6 ms·

The average salary distribution is surprising to me. I find myself right in the middle of the distribution (~50th percentile), and yet I know for a fact that I

The average salary distribution is surprising to me. I find myself right in the middle of the distribution (~50th percentile), and yet I know for a fact that I have the highest salary out of everyone in my social circle, which includes several competent workers in the same field. I also believe other data suggests that my household income puts me at least in the top 10% of earners. How can these both be true at the same time? Do these data really represent the state of the general labor market?

yellowstuff 5y ago
Mean personal income in the US is $54k. https://fred.stlouisfed.org/series/MAPAINUSA646N https://fred.stlouisfed.org/series/MAPAINUSA646N This post shows an average in every region more than double that. It's not a representative sample. The charts are pretty but I don't think this analysis has any value.
- eigen 5y ago
  > Mean personal income in the US is $54k. https://fred.stlouisfed.org/series/MAPAINUSA646N https://fred.stlouisfed.org/series/MAPAINUSA646N says "People 15 years old and over beginning with March 1980, and people 14 years old and over as of March of the following year for previous years." seems it would be reduced by full-time students, retired people earning Social Security, etc. > This post shows an average in every region more than double that. says "this report reveals some of the rapidly changing dynamics in how companies of all sizes are compensating their employees." seems it only includes employees and thus would not include students, retired, etc.
  - yellowstuff 5y ago
    That can't possibly explain all the difference. Mean family income is $115k, still lower than what they have for average salary in any region. https://fred.stlouisfed.org/series/MAFAINUSA646N https://fred.stlouisfed.org/series/MAFAINUSA646N If this is meant to be a representative sample of the US, the data doesn't pass the sniff test. They don't provide enough context to understand how else we should understand it.
    - bdowling 5y ago
      > Insights from this report represent data collected from Sequoia’s Employee Experience Surveys (2017 – 2021), anonymized information and trends from our database, and Dataforest surveys. Dataforest is refreshed periodically with updates from new survey submissions. The data here appear to come from salary surveys of working individuals. The US Census Bureau data appear to be reports of income from all sources for all persons, which appears to include children 14 and over, full-time students, disabled persons, retired persons, and other persons unlikely to be reporting a salary to Sequoia.
    - eigen 5y ago
      the Fed counts all people over the age of 14. using the same population, the median income is ~$36k [1] so over half of the population makes less than 2/3 of the mean personal income. [1] https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N also, this report only covers a listed number of "departments" and leaves off many lower wage occupations. retail, child care, most unskilled labor, etc dont appear to be included in the Strategy, Sales, Design, Engineering, Leadership, etc.
throwaway22032 5y ago
The categories to me suggest that they're only looking at office workers or something like that.
kmonad 5y ago
They, in poor form, report the "average" without explicitly specifying if they are referring to the mean or the median. Your perception would be shared by the majority of people if it's the mean they are presenting (which is most likely the case) because of the extreme income distribution. Overall, I am not a fan of the data presentation here.
- rahimnathwani 5y ago
  GP mentioned 'distribution', so I guess they're looking at the distribution charts further down (under 'pay gap') and not the 'average salary's chart.
  - kmonad 5y ago
    Hmm that chart is also pretty weird. What is any one salary on this chart averaged over? States? Years?
    - rahimnathwani 5y ago
      You don't need to calculate any averages to plot a distribution.
      - kmonad 5y ago
        Indeed. Yet, this graph shows the distribution of averages. See the x-axis. I didn't want to be so blunt, but due to its shoddy presentation, I cannot trust what this page is showing.
        rahimnathwani 5y ago
        Haha, had another look and 100% agree with you.
rahimnathwani 5y ago
"How can these both be true at the same time?" Selection bias. Household income percentile is based on all households. Salary distribution excludes people who are not employed.
yobbo 5y ago
(As mentioned) median, not mean, is the relevant statistic for income. The income distribution is exponential, so mean is irrelevant for individuals. One individual could account for 100% of the income, and the mean would be the same.

yellowstuff 5y ago

Mean personal income in the US is $54k. https://fred.stlouisfed.org/series/MAPAINUSA646N https://fred.stlouisfed.org/series/MAPAINUSA646N This post shows an average in every region more than double that. It's not a representative sample. The charts are pretty but I don't think this analysis has any value.

eigen 5y ago
> Mean personal income in the US is $54k. https://fred.stlouisfed.org/series/MAPAINUSA646N https://fred.stlouisfed.org/series/MAPAINUSA646N says "People 15 years old and over beginning with March 1980, and people 14 years old and over as of March of the following year for previous years." seems it would be reduced by full-time students, retired people earning Social Security, etc. > This post shows an average in every region more than double that. says "this report reveals some of the rapidly changing dynamics in how companies of all sizes are compensating their employees." seems it only includes employees and thus would not include students, retired, etc.
- yellowstuff 5y ago
  That can't possibly explain all the difference. Mean family income is $115k, still lower than what they have for average salary in any region. https://fred.stlouisfed.org/series/MAFAINUSA646N https://fred.stlouisfed.org/series/MAFAINUSA646N If this is meant to be a representative sample of the US, the data doesn't pass the sniff test. They don't provide enough context to understand how else we should understand it.
  - bdowling 5y ago
    > Insights from this report represent data collected from Sequoia’s Employee Experience Surveys (2017 – 2021), anonymized information and trends from our database, and Dataforest surveys. Dataforest is refreshed periodically with updates from new survey submissions. The data here appear to come from salary surveys of working individuals. The US Census Bureau data appear to be reports of income from all sources for all persons, which appears to include children 14 and over, full-time students, disabled persons, retired persons, and other persons unlikely to be reporting a salary to Sequoia.
  - eigen 5y ago
    the Fed counts all people over the age of 14. using the same population, the median income is ~$36k [1] so over half of the population makes less than 2/3 of the mean personal income. [1] https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N also, this report only covers a listed number of "departments" and leaves off many lower wage occupations. retail, child care, most unskilled labor, etc dont appear to be included in the Strategy, Sales, Design, Engineering, Leadership, etc.

throwaway22032 5y ago

The categories to me suggest that they're only looking at office workers or something like that.

kmonad 5y ago

They, in poor form, report the "average" without explicitly specifying if they are referring to the mean or the median. Your perception would be shared by the majority of people if it's the mean they are presenting (which is most likely the case) because of the extreme income distribution. Overall, I am not a fan of the data presentation here.

rahimnathwani 5y ago
GP mentioned 'distribution', so I guess they're looking at the distribution charts further down (under 'pay gap') and not the 'average salary's chart.
- kmonad 5y ago
  Hmm that chart is also pretty weird. What is any one salary on this chart averaged over? States? Years?
  - rahimnathwani 5y ago
    You don't need to calculate any averages to plot a distribution.
    - kmonad 5y ago
      Indeed. Yet, this graph shows the distribution of averages. See the x-axis. I didn't want to be so blunt, but due to its shoddy presentation, I cannot trust what this page is showing.
      - rahimnathwani 5y ago
        Haha, had another look and 100% agree with you.

rahimnathwani 5y ago

"How can these both be true at the same time?" Selection bias. Household income percentile is based on all households. Salary distribution excludes people who are not employed.

yobbo 5y ago

(As mentioned) median, not mean, is the relevant statistic for income. The income distribution is exponential, so mean is irrelevant for individuals. One individual could account for 100% of the income, and the mean would be the same.