Earlier this week, the Wall Street Journal produced an income calculator that allowed you to quickly type in your household income and out popped your income percentile. The problem, however, was that result can be misleading, since it doesn't distinguish between households and individuals. For example, an individual making $50,000 and a household of four making $50,000 are very different things. A slightly better, but still imperfect, way to understand where your pay stacks up is to consider individual incomes.
The Social Security Administration today released statistics that provide one way to look at that. Its data shows the net compensation distribution (which includes, "wages, tips, and the like" from W-2's filed*) in the U.S. for 2010. Here's a chart I made from the data. You'll probably want to click on this one so you can enlarge and actually read it.
A few explanatory points:
- The left axis shows the number of people within each income range (blue line).
- The right axis shows the percentile based on the cumulative number (red line).
- Those vertical black lines shown on the chart itself represent points at which the size of the income range jumps. For example, after the range from $195,000 to $199,999, the SSA's next range extends from $200,000 to $249,000. That's why you see the strange blip: the new set ranges are ten times as large!
This chart shows what you might have guessed: incomes are heavily weight towards the bottom. The SSA data shows that 90% of filers reported net compensation below $84,999 per year. And 99% of Americans' net compensation was below $250,000 per year.
The SSA also explains that net compensation for the year was about $6 trillion. Over the 150,398,796 people it accounts for, that averages out to $39,959.30 -- well above the median, which was $26,363.55. The top 1% of individual earners accounted for between 12% and 15% of all net compensation.
* Note: As a commenter points out, the SSA's numbers leave out some forms of income, and is meant to show where various incomes stand in terms of wages.
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