What’s the average income at this BBQ?
Ten neighbors have ordinary incomes. Then a guest earning $50 million a year shows up.
No one else at the BBQ got richer. Only the summary changed.
The mean jumped from $86,400 to $4,600,000. The median barely moved, from $80,500 to $87,000.
It happens with real incomes too: since 1990, mean U.S. household income has grown more than twice as fast as the median. The same goes for home prices, salaries, and wait times: a single extreme value can drag the mean far from what's typical. When an "average" could be hiding outliers, it's worth asking whether it's a mean or a median.
When you hear an “average,” how would you know if one outlier is behind it?
Mean or median?
The mean uses every value, so an extreme value can move it dramatically. The median is the middle value, so it is much less sensitive to a single outlier. Neither is automatically better: the useful measure depends on the question.
The same distortion shows up whenever a chart or number gets to pick its own scale: an axis that doesn't start at zero can make a small gap look enormous, the same way one outlier can make an average look typical. Ask what is being included, and starting from where, before trusting either kind of number.
Does this happen with real U.S. incomes?
Yes, on a national scale. When a headline says “average household income,” it almost always means the mean, which was about $121,000 in 2025. The household in the exact middle made about $83,600, and the gap between the two has been widening for 35 years.
U.S. household income: mean vs. median
In 2025 dollars (adjusted for inflation)
The mean has no ceiling. It's total income divided by every household, so each very high earner pulls it up, and a single $10 million household moves it far more than it moves the median. The median only tracks the household in the exact middle, and it changes only when incomes near the middle change. When income growth is concentrated at the top, as it has been in the U.S. for decades, the mean rises faster than the median, and the space between the two lines shows how concentrated that growth has been.
Inflation makes the gap look even bigger than it is. In nominal dollars, the gap grew from about $6,800 to $37,400, more than five times over. But a 1990 dollar bought far more than a 2025 dollar. In today's dollars the 1990 gap was about $17,200, so it roughly doubled rather than growing fivefold. The ratio between the two (1.24× to 1.45×) is unaffected by inflation, and it rose at every point on the chart.
Why it matters: reports of "average income," "average wealth," or "average pay raises" usually quote the mean, which can climb sharply even when most people's circumstances barely move. After inflation, the typical household's income rose 15% over these 35 years, and the real median was lower in 2015 than it was in 2000, even as the mean kept climbing.
See the U.S. income numbers by year
| Year | Median | Mean | Gap | Mean ÷ median |
|---|
Related exhibits
Sources: BBQ example incomes are invented; the arithmetic is exact. U.S. household income: DQYDJ, "Household Income by Year" (mean and median U.S. household income, nominal and in 2025 dollars), compiled from U.S. Census Bureau Current Population Survey Annual Social and Economic Supplement (CPS ASEC) microdata via IPUMS CPS, University of Minnesota. Years are survey years; each figure describes income earned in the previous calendar year. U.S. Census Bureau, "Income in the United States: 2024" (P60-286), used as a cross-check on the median.