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Staying informed about the average US salary is an important metric when hiring top talent for your organization.
Understanding these figures helps you benchmark compensation, ensure fair pay, and boost employee satisfaction and productivity.
In this article, we'll cover what influences the key labor statistics, explore state-by-state breakdowns, and discuss the importance of median household income.
By the end, you'll be equipped with valuable insights to make informed decisions and maintain your organization's competitiveness in the ever-evolving job market.
What is the Average Salary in the US for 2024?
In 2024, the average salary in the United States reached $62,027, according to the U.S. Bureau of Labor Statistics. This represents a 4.5% increase from the previous year, showcasing a steady wage growth across various sectors.
Why are Average Salaries Important?
Understanding average salaries is important for both employees and employers.
For employees, understanding the typical pay range for their occupation helps position them better when they negotiate for fair compensation. When they know how their current salary compares to the average, this helps them plan their careers more efficiently.
Typically when employees are underpaid, this leads to lower job satisfaction and productivity. Providing this data publicly helps everyone level the playing field.
For employers, attracting top talent is key to building their organization. To stay competitive, they often use these types of statistics. When you can hire talent at a fair rate, this helps reduce turnover.
In turn, this helps the employer’s brand and reputation.
From a broader economic perspective, average salaries reflect the overall health of the job market and economy. When you see that wages are static, there may be other underlying economic issues. In short, this acts as an indicator that we should investigate more.
Policymakers and researchers analyze salary trends to inform decisions around minimum wage laws, education and training programs, and efforts to address income inequality.
State By State Average Salary Breakdown
Top 5 States with the Highest Average Salaries
Updated June 2024 - The top 5 states with the highest average salaries in 2024 are:
- Massachusetts: $80,330
- New York: $78,620
- Washington: $78,130
- California: $76,960
- New Jersey: $73,980
These states are known for their thriving economies, high-paying industries, and skilled labor force. Massachusetts, for example, is home to numerous prestigious universities and a booming biotech industry, contributing to its high average salary.
Factors Contributing to High Salaries
Several factors contribute to the high average salaries in these states:
- Strong presence of high-paying industries (e.g., finance, technology, healthcare)
- Highly educated and skilled workforce
- High cost of living, which often correlates with higher salaries
- Robust job markets and low unemployment rates
States with the Lowest Average Salaries
On the other end of the spectrum, the states with the lowest average salaries in 2024 are:
- Alabama: $53,400
- South Dakota: $53,230
- West Virginia: $52,200
- Arkansas: $51,250
- Mississippi: $47,570
These states often have smaller economies, fewer high-paying industries, and lower living costs than the top-earning states.
Factors Influencing the National Average Salary
Several key factors play a role in determining the national average salary. These include:
Industry and Occupation
The type of industry and specific occupation significantly impact an individual's salary. For example, in 2024, the tech sector continues to offer some of the highest average salaries, with software developers and data scientists earning well above the national average, according to a report from Forbes.
On the other hand, service industry jobs, such as those in retail and hospitality, tend to have lower average salaries.
However, the ongoing push for increased minimum wages has helped to boost incomes in these sectors over the past year.
High Paying Industries Include:
- Technology / Software: average salary $130,000+
- Finance / Banking: average salary $139,000+
- Healthcare / Pharmaceutical / Biotechnology: average salary $180,000+
- Energy / Oil: average salary $80,000+
- Aerospace and Defense: average salary $101,000+
Education and Experience Level
Higher levels of education and professional experience often correlate with higher salaries. In 2024, individuals with advanced degrees, such as master's or doctoral degrees, continue to command higher salaries compared to those with only a high school diploma or bachelor's degree.
Additionally, as professionals gain more experience in their field, their salaries tend to increase. This trend has remained consistent over the past 12 months, with many companies offering competitive salaries to retain experienced talent.
Location and Cost of Living
The geographic location and cost of living in an area also influence average salaries. Cities like San Francisco and Los Angeles often have higher costs of living. As such, you can expect a higher salary average due to the increase in everyday spending.
The pandemic-driven shift towards remote work has allowed some professionals to relocate to areas with a lower cost of living while maintaining their current salaries, potentially increasing their purchasing power.
Understanding Median Income for Households
While the average salary provides a general idea of individual earnings, the median salary offers a broader perspective on the financial well-being of US households.
Median income refers to the income level at which half of the households earn more, and half earn less. In 2024, the median salary in the US stands at $82,685 for a two-person family as reported by the Justice Department.
It's important to note that average salary and median salary are two different metrics. Average salary focuses on individual earnings, while median income takes into account the combined incomes of all members of a household.
As we move into the second half of 2024, experts predict that average salaries will continue to rise, albeit at a more gradual pace. The ongoing emphasis on wage equality and the fight for increased minimum wages are expected to play a significant role in shaping the income landscape in the coming months.
Moreover, the rapid evolution of technology and the growing demand for skilled professionals in emerging fields, such as artificial intelligence and robotics, are likely to drive salary growth in these sectors.
Average Wages in the United States
The average wage in the US in March 2024 was $11.11 as reported by Statista. This translates to an average annual wage of approximately $23,109 for a full-time worker putting in 2,080 hours per year.
It is worth noting that jobs that are calculated by wage (typically hourly) are often lower-paying jobs which is why salary workers often make more money than their counterparts.
Persistence of the Gender Pay Gap
The gender pay gap refers to the differences in income earned by men and women. In 2022, women earned an average of 82 cents for every dollar earned by men, meaning there was an 18-cent gender pay gap.
Factors contributing to the ongoing pay gap include the "motherhood penalty," gender segregation across occupations, and gender discrimination.
The consequences of the gender pay gap are significant. Over a 35-year career, an American woman with a college degree will make about $1.2 million less than a man with a similar education.
Navigating the US Salary Landscape
The data is clear: competitive salaries are a cornerstone of a thriving organization. As we move further into 2024, it's essential to benchmark your compensation against the national averages and industry standards.
Take action now—conduct a salary review, adjust your pay scales, and ensure your organization remains an attractive destination for top talent. Your proactive steps today will shape a more prosperous tomorrow
Enhance your employee experience with Knit People’s integrated solutions. Get started with a trial today and take the hassle out of navigating the salary landscape.
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