Anyone living in the United States can tell you about how widely spread the family income range is. There are many factors that play a role in the amount of money you make, even if you keep your education and employment history constant. As unfortunate as it is, gender, race, age and geographic location (among others) will all contribute to your early earnings. For the sake of consistency, this article will focus on United States as a whole, and will not take into account state and/or metropolitan variances.

The median household income in the United States for 2013 was roughly $51,939, according to most recent Census data. This number splits the American population in half on a financial basis; with one half making less than this figure, and the second half making more (in some cases – much, much more).


Since the Great Recession hit America, the median household income fell by more than 8% in the 6 years between 2007 and 2013. If we account for inflation, family incomes are currently at their lowest point since the mid 1990s.

If we look back even further – to the end of World War II, we can see some interesting patterns. Between 1945 and the late 1970’s, incomes in the United States were becoming more and more equal, and the gap between the upper and lower crust was shrinking at a noticeable rate. This pretty much means, that the lower income brackets were rising faster than those at the top. This pattern persisted for a few decades, all the way up until the late 1970’s when the trend took a complete 180º turn, and the rich started getting richer (a pattern that can still be observed today).

Men Eating Soup During Great Depression

Let’s look at some numbers to really appreciate the difference between the trends leading up to 1977, compared to the way things are now. Data shows that the top 1% of households received about 8.9% of all pre-tax income in 1976. If we look at more recent data, for example, the 2012 tax year, we would notice that the top 1 percent share had more than doubled. Currently, the top 1% of the United States population is raking in about 22.5% of total yearly income. That being said, what exactly are the income brackets that divide American families? Well, this varies slightly depending on whom you ask, however regardless of your source it is no argument that the lines between the upper and middle classes are more than clear.

According to the New York Times, you need to make over $89,125 to fall into the top 25 percent of all families in the United States – based on pre-tax income alone. Numbers reported by the NYT also suggest that if you make over $50,742, you will fall into the top half of all American families. Although not immediately impressive, the middle-class figure becomes much more appealing when considering the fact that the bottom quarter of American households only net $25,411 or less.


Just like with any statistical model, there will always be outliers. In this case we can look at the vast extremes like the top 1% of families making more than $382,001 a year, and the polar opposite, bottom 10% that end up making a mere $12,154 (sometimes even less).

While the reported numbers of the top 1% are certainly impressive, it’s important to consider that most of the people falling into this bracket were born with various socioeconomic advantages. That’s not to say the numbers are any less valid, or the incomes are any less deserved. The point here is that a vast majority of the 1% had entered this life with a financial head start. Life isn’t fair, deal with it.


The one percent also put in impressive amounts of work to remain where they are on the financial pyramid. Statistically speaking – the 1% work longer hours, and are more than three times as likely to work more than 50 hours a week when compared to the bottom 99% of families

Additionally, a large chunk the 1 percenters are self-employed… maybe they’re on to something after all.

Let’s take a look at the life of an ‘average’ member of the 1 percent. Before we do, though, it’s important to establish that the 1% is super variable. For example, it takes only $380k to be in the national 1%, but it takes nearly a million to be among the 1 percent of earners in Stamford, Conn. For the sake of consistency, we will use the 1% national average provided by the Tax Policy Center, which is around $1.5 million.

Moving on…


First – married 1 percenters are just as likely as the rest of the American public to have two incomes. Goes to show that no matter how much money you make, it never hurts to earn a bit more.

While both members of the household tend to work, men are more likely to be the breadwinners – earning (on average) 75 percent of the family income, compared to the 64 percent of the income earned by men in other households.

While, it’s statistically likely that men of the house make the vast chunk of household cash, it’s curious to see where they tend to be employed. In the case of the one-percenters, the most likely profession will lie in the field of medicine. Doctors are more likely than any other profession to secure their place in the 1 percent. In fact, 20% of the super rich are involved in medicine in one fashion, or another.

While, the 1% gets to enjoy a vast array of perks ranging from private yachts to private islands, most of us are not as lucky. Let’s side track from the uber rich, and take a look at the way an average American household lives.


An average Joe, aged 25 or older, will make roughly $32,000 a year and hold a white-collar office job. He generally does not have a college degree, and either has been, is, or will be married, as well as divorced, at least once during his lifetime. Interesting, how the entire (average) middle class lifestyle can be effectively summarized in one sentence…

While the average Joe household gets by just fine, the family definitely doesn’t live a life of luxury. Things start looking up for upper-middle class families, though. These families commonly exceed household incomes of $100,000, with some smaller one-income families earning in the high 5-figure range. Generally speaking, educational attainment is the biggest distinguishing feature of the upper-middle class.


These families have a greater disposable income than the middle class, which means more international vacations instead of road trips to the lake, individual bedrooms for kids, and multiple cars – amongst other privileges that the lower income bracket might not afford.

While there is a clear divide between the social classes, some people will argue that only a few people are truly aware of their place in the economic hierarchy.

Robert Gordon, a social sciences professor from Northwestern University’s economics department claims that, “people have only a vague idea of their income, based primarily on their income-tax returns, if they are filers,” he says. “If they are not filers, they are in a large lower group that has only a vague idea of what their income is.”


“A large majority of Americans live in the outer fringes of cities, suburbs, and exurbs,” he continues. “Theirs is a life of low density and backyard barbecues. Many more people today compared to five years ago are having trouble paying the mortgage on this lifestyle, but it doesn’t change their feeling that they are living a middle-class lifestyle.”

To sum it up, and quote Thomas Gray – “Ignorance is bliss.”