Average American Salary is $45,790 and Means Absolutely Nothing

I get a little frustrated when I read articles that deal with average American's earnings.  Today I read an article on yahoo that shows you "where your salary ranks across the country."  In the first section it talks about the average American worker earns $45,790 a year.  Sorry, that's a little inflated.  Average salary as a whole is a terrible way to see what an average citizen earns, and here is why.

Let's break this down into 5 average workers, for easy math.

Bob 25,000 yr

Lisa 40,000 yr

Jake  30,000 yr

Andy 18,000 yr

James 250,000 / yr

So now if we add up the salaries and divide by 5, (how you get averages) we end up with:  72,600 a year.   Out of these 5 workers, the average pay is 72,600 a year.

Doesn't make sense, does it?  That's how the math works.  4 of these workers make far, far less than the average, but one rich guy skews the whole thing.

And that's how it works when you do the average income for our country.   The mega rich who account for a huge amount of the income earnings for the country throw the average so far off, it doesn't even make sense.

The best way to judge how the country is doing and your income is to go by the median income, which is the middle of the road.  In this situation, it would be Andy at 30,000 dollars a year.

Doing some research, the median income of the United States was around 26,000 in 2011, and it hasn't risen that much since.