The average household income in the U.S. varies greatly, yet as of 2021, slightly more than half of households had an annual income of 75,000 U.S. dollars or less. However, more than 17.4 percent of American households reported an annual income below the U.S. poverty threshold, which as of 2021 was considered 26,500 U.S. dollars for a family of four. In 2021, around 77,000 workers in the education and health services industry were making an hourly wage at or below minimum wage. with the vast majority were among the leisure and hospitality industry. In 2022, many of the highest paying jobs in the U.S. were those in the medical field, with the highest earning profession being anesthesiology, with an annual average salary of 421,330 U.S. dollars.
Cost of LivingBetween March 2021 and March 2023, the monthly inflation rate in the U.S. consistently surpassed the country’s wage growth. In June 2022, monthly inflation peaked at 9.1 percent, a 40 year high for the U.S. Although wages have seen an increase, as long as it remains below the rate of inflation, it is not enough to account for the rising costs, and will continue to weaken the purchasing power of Americans. As inflation rose, the impact was felt throughout the country, with more than one third of U.S. consumers reporting having struggling to make ends meet at the end of 2022. As the cost of living crisis continued to sweep across U.S. states, many found it increasingly difficult to sustain themselves, as well as afford housing.
As of 2022, the hourly wages required to afford a two-bedroom apartment was considerably more than the average minimum wage of every U.S. state, spanning from 14.89 U.S. dollars in Arkansas, up to 40.63 U.S. dollars in Hawaii. In the United States, the monthly average rent in 2021 was estimated to be 1,800 U.S. dollars, three times greater than what it was in 2000. The trouble to afford rent is just one part of the greater cost of living crisis. To many Americans, the reality of being able to live in a major U.S. city is dwindling. As of 2022, renters in New York City, would have to earn at least 105,000 U.S. dollars annually to maintain a comfortable quality of life. For homeowners, this number was considerably higher, at around 151,000 U.S. dollars. San Jose, California had the highest annual income requirement for homeowners at 230,696 U.S. dollars in 2022.
Minimum WageMinimum wage has become a politically contested issue in the United States, with many imploring politicians and employers to raise it, arguing that, as it stands, it is insufficient to support oneself. As of 2022, the federal minimum wage in the United States is 7.25 U.S. dollars, remaining unchanged since 2009. When adjusted for inflation, it is approximately 40 percent lower than what it was in 1970. To put it in global terms, the United States ranks seventeenth when compared to the national minimum wage of 38 OECD countries. It is estimated that, if minimum wage grew proportionally to productivity, it would be 22.88 U.S. dollars. Nonetheless, there were still 910,000 workers paid hourly rates below minimum wage in 2021.
Although the federal minimum wage in the United States remained at 7.25 in 2023, many states have mandated higher rates, particularly states with higher costs of living. As of 2023, the District of Columbia had the highest minimum wage in the country, at 16.50 U.S. dollars per hour. Despite many states implementing higher minimum wages, 13 states remain situated at the federal minimum. Additionally, Georgia and Wyoming had the lowest minimum wages that year, with both states’ minimum wages at 5.15 U.S. dollars per hour. Such exceptions to the federal minimum wage can be made for small businesses, leading a number of states to have two minimum wage rates.
Wage GapsThere are significant disparities in earnings between different genders and ethnic groups in the U.S. workforce. The gender pay gap refers to the disparity between that which men and women in the workforce earn. Despite more efforts being made to account for this gap, women still earn less than men, in every U.S. state. In 2021, women in the U.S. made about 83.1 percent of that which male employees received working the same job. The finance and insurance industry had the most considerable gender gap in 2021, with a rate of around 65 percent. There is no industry, including those female dominated, in which women make more than men. Despite outnumbering male registered nurses, female registered nurses, receive an average of 1,274 U.S. dollars per week, whereas male nurses receive around 1,437.
There are also considerable disparities among both racial and ethnic groups regarding full-time wages and salaries. In 2021, the median household income for Asian households was 101,418 U.S. dollars, whereas with Black households, the median income was 45,208 U.S. dollars. Weekly income in 2021 was highest among American males between 45 and 54 years old, with an average of 1,295 U.S. dollars per week. In 2022, the highest weekly earnings in the U.S. were among Asian men who earned an average of 1,453 U.S. dollars per week, whereas Black or African American men made an average of 921 U.S. dollars per week. Gender and racial disparities are not mutually exclusive and often intersect, resulting in compounded disparities among women of color. In 2022, Black or African American women and Hispanic or Latino women had the lowest median weekly earnings, with 835 U.S. dollars and 761 U.S. dollars respectively.