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No for the numbers to be correct the top 10 Americans would need to have average earnings of $316.6 billion each. Elon musk the current richest person has a net worth of $208.4 billion which is not his earnings in a year
This assumes that all 333.3 million Americans have an income. A quick Google search said that in 2022, 239.1 million Americans actually had an income over $1, which would mean the average earning of the top 10 would have to be $227.1 billion for the first average to check out. Still way more than even the richest average incomes though.
I did find this list of statistics:
2021, Individual tax returns excluding dependents:
* Top 0.001% (Returns ranked number 1 down to 1,536)
* 1536 out of 153,589,907 tax returns
* Adjusted gross income floor on percentiles: **$118,014,696** *[These returns had this number or higher as the income]*
* Adjusted gross **income share (percentage): 3.01% of all returns**
* Top 1.00% (Returns ranked number 1 down to 1,535,899)
* 1,535,899 out of 153,589,907 tax returns
* Adjusted gross income floor on percentiles: **$682,577** *[These returns had this number or higher as the income]*
* Adjusted gross **income share (percentage): 26.303% of all returns**
https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile#earlyRelease
Among other tables at the above link...
>Table 4.1. All Individual Returns Excluding Dependents: Number of Returns, Shares of Adjusted Gross Income (AGI) and Total Income Tax, AGI Floor on Percentiles in Current and Constant Dollars, and Average Tax Rates, by Selected Descending Cumulative Percentiles of Returns Based on Income Size Using the Definition of AGI for Each Year
No, because the average net worth in the US is like $1m. All US owned assets is like $250 trillion so if you remove a few billionaires, the average barely moves.
It's just made up nonsense by people who don't understand finance or math. What's funny is they don't even understand the income or wealth distribution in the US, the size of and wealth of the US middle class, and instead of learning even the very basics, they make memes and spread them.
No, it doesn't.
The US working population is around 161 million.
Since 10 people raised the average income from $65,000 to $74,500, that means that these 10 averaged an annual income of
(($74,500 * 161,000,010) - ($65,000 * 161,000,000)) / 10
= $152,950,074,500
=~ $153 billion
That's more than half of the richest person's net worth. And there are only 3 people in the US who even have that much money.
Not a single person has made that much last year. Or any year.
Edit: There are people arguing by using the median income in other comments. That doesn't help too much when we don't know where the data in the OP comes form.
To reply to your edit: I think the numbers cited in the original post are median numbers. The census bureau listed $74,580 as the median household income for 2022. Which makes it even more ridiculous to say that taking 10 people off the list would change the total at all.
https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
Yep. If I have 1000 people, and 999 of them have 1 dollar, and 1 has 999 dollars, the mean (average) is ~~$500~~ $1.99, but the median is $1.
EDIT: Messed up the math, but my point is correct - medians dilute the effect of statistical outliers.
Your math is waaaaaaay off.
The mean in your situation is:
(999 people * $1 per person) + (1 person * $999 per person) = $1,998 per 1,000 people
$1,998 / 1,000 people = $1.998 ~= $2.00 per person
Or if your 999 people have a _total_ of $1 among them, then mean is:
$1 per 999 people + $999 per 1 person = $1,000 per 1,000 people
$1,000 / 1,000 people = $1.00 per person
Whichever way you read it, the mean is two orders of magnitude shy of $500.
>Mean is ~~$500~~ $1.99
>EDIT: Messed up the math, my point is correct
I mean, your point of how significantly the mean is thrown off is completely undermined.
Your comment is better as a case example of how these stupid posts reach their conclusions via really bad math.
I typed it out quick on my phone, and meant to put a much larger number for the rich person (which still wouldn't impact the median.) But I'm not going to go back now and cheese edit it to try to make it like I didn't make a mistake. :-/
It's not completely undermined, the point still stands. The mean is still double what 99.9% of the population earns. If you remove 1 outlier the mean becomes exactly what everyone else earns, that's a big difference from the perspective of the $1 people.
Yep.
The mean individual income in the US is $58,430.
The median individual income in the US is $40,480.
https://en.m.wikipedia.org/wiki/Personal_income_in_the_United_States#:~:text=The%202023%20Current%20Population%20Survey,the%20mean%20income%20was%20%2459%2C430.
Those also count everyone over the age of 15 ~~whether or not they're working (or want to be)~~ who made $1 or more. Looking at full time workers (35+ hours per week) and median personal income jumps to $55k
Yes, but that’s how we know this post is misinformation and/or rage bait. The median income in the US for individuals is nearly $50k and about $70k for households.
So there’s no way the average would be moved significantly below that median mark. So since we know that the average almost certainly should be *above* $50k *at minimum*, we know this post is bs.
In context, no. The guy was implying the numbers of the wealthiest affect the median. They do not. Their existence wasn't the question. Given they are wealthy (and exist!), they don't impact the number
Instead of using medians which aren't a valid average measure, since they only consider some of the data in the sample a better solution would be to just simply use the geometric mean. You can simply ignore every person who has an income of 0 and that would make it, so that the mean wouldn't be impacted significantly even if there were some rich people, but it would also use all the data from the sample unlike the median.
> medians aren’t impacted (significantly) by a few rich people.
Out of hundreds of millions? Yeah, the median probably wouldn't even move a dollar if you took out the top 1000 earners.
Imagine it the other way around. If you removed the bottom 1000 lowest earners would you expect the median to rise noticeably?
If the number of earners in a bracket drops logarithmically with respect to the amount of income, then dropping the top earners would actually have less impact than dropping the bottom earners, but not by much.
These. That's why it's stupid looking at average income/wealth for the US to get an idea of how the average American feels or lives? America is a place where the rewards are skewed ~~incrementally~~ exponentially to the top winners from companies (NVDA vs INTC), CEOs vs interns, Top Uni professors to kindergarten teachers, Lebron James to Lebron James Jr, etcetcetc.
Will just add that median household income =/= median personal income
Real Median Household Income in the United States is at $74580 for 2022. https://fred.stlouisfed.org/series/MEHOINUSA672N
Real Median Personal Income in the United States $40480 in 2022. https://fred.stlouisfed.org/series/MEPAINUSA672N
More important than just looking at median individual income. It is also important to look at that income relative to a person's local, age, life-style, family status, and factors.
An 18-22yr old HS grad earning $40K working a job where they are also getting trades work training, living at home with parents, no student debt, and living in a low cost of living place like sub-urban TX might be feeling well.
A 33yr old parent earning $40k as a fast food worker in the bay area, with car/rent/studentloan payments, and a kid to rise might feel like it's fucking impossible.
The median being $40k totally debunks the claim in the OP. You can't bring the mean below the median by removing 0.0001% of the data, it just doesn't work.
Median household income USED to only consider 1 person working per household. Now that number is THREE. Sooo don't assume that 74k is one persons salary.
The average net worth of the top 10 richest Americans is about 133billion. The average net worth of the top 10 richest people in the world is about 155billion, or just about exactly what they would need for the math to work out.
My theory is for some reason they,
* took American median household income, instead of the mean individual income.
* Then they took the top 10 richest people in the world instead of the top 10 richest Americans
* Then they used net worth instead of annual income.
The person who made this meme has absolutely no idea how finances or statistics work.
>The person who made this meme has absolutely no idea how finances or statistics work.
Fortunately for that person, their audience is probably even less financially literate. Like reddit.
[https://www.reddit.com/r/antiwork/comments/1demya5/i\_was\_thinking\_about\_how\_hard\_it\_is\_to\_just\_break/](https://www.reddit.com/r/antiwork/comments/1demya5/i_was_thinking_about_how_hard_it_is_to_just_break/)
This was the post, though it's been removed now, I was in it talking last night.
There were plenty of people calling it BS, but lots more discussing it as fact.
subs like Antiwork are full of things like this, though they are usually technically right, but not always close to right like this.
People WANT it to be right so they can show how bad things are, which is silly because you can use real and appropriate stats to show how bad things are. You don't need to make up stats or mislead people.
Because average income generally only looks at people who have income. You could argue that this should also include pensioners, but that's another discussion.
This way also gives the creators the benefit of the doubt because using the entire population would make the result even more outlandish. And since it's still clearly wrong with said benefit, we can be sure that it's wrong, no matter the interpretation.
Should you divide the average dick length by 2 since only half of people have one?
There's a difference between having a length of 0 and not having one at all
1) Because that's how these stats are derived
2) Because it gives the benefit of the doubt to the statement being tested. If you included the entire population, the math would work out even less.
If you count estates as a single person it adds up. The Walton Estate made 310 billion last year in income...now that is also net income, but so is the rest of the numbers.
74k is HOUSEHOLD income. The average household has 3 earners in it now compared to 1 when the system was first created. if you are counting the estate as the household income then the math works out.
Oh you're right, 74k isn't average income at all. 74k is *median* household income. Which means it cannot possibly be true that taking out the top 1000 people drops it to $35,000.
I have someone on my Facebook feed that shared this meme from someone using this link as citation for said meme.
[Citation provided by OP](https://patrioticmillionaires.org/2022/02/02/statistics-matter-why-averages-arent-useful-when-talking-about-the-american-economy/?fbclid=IwZXh0bgNhZW0CMTEAAR3zAGR_rX_bLPj0PNShxskeEq1oOuHpynR2tri6INnYnCceUdgunGohTZE_aem_AdkF4KFf7PefleYH2lrugX1nJAEEeSgA8OlQQ6RSdlLDiPDvDIFQj8Jnii0N9HVtx23dndkf-1LoL06L6sLaSxNr)
Those numbers do not appear on that website. They just don't.
The first 3/4 of the site talk about the general concept of why averages can be misleading and why median is, in some circumstances, a better measure using made-up (!!) examples of income inequality to illustrate that point.
Only the last two paragraphs mention real-world numbers. And even then, they only compare average and median for income and net worth. Not how excluding a hand full of individuals would impact the average.
But none of those number's *quite* match any of the ones in the meme.
There's no question that there is a massive income and wealth inequality. But the numbers in the meme are made up.
For the top 10 Americans you'd have to argue about what a meaningfully defined "income" even means - if they even get an actual paycheck, it would represent a minor amount of change in their personal wealth compared to something like a bull or bear run at the stock exchange.
I think these meme is generally based on the net worth = income thing that people seem to use to misrepresent wealthy people
Realistically, the top 1000 or so richest people take in very little as "income", and don't skew the average on that in any real way (if anything removing them might bring the average up, since a good portion only take $1 of salary), since unrealized capital gains =/= income in any way that would reported via statistics
They take in a massive amount of income. Much of it really is salary and a lot of it just happens to be capital gains. Not unrealized capital gains, but real gains - interest and dividends and realized gains.
The IRS last published its top 400 tax returns report in 2014. At that time, the average AGI of the top 400 tax filers was $317M. The average salary and wages portion was $19M, taxable interest was $13.5M, divends were $35M, sale of assets accounted for $192M.
10 years later its probably all far more than twice that. If you go back to 1994 in the same report, the figures were almost 10x less (994 AGI was $46M and in 2014 was $317M). Its entirely possible that these income numbers could be 10x higher now - which may explain why the report hasn't been published in a decade.
https://www.irs.gov/statistics/soi-tax-stats-top-400-individual-income-tax-returns-with-the-largest-adjusted-gross-incomes
EDIT: I did find new IRS methodology since 2014 which now shows the top 0.001% of files, which is about 1500 (vice 400 in 2014). The 2020 tax year data shows the average AGI for these 1500 top earners was $298M. So while we don't know how much the top 400 have changed in the last 10 years, we know that the top 1500 is where the top 400 used to be.
317m, relative to what some people think (10s of billions) is nothing
Even at double that, it’s still a very small fraction of what people think the ultra-wealthy have for income
Granted its not nearly what it would take to make the meme true. But too many people seem to believe the ultrawealthy have all of their money trapped in illiquid assets and don't have real income. Even if you have 10s or 100s of billions of dollars in assests, you still have liquid money and earn a significant income - 100s of millions of dollars each year.
We're looking at a $300M average (mean) for the top 1500 with a lower limit of $77M. That could easily mean the top 10 incomes are well over $1B. Again, not enough to do what is claimed, but a far cry from saying the ultra wealthy don't have significant income each year. They need cash to live their lavish lifestyles and they thrive on driving their income upwards, which means constantly changing their stock positions to maximize gains, which results in realized capital gains that are taxed and included in annual income.
OP is either not well educated when it comes to basic statistics and accidentally shared this meme…. Or this is rage bait… or it’s one of those classic ‘murica bad’ dunk posts
None of this makes sense. As many have reported, the top 10 would have to make like $150 billion per year or more for the numbers to work.
But even that would only work if this were mean income. It’s not. The only place I could find the $74,500 figure is the Census bureau’s Median Household income figure for 2022.
Since it’s a median number, in a country of 340 million, taking 10 individuals off the list really won’t affect the median at all.
https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
Which is not to say that income inequality isn’t a huge problem. Of course it is. But misleading internet memes like this one certainly don’t help the problem at all.
This is where knowning the median income (~$37000) for the US is handy, cause how much lower it is than the average correlates to how much larger the discrepancy is between the top and bottom incomes.
This is also where stats like Musk have more wealth than 50% of the globe combined.
It's because 50% of the globe has negative or zero net worth, so technically someone with a dollar in their bank account has more money than all of them put together.
I believe the figure cited in the OP is the median household income. Which really proves how bad at math the person who made this chart is.
https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
The average income currently is about 60.000 and the median income in the USA is 37,585 USD, so at least the last number is completely wrong (or it's older, data, but then the 70,000 wouldn't make sense).
Only on my phone right now, but can check how much those top 10 and so on would have to earn for it to work. When I am back on my pc.
The chart is citing the median Household income from 2022. Which makes the math even worse. There’s no way 10 people are going to affect the median income in any significant way.
https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
Yep. Without seeing more data, I can’t tell if the person who made the chart is completely unable to do math, or if they just made the last three numbers up.
There are different ways to calculate average. If cutting the top reduces things, you're using the mean. Which is sum then divide.
But when doing an average, if cutting the outliers has drastic changes to the average, you don't use median. That's a bad mfing average.
So you do mode or median. Which won't fall off like this because it looks for general trends instead of raw math.
Honestly, for incomes. Mode makes the most sense. Wages are usually a bell curve.
My guess is if you cut the bottom thousand you might see similar number changes. Not as drastically as cutting the top, but even cutting 10,000 from a \~160 million data point set, is nothing.
So many things are wrong with this math it is hard to know where to start.
Personally the fact that they are treating medians as if it is the same as an average might be the most funny part
It's close. The 2022 data from the Social Security Administration lists the median individual income at $40,847.18 and the average income at $61,220.07.
[https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022](https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022)
You cannot use average when it comes to income as the top 0.1 percent or so have godlike powers over wealth generation, the system is fundamentally for them, while the rest are NPCs. Median is a much better number, however sometimes that number is casually mixed in with household income which is often 2 or even several adults. I once lived with 8 other adults in a large house. In the USA people living in New York are casually lumped in with people from Mississippi, a different ecosystem.
That’s not how a median income works. You also have to exclude the bottom. What’s said is true about average. But most people fit into the median category, not near the bottom or the top.
Every single comment saying what the average top 10 incomes would have to be are completely different! I’m not a mathematician but someone’s math isn’t mathing
It's actually because people are using different definitions, the top comment used mean income of working Americans, I used mean income of all Americans other people are using median incomes so you are going to get different numbers because you made different assumptions about what the meme meant by average American
They're using different definitions sometimes, which leads to different numbers, but effectively the result is the same: the math isn't even close to being right.
Sure, the median statistics are roughly in line with these figures. [Source.](https://fred.stlouisfed.org/series/MEPAINUSA646N) What you are not accounting for is that household income is roughly double that (two earners); and for a large number of people this is a sufficient amount of money. Furthermore, it includes all people 14 and older, whether they are in school, retired, or a stay at home parent, or other life circumstances; real EARNINGS are much higher. Even furthermore, this is the highest real personal income has ever been — by a long shot: standards of living are approximately double what they were in the year 2000. In other words, contrary to the meme, the figure is an indicator of unprecedented, world-leading, broad based prosperity in the United States today.
No. The wealthiest 1%, or even 5%, are wealthy due to assets, not income. Jeff Bezos doesn't really have an income, neither does Elon Musk. Their companies are extremely valuable .They get cash via loans against their assets, but for tax purposes they keep their incomes as low as possible.
In case anyone is interested at looking at some numbers which are actually relevant to the statistic the original meme CLAIMS to be reporting (that being numbers which really map to the amount of money a typical american household has per year), [here](https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income#Disposable_income_per_capita_(OECD) is a wikipedia link that has multiple tables comparing various countries, in various years, using various metrics (mean, median, PPP and not, etc).
Observant viewers will note that the US household is at or near the top of every such list, compared to other nations. This includes nations with extremely advanced social safety nets like Norway and Germany, as well as notoriously rich nations like Switzerland and Luxembourg.
That number is the median household income - there are 127million households. You’d need to remove 100’s of thousands of households to skew that number significantly. The meme poster is full of crap.
I watched a video from an actual finance guy and usually they remove the top 1%. He even demonstrated with data that income-wise both rich and normal people have increased their income at the same rate (in terms of salary). Of course you can argue that this does not account for the increase in housing or insurance and you are right. I am just pointing out hard cash.
161M working Americans but doesn't include 70M Americans receiving social security income, retirement, ssi, ssdi. 99M Americans receive some form of government aid from the federal government. Plus, some states have their own aid programs in addition. Over half of those receiving help get help from more than 1 source. Median numbers are for those with jobs, but the median income of all Americans is skewered.
I think the memer took the US number and then used european data. 35k in the US is very tough and though economic conditions may not be great right now, 35k is way too low.
Others have already stated that this is incorrect. The point of the post still stands however: using averages for income is silly, use median income instead (even modal is more useful). Those values are barely impacted by outliers (like billionaires), if at all.
I think the problem with trying to work this out is that it's easy to assume that everyone else is earning the mean wage of 35k. But obviously you could actually have a very high percentage of people earning 10-20k ( taking into account students, non full time working parents and the elderly for example). Conceivably the math could very well work out.
This is why we cite median income and not *average*. The distribution is not normal (it is log-normal), so average and median are noteworthy the same and average gets skewed higher by those with the very highest incomes.
How would the average in the bottom row make sense? The median income in the US is nearly $50k. Removing just the top 1,000 would certainly not move the average to below what that median is. Especially since the gap from $50k to 0 is just $50k, while there’s a far greater range above it
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No for the numbers to be correct the top 10 Americans would need to have average earnings of $316.6 billion each. Elon musk the current richest person has a net worth of $208.4 billion which is not his earnings in a year
This assumes that all 333.3 million Americans have an income. A quick Google search said that in 2022, 239.1 million Americans actually had an income over $1, which would mean the average earning of the top 10 would have to be $227.1 billion for the first average to check out. Still way more than even the richest average incomes though.
But also would every part time high schooler making like $150 a week bring the average down as well
I made $200 per week working full time (summer) as a high schooler. Brutal.
Where are you working that only pays you $5/hr?
That's not far from many of the salaries for teenagers. There are some places where teens will lose money to travel to work.
Had a paper route in a hilly, very rural area during summer. That shit actively teaches you that work isn't worth it.
That was about minimum wage in the mid-90s Or perhaps it was $200/week after tax
That was after tax in 2004. My pay was $5.80 per hour, but my paychecks were exactly $200 for a 40 hr. week.
I did find this list of statistics: 2021, Individual tax returns excluding dependents: * Top 0.001% (Returns ranked number 1 down to 1,536) * 1536 out of 153,589,907 tax returns * Adjusted gross income floor on percentiles: **$118,014,696** *[These returns had this number or higher as the income]* * Adjusted gross **income share (percentage): 3.01% of all returns** * Top 1.00% (Returns ranked number 1 down to 1,535,899) * 1,535,899 out of 153,589,907 tax returns * Adjusted gross income floor on percentiles: **$682,577** *[These returns had this number or higher as the income]* * Adjusted gross **income share (percentage): 26.303% of all returns** https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile#earlyRelease Among other tables at the above link... >Table 4.1. All Individual Returns Excluding Dependents: Number of Returns, Shares of Adjusted Gross Income (AGI) and Total Income Tax, AGI Floor on Percentiles in Current and Constant Dollars, and Average Tax Rates, by Selected Descending Cumulative Percentiles of Returns Based on Income Size Using the Definition of AGI for Each Year
Could it be Net Worth, rather than Income?
No, because the average net worth in the US is like $1m. All US owned assets is like $250 trillion so if you remove a few billionaires, the average barely moves. It's just made up nonsense by people who don't understand finance or math. What's funny is they don't even understand the income or wealth distribution in the US, the size of and wealth of the US middle class, and instead of learning even the very basics, they make memes and spread them.
No, it doesn't. The US working population is around 161 million. Since 10 people raised the average income from $65,000 to $74,500, that means that these 10 averaged an annual income of (($74,500 * 161,000,010) - ($65,000 * 161,000,000)) / 10 = $152,950,074,500 =~ $153 billion That's more than half of the richest person's net worth. And there are only 3 people in the US who even have that much money. Not a single person has made that much last year. Or any year. Edit: There are people arguing by using the median income in other comments. That doesn't help too much when we don't know where the data in the OP comes form.
To reply to your edit: I think the numbers cited in the original post are median numbers. The census bureau listed $74,580 as the median household income for 2022. Which makes it even more ridiculous to say that taking 10 people off the list would change the total at all. https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
Yeah, medians aren’t impacted (significantly) by a few rich people.
The mean is though isn’t it
Yep. If I have 1000 people, and 999 of them have 1 dollar, and 1 has 999 dollars, the mean (average) is ~~$500~~ $1.99, but the median is $1. EDIT: Messed up the math, but my point is correct - medians dilute the effect of statistical outliers.
The mean would be $1.99, so nowhere near $500, but still a good illustration of how an average can be heavily skewed based on income disparity.
Wouldn't the mean be $1.99?
You know what he mean
>the mean (average) is $500 (999 + 999(1))/1000 = 1.998 Idk man...
1998$ / 1000 = average of 1.99 $ actually
Small typo: the one should have 499,001.
Your math is waaaaaaay off. The mean in your situation is: (999 people * $1 per person) + (1 person * $999 per person) = $1,998 per 1,000 people $1,998 / 1,000 people = $1.998 ~= $2.00 per person Or if your 999 people have a _total_ of $1 among them, then mean is: $1 per 999 people + $999 per 1 person = $1,000 per 1,000 people $1,000 / 1,000 people = $1.00 per person Whichever way you read it, the mean is two orders of magnitude shy of $500.
>Mean is ~~$500~~ $1.99 >EDIT: Messed up the math, my point is correct I mean, your point of how significantly the mean is thrown off is completely undermined. Your comment is better as a case example of how these stupid posts reach their conclusions via really bad math.
I typed it out quick on my phone, and meant to put a much larger number for the rich person (which still wouldn't impact the median.) But I'm not going to go back now and cheese edit it to try to make it like I didn't make a mistake. :-/
It's not completely undermined, the point still stands. The mean is still double what 99.9% of the population earns. If you remove 1 outlier the mean becomes exactly what everyone else earns, that's a big difference from the perspective of the $1 people.
No average is about 2$, median is 1$
I'm not in the mode for this.
I hate you... lol
Yep. The mean individual income in the US is $58,430. The median individual income in the US is $40,480. https://en.m.wikipedia.org/wiki/Personal_income_in_the_United_States#:~:text=The%202023%20Current%20Population%20Survey,the%20mean%20income%20was%20%2459%2C430.
Those also count everyone over the age of 15 ~~whether or not they're working (or want to be)~~ who made $1 or more. Looking at full time workers (35+ hours per week) and median personal income jumps to $55k
Yes, but that’s how we know this post is misinformation and/or rage bait. The median income in the US for individuals is nearly $50k and about $70k for households. So there’s no way the average would be moved significantly below that median mark. So since we know that the average almost certainly should be *above* $50k *at minimum*, we know this post is bs.
Yes, it would mean that there is only five people earn between 65000 and 74500
Medians aren't affected at all by the top or bottom data points, that's the whole point
They're affected by the existence of those points, but not their value.
In context, no. The guy was implying the numbers of the wealthiest affect the median. They do not. Their existence wasn't the question. Given they are wealthy (and exist!), they don't impact the number
Instead of using medians which aren't a valid average measure, since they only consider some of the data in the sample a better solution would be to just simply use the geometric mean. You can simply ignore every person who has an income of 0 and that would make it, so that the mean wouldn't be impacted significantly even if there were some rich people, but it would also use all the data from the sample unlike the median.
> medians aren’t impacted (significantly) by a few rich people. Out of hundreds of millions? Yeah, the median probably wouldn't even move a dollar if you took out the top 1000 earners. Imagine it the other way around. If you removed the bottom 1000 lowest earners would you expect the median to rise noticeably? If the number of earners in a bracket drops logarithmically with respect to the amount of income, then dropping the top earners would actually have less impact than dropping the bottom earners, but not by much.
These. That's why it's stupid looking at average income/wealth for the US to get an idea of how the average American feels or lives? America is a place where the rewards are skewed ~~incrementally~~ exponentially to the top winners from companies (NVDA vs INTC), CEOs vs interns, Top Uni professors to kindergarten teachers, Lebron James to Lebron James Jr, etcetcetc. Will just add that median household income =/= median personal income Real Median Household Income in the United States is at $74580 for 2022. https://fred.stlouisfed.org/series/MEHOINUSA672N Real Median Personal Income in the United States $40480 in 2022. https://fred.stlouisfed.org/series/MEPAINUSA672N More important than just looking at median individual income. It is also important to look at that income relative to a person's local, age, life-style, family status, and factors. An 18-22yr old HS grad earning $40K working a job where they are also getting trades work training, living at home with parents, no student debt, and living in a low cost of living place like sub-urban TX might be feeling well. A 33yr old parent earning $40k as a fast food worker in the bay area, with car/rent/studentloan payments, and a kid to rise might feel like it's fucking impossible.
It’s also household income not individual I’m pretty sure the average household has like 1.5 earners
Yes, median wouldn't change if you removed only that many people and is more reflective of what most Americans make.
that's median HOUSEHOLD income OP is individual income.
Median individual income is 40k, which is in line with OP's post. https://fred.stlouisfed.org/series/MEPAINUSA646N
The median being $40k totally debunks the claim in the OP. You can't bring the mean below the median by removing 0.0001% of the data, it just doesn't work.
Median household income USED to only consider 1 person working per household. Now that number is THREE. Sooo don't assume that 74k is one persons salary.
The average net worth of the top 10 richest Americans is about 133billion. The average net worth of the top 10 richest people in the world is about 155billion, or just about exactly what they would need for the math to work out. My theory is for some reason they, * took American median household income, instead of the mean individual income. * Then they took the top 10 richest people in the world instead of the top 10 richest Americans * Then they used net worth instead of annual income. The person who made this meme has absolutely no idea how finances or statistics work.
>The person who made this meme has absolutely no idea how finances or statistics work. Fortunately for that person, their audience is probably even less financially literate. Like reddit.
[https://www.reddit.com/r/antiwork/comments/1demya5/i\_was\_thinking\_about\_how\_hard\_it\_is\_to\_just\_break/](https://www.reddit.com/r/antiwork/comments/1demya5/i_was_thinking_about_how_hard_it_is_to_just_break/) This was the post, though it's been removed now, I was in it talking last night. There were plenty of people calling it BS, but lots more discussing it as fact. subs like Antiwork are full of things like this, though they are usually technically right, but not always close to right like this. People WANT it to be right so they can show how bad things are, which is silly because you can use real and appropriate stats to show how bad things are. You don't need to make up stats or mislead people.
why would you average only over the 161M working population and not the ~300M total population?
Because there's no point in including children or retirees who won't be working
And if you did anyway, it would only make it even more impossible. The average income of the 10 people would probably be like 250-300 billion each...
They are counting estates as single people. The Walton estate had an income of 310 billion last year.
Well, that's utterly moronic, lol.
[I mean ...](https://www.epi.org/publication/child-labor-laws-under-attack/)
Yes there is because those people still require some form of income even if it’s dependent on a guardian or government assistance.
this (and many other reports about this) use *household* income for this reason.
Because they don’t have salaries so how would they be considered?
Because average income generally only looks at people who have income. You could argue that this should also include pensioners, but that's another discussion. This way also gives the creators the benefit of the doubt because using the entire population would make the result even more outlandish. And since it's still clearly wrong with said benefit, we can be sure that it's wrong, no matter the interpretation.
Should you divide the average dick length by 2 since only half of people have one? There's a difference between having a length of 0 and not having one at all
Yes. I want to be above average.
This one simple trick will make your dick above average instantly!
Because we're looking to see how much workers make on average
1) Because that's how these stats are derived 2) Because it gives the benefit of the doubt to the statement being tested. If you included the entire population, the math would work out even less.
If you count estates as a single person it adds up. The Walton Estate made 310 billion last year in income...now that is also net income, but so is the rest of the numbers.
But that's not how average income numbers are calculated (the $74k), so it's stupid
74k is HOUSEHOLD income. The average household has 3 earners in it now compared to 1 when the system was first created. if you are counting the estate as the household income then the math works out.
Oh you're right, 74k isn't average income at all. 74k is *median* household income. Which means it cannot possibly be true that taking out the top 1000 people drops it to $35,000.
I have someone on my Facebook feed that shared this meme from someone using this link as citation for said meme. [Citation provided by OP](https://patrioticmillionaires.org/2022/02/02/statistics-matter-why-averages-arent-useful-when-talking-about-the-american-economy/?fbclid=IwZXh0bgNhZW0CMTEAAR3zAGR_rX_bLPj0PNShxskeEq1oOuHpynR2tri6INnYnCceUdgunGohTZE_aem_AdkF4KFf7PefleYH2lrugX1nJAEEeSgA8OlQQ6RSdlLDiPDvDIFQj8Jnii0N9HVtx23dndkf-1LoL06L6sLaSxNr)
Those numbers do not appear on that website. They just don't. The first 3/4 of the site talk about the general concept of why averages can be misleading and why median is, in some circumstances, a better measure using made-up (!!) examples of income inequality to illustrate that point. Only the last two paragraphs mention real-world numbers. And even then, they only compare average and median for income and net worth. Not how excluding a hand full of individuals would impact the average. But none of those number's *quite* match any of the ones in the meme. There's no question that there is a massive income and wealth inequality. But the numbers in the meme are made up.
Minor point, but I think income stats are per household rather than per worker - so maybe ~130 million households.
It doesn't surprise me at all, the girl in the meme is a literature genius but hates math.
Sorry for raising the average
how tf did u do that
The whole point of using median is that a few outliers don't change the median hardly at all, so I'm sure the point of the OP was using the average.
For the top 10 Americans you'd have to argue about what a meaningfully defined "income" even means - if they even get an actual paycheck, it would represent a minor amount of change in their personal wealth compared to something like a bull or bear run at the stock exchange.
I think these meme is generally based on the net worth = income thing that people seem to use to misrepresent wealthy people Realistically, the top 1000 or so richest people take in very little as "income", and don't skew the average on that in any real way (if anything removing them might bring the average up, since a good portion only take $1 of salary), since unrealized capital gains =/= income in any way that would reported via statistics
[удалено]
Also because just about everyone has an income, but most people don't have wealth. Most people have negative wealth.
They take in a massive amount of income. Much of it really is salary and a lot of it just happens to be capital gains. Not unrealized capital gains, but real gains - interest and dividends and realized gains. The IRS last published its top 400 tax returns report in 2014. At that time, the average AGI of the top 400 tax filers was $317M. The average salary and wages portion was $19M, taxable interest was $13.5M, divends were $35M, sale of assets accounted for $192M. 10 years later its probably all far more than twice that. If you go back to 1994 in the same report, the figures were almost 10x less (994 AGI was $46M and in 2014 was $317M). Its entirely possible that these income numbers could be 10x higher now - which may explain why the report hasn't been published in a decade. https://www.irs.gov/statistics/soi-tax-stats-top-400-individual-income-tax-returns-with-the-largest-adjusted-gross-incomes EDIT: I did find new IRS methodology since 2014 which now shows the top 0.001% of files, which is about 1500 (vice 400 in 2014). The 2020 tax year data shows the average AGI for these 1500 top earners was $298M. So while we don't know how much the top 400 have changed in the last 10 years, we know that the top 1500 is where the top 400 used to be.
317m, relative to what some people think (10s of billions) is nothing Even at double that, it’s still a very small fraction of what people think the ultra-wealthy have for income
Granted its not nearly what it would take to make the meme true. But too many people seem to believe the ultrawealthy have all of their money trapped in illiquid assets and don't have real income. Even if you have 10s or 100s of billions of dollars in assests, you still have liquid money and earn a significant income - 100s of millions of dollars each year. We're looking at a $300M average (mean) for the top 1500 with a lower limit of $77M. That could easily mean the top 10 incomes are well over $1B. Again, not enough to do what is claimed, but a far cry from saying the ultra wealthy don't have significant income each year. They need cash to live their lavish lifestyles and they thrive on driving their income upwards, which means constantly changing their stock positions to maximize gains, which results in realized capital gains that are taxed and included in annual income.
Take a look at the median income and see how far it is from the average income. It will give you a good idea of whether the math checks out or not.
Median - 37,585 Mean - 59,430
So the numbers are clearly exaggerated in the meme.
Yes they invented a top tier that doesn't actually exist and wildly exaggerated how small the real top-tier cohorts are
OP is either not well educated when it comes to basic statistics and accidentally shared this meme…. Or this is rage bait… or it’s one of those classic ‘murica bad’ dunk posts
As a heads up, you're using mean from 2022 and median from 2021. Median 2022 was 40,480.
None of this makes sense. As many have reported, the top 10 would have to make like $150 billion per year or more for the numbers to work. But even that would only work if this were mean income. It’s not. The only place I could find the $74,500 figure is the Census bureau’s Median Household income figure for 2022. Since it’s a median number, in a country of 340 million, taking 10 individuals off the list really won’t affect the median at all. https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1). Which is not to say that income inequality isn’t a huge problem. Of course it is. But misleading internet memes like this one certainly don’t help the problem at all.
This is where knowning the median income (~$37000) for the US is handy, cause how much lower it is than the average correlates to how much larger the discrepancy is between the top and bottom incomes.
Based on what I found on Google, it includes anyone with an income over 15, so I assume that includes part time workers as well?
This is also where stats like Musk have more wealth than 50% of the globe combined. It's because 50% of the globe has negative or zero net worth, so technically someone with a dollar in their bank account has more money than all of them put together.
But also that's not why Musk has more wealth than 50% of the poorest in the world.
I believe the figure cited in the OP is the median household income. Which really proves how bad at math the person who made this chart is. https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
The average income currently is about 60.000 and the median income in the USA is 37,585 USD, so at least the last number is completely wrong (or it's older, data, but then the 70,000 wouldn't make sense). Only on my phone right now, but can check how much those top 10 and so on would have to earn for it to work. When I am back on my pc.
The chart is citing the median Household income from 2022. Which makes the math even worse. There’s no way 10 people are going to affect the median income in any significant way. https://www.census.gov/library/publications/2023/demo/p60-279.html#:~:text=Highlights,and%20Table%20A%2D1).
Oh, it's straight up *median* wage and not average wage? What a joke lol
Yes it is, or at least, that’s the only source I found that comes close to the number the chart posted.
Hell, even 100 billionaires would lower the *median* maybe $1 lol
Yep. Without seeing more data, I can’t tell if the person who made the chart is completely unable to do math, or if they just made the last three numbers up.
This is one of the dumbest things I've ever seen. How do people still not understand what net worth is, much less how to do basic math.
Dumbass can't figure out how to Google "median wage"
There are different ways to calculate average. If cutting the top reduces things, you're using the mean. Which is sum then divide. But when doing an average, if cutting the outliers has drastic changes to the average, you don't use median. That's a bad mfing average. So you do mode or median. Which won't fall off like this because it looks for general trends instead of raw math. Honestly, for incomes. Mode makes the most sense. Wages are usually a bell curve. My guess is if you cut the bottom thousand you might see similar number changes. Not as drastically as cutting the top, but even cutting 10,000 from a \~160 million data point set, is nothing.
So many things are wrong with this math it is hard to know where to start. Personally the fact that they are treating medians as if it is the same as an average might be the most funny part
It's close. The 2022 data from the Social Security Administration lists the median individual income at $40,847.18 and the average income at $61,220.07. [https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022](https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2022)
You cannot use average when it comes to income as the top 0.1 percent or so have godlike powers over wealth generation, the system is fundamentally for them, while the rest are NPCs. Median is a much better number, however sometimes that number is casually mixed in with household income which is often 2 or even several adults. I once lived with 8 other adults in a large house. In the USA people living in New York are casually lumped in with people from Mississippi, a different ecosystem.
That’s not how a median income works. You also have to exclude the bottom. What’s said is true about average. But most people fit into the median category, not near the bottom or the top.
Every single comment saying what the average top 10 incomes would have to be are completely different! I’m not a mathematician but someone’s math isn’t mathing
It's actually because people are using different definitions, the top comment used mean income of working Americans, I used mean income of all Americans other people are using median incomes so you are going to get different numbers because you made different assumptions about what the meme meant by average American
Some have it as the average of income earners and some have it as the average of every American, including 2 year olds. Put those kids to work!
They're using different definitions sometimes, which leads to different numbers, but effectively the result is the same: the math isn't even close to being right.
Sure, the median statistics are roughly in line with these figures. [Source.](https://fred.stlouisfed.org/series/MEPAINUSA646N) What you are not accounting for is that household income is roughly double that (two earners); and for a large number of people this is a sufficient amount of money. Furthermore, it includes all people 14 and older, whether they are in school, retired, or a stay at home parent, or other life circumstances; real EARNINGS are much higher. Even furthermore, this is the highest real personal income has ever been — by a long shot: standards of living are approximately double what they were in the year 2000. In other words, contrary to the meme, the figure is an indicator of unprecedented, world-leading, broad based prosperity in the United States today.
Median HH earnings in 2022 was $75k, average HH earnings was $106k
Man, y'all rish as fuck I'm in the US but only making like 66k yearly, so based on your numbers I'm in the bottom 20-30%
No. The wealthiest 1%, or even 5%, are wealthy due to assets, not income. Jeff Bezos doesn't really have an income, neither does Elon Musk. Their companies are extremely valuable .They get cash via loans against their assets, but for tax purposes they keep their incomes as low as possible.
In case anyone is interested at looking at some numbers which are actually relevant to the statistic the original meme CLAIMS to be reporting (that being numbers which really map to the amount of money a typical american household has per year), [here](https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income#Disposable_income_per_capita_(OECD) is a wikipedia link that has multiple tables comparing various countries, in various years, using various metrics (mean, median, PPP and not, etc). Observant viewers will note that the US household is at or near the top of every such list, compared to other nations. This includes nations with extremely advanced social safety nets like Norway and Germany, as well as notoriously rich nations like Switzerland and Luxembourg.
That number is the median household income - there are 127million households. You’d need to remove 100’s of thousands of households to skew that number significantly. The meme poster is full of crap.
The median (which is the more accurate determinant of what the average person on the street makes) is 48,000 approximately. No, it doesn't check out.
I watched a video from an actual finance guy and usually they remove the top 1%. He even demonstrated with data that income-wise both rich and normal people have increased their income at the same rate (in terms of salary). Of course you can argue that this does not account for the increase in housing or insurance and you are right. I am just pointing out hard cash.
The IRS publishes these numbers, how many people are in each tax group, the average tax rate and average income for these tax groups.
This is why median income is a better measure.... Basically, just explaining how arithmetic average works on a right-skewed data set.
161M working Americans but doesn't include 70M Americans receiving social security income, retirement, ssi, ssdi. 99M Americans receive some form of government aid from the federal government. Plus, some states have their own aid programs in addition. Over half of those receiving help get help from more than 1 source. Median numbers are for those with jobs, but the median income of all Americans is skewered.
I think the memer took the US number and then used european data. 35k in the US is very tough and though economic conditions may not be great right now, 35k is way too low.
Others have already stated that this is incorrect. The point of the post still stands however: using averages for income is silly, use median income instead (even modal is more useful). Those values are barely impacted by outliers (like billionaires), if at all.
Even more important than using median - at least use the correct baseline number at the start of an expression!
What's the point of removing outliers on one end while keeping outliers on the other? Surely this would affect the data in some way, right?
I think the problem with trying to work this out is that it's easy to assume that everyone else is earning the mean wage of 35k. But obviously you could actually have a very high percentage of people earning 10-20k ( taking into account students, non full time working parents and the elderly for example). Conceivably the math could very well work out.
This is why we cite median income and not *average*. The distribution is not normal (it is log-normal), so average and median are noteworthy the same and average gets skewed higher by those with the very highest incomes.
How would the average in the bottom row make sense? The median income in the US is nearly $50k. Removing just the top 1,000 would certainly not move the average to below what that median is. Especially since the gap from $50k to 0 is just $50k, while there’s a far greater range above it
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