The future is already here—it’s just unevenly distributed.
—WILLIAM GIBSON
Some of my friends didn’t like the title of this book when I shared it with them. The word “normal” has become freighted, meant to signify a certain perspective or way of life.
When I say “normal,” I mean the average. As in, if you lined up Americans by some quality or trait or classification—education, income, savings, proximity to living in a city, and so on—the person in the middle would be normal. So having a PhD is not normal, but neither is being a junior high dropout.
When I was traveling in New Orleans last year, I had a conversation with my Uber driver that stuck with me. Laurie was a pleasant woman in her late forties who looked like a typical suburban mom. When she found out that I worked in entrepreneurship she exclaimed, “That’s great—I’m an entrepreneur, too!” She had started a kitchen remodeling business a few years earlier. As we talked, it emerged that her business had dried up and that she was driving an Uber to make ends meet. She had two sons, one of whom had special needs, and she teared up talking about trying to find the right school for him. She and her family got by on a partial disability payment that she received on behalf of her husband who had died a few years earlier. “I don’t know what we’d do without that—we’re barely scraping by as it is,” she said, her voice cracking. By the end of the ride, she had composed herself but seemed a little embarrassed as we said our goodbyes.
I was a little embarrassed, too, for a different reason. I thought, Man, my problems are total nonsense compared to her problems. My circles didn’t include many people in her position who were stressed about paying next month’s bills. But the single mom I chatted with in New Orleans driving a car to make ends meet was pretty normal. The Iraq vet working as a security guard in Detroit who talked sports with me is normal; he came home having seen a couple friends die and felt lucky to have found a secure job. The bartender in Cleveland I spoke to who’s trying to save up to go to nursing school is normal. She was taking time off from school to save money.
I’ve found conversations with Americans like these enlightening. Most of my friends and peers in New York and San Francisco have little reason to visit cities in the middle of the country. And even cities like New Orleans, Detroit, Cleveland, Pittsburgh, Birmingham, Baltimore, St. Louis, and Cincinnati are relative pillars of commerce, education, and prosperity compared to their surrounding areas and most of the country.
Most of us live around people like ourselves. What feels normal to each of us is based on our context. Knowing what’s truly normal or average in a big country like America requires some work. Take education for instance—if you are reading this, you are probably a college graduate or student and most of the people you know also graduated from college. That puts you, your friends, and your family in approximately the top third of the U.S. population. If you have a graduate or professional degree, you are in the top 12 percent of the population by educational attainment. The average American achieves something between one credit of college and an associate’s degree; 60.25 percent of Americans 25 years and older have attended some college and 43.51 percent have at least an associate’s degree. These numbers trend slightly upward among younger people. However, it would be entirely accurate to say that the average American is not a college graduate.
Think of your five best friends. The odds of them all being college graduates if you took a random sampling of Americans would be about one-third of 1 percent, or 0.0036. The likelihood of four or more of them being college graduates would be only about 4 percent. If that described you, you’re among the educated class (even without necessarily knowing it; in your context, you’re perfectly normal).
Educational Attainment of People (25 Years and Over) by Sex & Race (2016)
Characteristic: Sex: Male
High school graduate or more: 88%
Some college or more: 58%
Associate’s degree or more: 41%
Bachelor’s degree or more: 32%
Advanced degree: 12%
Characteristic: Sex: Female
High school graduate or more: 89%
Some college or more: 60%
Associate’s degree or more: 43%
Bachelor’s degree or more: 33%
Advanced degree: 12%
Characteristic: Race: White alone
High school graduate or more: 89%
Some college or more: 59%
Associate’s degree or more: 43%
Bachelor’s degree or more: 33%
Advanced degree: 12%
Characteristic: Race: Non-Hispanic White alone
High school graduate or more: 93%
Some college or more: 64%
Associate’s degree or more: 47%
Bachelor’s degree or more: 36%
Advanced degree: 14%
Characteristic: Race: Black alone
High school graduate or more: 87%
Some college or more: 53%
Associate’s degree or more: 32%
Bachelor’s degree or more: 23%
Advanced degree: 8%
Characteristic: Race: Asian alone
High school graduate or more: 89%
Some college or more: 70%
Associate’s degree or more: 60%
Bachelor’s degree or more: 54%
Advanced degree: 21%
Characteristic: Race: Hispanic (of any race)
High school graduate or more: 67%
Some college or more: 37%
Associate’s degree or more: 23%
Bachelor’s degree or more: 16%
Advanced degree: 5%
Source: U.S. Census Bureau, 2016 Current Population Survey.
That’s what’s normal in education. How about wealth and income?
The median household income was $59,309 in 2016. Each household typically consists of multiple family members, however. The median personal income in the U.S. was $31,099 in 2016 and the mean was $46,550. The relevant statistic for seeing how most people live and work is the median, as the mean gets dragged up by the handful of people making millions at the top. The median is the midpoint if you lined everyone up by income. Half of Americans make less than $31,099 and half make more, with 70 percent of individuals making $50K or less.
Here is the median income sorted by education level:
Median Personal Income by Educational Attainment (2015)
Level of Education Attainment: Less than 9th grade
Median income: $16,267
Level of Education Attainment: 9th to 12th grade, no diploma
Median income: $17,116
Level of Education Attainment: High school graduate
Median income: $25,785
Level of Education Attainment: Some college, no degree
Median income: $30,932
Level of Education Attainment: Associate degree
Median income: $35,072
Level of Education Attainment: Bachelor’s degree or more
Median income: $55,071
Level of Education Attainment: Bachelor’s degree
Median income: $49,804
Level of Education Attainment: Master’s degree
Median income: $61,655
Level of Education Attainment: Professional degree
Median income: $91,538
Level of Education Attainment: Doctorate degree
Median income: $79,231
Source: U.S. Census Bureau, Current Population Survey, 2016 Annual Social and Economic Supplement.
Again, if you’re reading this it’s unlikely that 70 percent of the people you know make $50K or less. Among the college graduate crowd, the average is $55K, with higher averages of $61K and $91K for those with a master’s or professional degree, respectively.
The Bureau of Labor Statistics places the median hourly wage at $17.40, which would mean about 35 hours of paid work per week over 50 weeks. This is consistent with the average of 34.4 hours reported by the OECD. So the average American worker has less than an associate’s degree and makes about $17 per hour.
The last U.S. census mapped 80.1 percent of American people in urban areas and 19.9 percent in rural areas. This is misleading, though; the census classified anything in a metro area, even the most far-flung suburb, as urban. A recent national survey from the online real estate site Trulia found that only 26 percent of people identified their neighborhood as urban, while 53 percent described it as suburban and 21 percent as rural. The consensus view is that about half of Americans live in the suburbs, and that this still represents the most common type of home for most Americans.
Per capita income varies by state and district. In 2016, the District of Columbia had the highest per capita income at $50,567, while Mississippi had the lowest at $22,694. The 25th and 26th ranked states were Ohio and Maine, with an average income of $29,604 and $29,164, respectively. It’s telling that our national capital has the highest income.
You might have seen some of the stories about financial insecurity in the United States. A Bankrate survey in 2017 found that 59 percent of Americans don’t have the savings to pay an unexpected expense of $500 and would need to put it on a credit card, ask for help, or cut back for several months to manage it. A similar Federal Reserve report in 2015 said that 75 percent of Americans could not pay a $400 emergency expense out of their checking or savings accounts.
For average Americans with high school diplomas or some college, the median net worth hovers around $36,000, including home equity—63.7 percent of Americans own their home, down from a high of 69 percent in 2004. However, their net worth goes down to only $9,000–$12,000 if you don’t include home equity, and only $4,000–7,000 if you remove the value of their car.
Median Value of Assets for Households, by Age & Educational Attainment (2013)
Characteristic: Age: Less than 35 years
Net Worth: $ 6,936
Assets at Financial Institutions: $ 2,330
Stocks and Mutual Fund Shares: $ 8,000
Net Worth Excluding Own Home: $ 4,138
Characteristic: Age: 35 to 44 years
Net Worth: $ 45,740
Assets at Financial Institutions: $ 2,800
Stocks and Mutual Fund Shares: $ 16,000
Net Worth Excluding Own Home: $ 18,197
Characteristic: Age: 45 to 54 years
Net Worth: $ 100,404
Assets at Financial Institutions: $ 3,500
Stocks and Mutual Fund Shares: $ 28,000
Net Worth Excluding Own Home: $ 38,626
Characteristic: Age: 55 to 64 years
Net Worth: $ 164,498
Assets at Financial Institutions: $ 4,650
Stocks and Mutual Fund Shares: $ 50,000
Net Worth Excluding Own Home: $ 66,547
Characteristic: Age: 65 years and over
Net Worth: $ 202,950
Assets at Financial Institutions: $ 8,934
Stocks and Mutual Fund Shares: $73,300
Net Worth Excluding Own Home: $ 57,800
Characteristic: Age: 65 to 69 years
Net Worth: $ 193,833
Assets at Financial Institutions: $ 6,749
Stocks and Mutual Fund Shares: $62,000
Net Worth Excluding Own Home: $ 66,168
Characteristic: Age: 70 to 74 years
Net Worth: $ 225,390
Assets at Financial Institutions: $ 9,817
Stocks and Mutual Fund Shares: $ 75,000
Net Worth Excluding Own Home: $ 68,716
Characteristic: Age: 75 and over
Net Worth: $ 197,758
Assets at Financial Institutions: $ 10,001
Stocks and Mutual Fund Shares: $ 78,575
Net Worth Excluding Own Home: $ 46,936
Characteristic: Educational Attainment: No high school
Net Worth: $ 5,038
Assets at Financial Institutions: $ 560
Stocks and Mutual Fund Shares: $ 28,153
Net Worth Excluding Own Home: $ 1,800
Characteristic: Educational Attainment: High school only
Net Worth: $ 36,795
Assets at Financial Institutions: $ 1,500
Stocks and Mutual Fund Shares: $ 20,200
Net Worth Excluding Own Home: $ 9,380
Characteristic: Educational Attainment: Some college
Net Worth: $ 36,729
Assets at Financial Institutions: $ 1,800
Stocks and Mutual Fund Shares: $ 20,500
Net Worth Excluding Own Home: $ 12,119
Characteristic: Educational Attainment: Associate’s degree
Net Worth: $ 66,943
Assets at Financial Institutions: $ 3,000
Stocks and Mutual Fund Shares: $ 21,000
Net Worth Excluding Own Home: $ 22,905
Characteristic: Educational Attainment: Bachelor’s degree
Net Worth: $ 147,578
Assets at Financial Institutions: $ 6,900
Stocks and Mutual Fund Shares: $ 30,000
Net Worth Excluding Own Home: $ 70,300
Characteristic: Educational Attainment: Graduate degree
Net Worth: $ 325,400
Assets at Financial Institutions: $ 15,500
Stocks and Mutual Fund Shares: $ 50,000
Net Worth Excluding Own Home: $ 200,071
Source: U.S. Census Bureau, Survey of Income and Program Participation, 2014 Panel. Wave 1 (available online June 2017).
Unfortunately, the racial disparities are dramatic, with black and Latino households holding dramatically lower assets across the board and whites and Asians literally having 8 to 12 times higher levels of assets on average while owning homes at dramatically higher rates (75 percent and 59 percent for whites and Asians versus 48 percent and 46 percent for Hispanics and blacks).
Median Value of Assets for Households, by Type of Asset Owned & Race (2013)
Race: White alone
Net Worth: $ 103,963
Assets at Financial Institutions: $ 4,600
Stocks and Mutual Fund Shares: $ 35,000
Net Worth Excluding Own Home: $ 34,755
Race: White alone, not Hispanic
Net Worth: $ 132,483
Assets at Financial Institutions: $ 5,500
Stocks and Mutual Fund Shares: $ 37,500
Net Worth Excluding Own Home: $ 51,096
Race: Black alone
Net Worth: $ 9,211
Assets at Financial Institutions: $ 1,000
Stocks and Mutual Fund Shares: $ 9,000
Net Worth Excluding Own Home: $ 2,725
Race: Asian alone
Net Worth: $ 112,250
Assets at Financial Institutions: $ 7,600
Stocks and Mutual Fund Shares: $ 25,000
Net Worth Excluding Own Home: $ 41,507
Race: Other
Net Worth: $ 13,703
Assets at Financial Institutions: $ 1,300
Stocks and Mutual Fund Shares: $ 15,000
Net Worth Excluding Own Home: $ 4,270
Race: Hispanic origin (any race)
Net Worth: $ 12,460
Assets at Financial Institutions: $ 1,380
Stocks and Mutual Fund Shares: $ 10,000
Net Worth Excluding Own Home: $ 5,839
Race: Not of Hispanic origin
Net Worth: $ 99,394
Assets at Financial Institutions: $ 4,500
Stocks and Mutual Fund Shares: $ 34,000
Net Worth Excluding Own Home: $ 33,699
Source: U.S. Census Bureau, Survey of Income and Program Participation, 2014 Panel. Wave 1 (available online June 2017).
The racial statistics make my head and heart hurt.
There are also consistent differences between men and women. Women-led households have 12 percent less wealth than male-led households, and women on average make 20 percent less than men. This is also painful. However, women are pulling ahead of men on the education front—much more on this later.
We tend to use the stock market’s performance as a shorthand indicator of national well-being. However, the median level of stock market investment is close to zero. Only 52 percent of Americans own any stock through a stock mutual fund or a self-directed 401(k) or IRA, and the bottom 80 percent of Americans own only 8 percent of all stocks. Yes, the top 20 percent own 92 percent of stock market holdings. This means that the average American benefits minimally from a rising stock market beyond the wealth effect, which is that the rich people around them spend more money and the economy is more buoyant.
So what’s normal? The normal American did not graduate from college and doesn’t have an associate’s degree. He or she perhaps attended college for one year or graduated from high school. She or he has a net worth of approximately $36K—about $6K excluding home and vehicle equity—and lives paycheck to paycheck. She or he has less than $500 in flexible savings and minimal assets invested in the stock market. These are median statistics, with 50 percent of Americans below these levels.
If you’re reading this, this probably doesn’t describe your life or those of your friends and family. It may be shocking to you that this is statistically totally normal. It’s only somewhat less surprising to me because of my travel and work these past years.
When jobs start to disappear in large numbers due to technological advances, the normal American won’t have much to fall back on.