences between races.

In other words, the gender gap is largest for Asians and smallest for blacks and Hispanics. But that doesn’t tell us anything about how each group fares overall.

Since CNN didn’t report on this aspect, I dug into the BLS data myself — using the 16 years and over data for consistency.

Asian = $910/week ($47,320/year)
White = $802/week ($41,704/year)
Black (African American) = $615/week ($31,980/year)
Hispanic (Latino) = $571/week ($29,692/year)

So yes, the gender gap is the greatest for Asians, but they also come out on top in terms of overall earnings.

Adjusting the age range upward to exclude high school and college-aged students, the median weekly earnings for men 25 and older in the US is $926 ($48,152/year). For women, the number is $725 ($37,700).

It would be quite interesting to see the effects of each of these factors when controlling for the others as opposed to broad categorical comparisons. Unfortunately, I don’t have access to the raw data.

Source: CNN/Money, using data from BLS.gov

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Published on January 25th, 2013
Modified on February 4th, 2013 - 9 Comments
Filed under: Economy, Working

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

9 Responses to “Education, Occupation, Gender, Race, and Earnings”

1
nicoleandmaggie Says:
January 25th, 2013 at 10:10 am
You can get a % sample of the ACS from http://www.ipums.org.
2
Frank Says:
January 25th, 2013 at 10:24 am
I have a lot of questions on this because it’s rather different than IRS and Census data.

1) Is this Households or individuals?
2) Is this everyone or just working age?
3) Is this just the employed or does it include unemployed or disabled.

In short, if the average household income is around $49K – with the median being much lower, then these numbers might be overstating individual income. This might be a better reflection: http://en.wikipedia.org/wiki/P.....ted_States
3
Nickel Says:
January 25th, 2013 at 2:19 pm
Frank: Those things were mostly addressed in the text above. It’s individuals, not households. Also, for whatever reason, CNN chose to work with the data for 16+ instead of 25+ so there are a number of high school and college-aged people included. That said, I think that the BLS at least limits it to full time workers.
4
Christian L. Says:
January 25th, 2013 at 2:44 pm
I’m curious what separates “sales & office” and “management & business.” Is there a breakdown of that somewhere?

-Christian L. @ Smart Military Money
5
WC Says:
January 25th, 2013 at 2:55 pm
All these numbers seem really high to me. I know that these are the “average” totals, but is this before taxes and other figures are taken out?
6
jim Says:
January 25th, 2013 at 3:24 pm
Frank, THe IRS data I usually see is usually for tax filers and excludes people who don’t file and often reports adjusted gross income.

WC, the numbers here would be before taxes or deductions so its gross income and not the ‘take home’.
7
Christian L. Says:
January 25th, 2013 at 5:02 pm
WC,
These are all median figures, meaning they fall right in the middle of all the earnings figures. So on the spectrum of lowest to highest, these fall smack dab in the middle.

The mean earnings would be an average of all the figures in the data. Perhaps that’s why they seem high to you?

-Christian L. @ Smart Military Money
8
WC Says:
January 25th, 2013 at 5:11 pm
Christian,

Thanks for your response, but I’m aware of the meaning of “median” and understand that these fall “in the middle.” I was simply responding to the author’s question in the second paragraph, where he asks “is that more or less than you expected?” So, per my response above, I felt it was “more.”

I appreciate your explanation, but my understanding of the word “median” or “average” wasn’t in question. I simply felt the final figures were high.

I hope that doesn’t come off as snarky, but just wanted to clarify. Thanks again.
9
Frank Says:
January 25th, 2013 at 6:58 pm
Okay, if these are median and at household, then it’s probably about where I would expect it to be considering there are far more households headed by those without bacholor and advanced degrees than those with 4+ year degrees. The median household around 42 grand or so.

The Tax Policy Center does an excellent job of creating a cash income for households and breaking that model down by percentiles. http://taxpolicycenter.org/num.....DocID=2970

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