3 Economic Realities Will Influence Your Salary.

Last week, we gave jobseekers information on the minimum wage in the United States. We found that the minimum you can earn by law ranges from $7.50 per hour—the Federal minimum (even less for tip workers and certain others) to $17 in Washington, DC. But, most readers earn more than the minimum wage. So, what are a few of the economic factors that influence the wage or salary you earn? And what is the best statistical measure of a “typical” salary?

We have covered two important factors in past posts—your occupation and your education level—and provide links for our detailed posts on these issues in the paragraphs below. Then, we’ll provide information on a major factor we alluded to last week—your geographic location. Last, but not least, we will explain why we prefer to discuss median salaries instead of mean, or average, salaries.

Of course, many other things determine your salary. This is just a starting point for your own industry and company research.

Your Occupation

The career field and specific job you work in will, not surprisingly, significantly influence your salary. As we wrote in a blog post last September, median salaries for 20 jobs with the most projected growth ranged from a median of $30,180 per year for personal care aides to nearly $140,000 per year for financial managers in 2022.

As we noted in the previous post, the median salary correlates with the skill and training level each job requires. Nurse practitioners that need degrees and licensure, for example, earned $121.610 in 2022 median salary, while personal care aides earned less than 25% of that amount

Your Education Level

College graduates earn more than high school graduates. Our review of US Department of Labor data in another post showed that workers with college degrees earned median salaries of about 168% more than those with high school diplomas in 2022

But the location of your job makes a difference, too.

Your Geographic Location

 We have not covered the impact of your work location on salary in the past. As shown below (from individual state and Wikipedia data), median annual salaries ranged from nearly $80,000 in Washington, DC down to just over $35,000 in Mississippi for 2021. Don’t pack up your home and family to move, though, without checking on the cost of living in the high-salary locations, and any other economic and quality-of-life issues that concern you.

List of states (including the District of Columbia) and median salaries for 2021:

1     District of Columbia, $79,960

2     Massachusetts       , $58,540

3     Washington, $50,450

4     Alaska, $48,820

5     New York, $48,800

6     Connecticut, $48,720

7     Maryland, $48,460

8     New Jersey, $48,200

9     Colorado, $47,940

10   California, $47,920

11   Rhode Island, $47,780

12   Hawaii, $47,700

13   Minnesota, $47,590

14   Virginia, $47,200

15   New Hampshire, $46,960 (average $79,928)

16   North Dakota, $46,960 (average $69,662)

17   Oregon, $46,910 (average $72,616)

18   Vermont,       $46,910 (average $60,840)

19   Delaware, $46,700

20   Illinois, $46,630

21   Wyoming, $45,890

22   Michigan, $45,190

23   Wisconsin, $45,000

24   Pennsylvania, $44,900

25   Maine, $42,950

26   Ohio, $39,680

27   Arizona, $39,500

28   Iowa, $39,070

29   Texas, $39,030

30   Utah, $38,860

31   Nebraska , $38,780

32   North Carolina, 38,370

33   Georgia, $38,340

34   Indiana, $38,330

35   Missouri, $38,130

36   Kansas, $38,050 (average $65,062)

37   Montana,       $38,050 (average $57,994)

38   Florida, $37,920

39   Nevada, $37,900

40   New Mexico, $37,810

41   South Dakota, $37,710

42   Tennessee, $37,700

43   Kentucky, $37,660

44   Idaho, $37,550

45   Oklahoma, $37,500

46   Louisiana, $37,320

47   South Carolina, $37,250 (average $60,698)

48   Alabama, $37,250 (average $59,152)

49   West Virginia, $36,860

50   Arkansas, $36,680

51   Mississippi, $35,070

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Note: We broke ties in the rankings by considering the state’s average salary.    

Median Salary vs. Average Salary

We consistently write about median salaries rather than average salaries in our blog because the median is a better measure of “central tendency.” Briefly, according to Khan Academy, the median is the middle point in a set of data. The average, or mean, is the result of adding all the numbers in a data set, and then dividing by the number of values we added together.

Our problem with using average salaries is that averages are easily skewed. For example, if four employees in a company each earned $100,000 annually, and the fifth employee, presumably the boss, earned $1 million, the average salary at the company would be $1,400,000 / 5, or $280,000 per year. But the median salary value in the set of five numbers is much lower–$100,000 per year. It is more representative of the salary we might earn. While this is a simplistic, and perhaps extreme example, it illustrates that talking about median salaries is more useful.

Colleges and career schools sometimes provide data on average salaries instead of median salaries because the number is easily influenced by the high salaries of a few graduates. Years ago, the rationale was that the median was more difficult to calculate and required more computing time for large data sets. It’s easy to crunch numbers now, even with an inexpensive laptop computer or smartphone, so don’t let anyone fool you today! Use our data as a starting point, and then do your own research before accepting a job offer.