Prof. asks Wharton students what the average American makes - they thought it was 800k

[tenderfoot]

I asked Wharton students what they thought the average American worker makes per year and 25% of them thought it was over six figures. One of them thought it was $800k. Really not sure what to make of this (The real number is $45k)

Link to tweet

I guess that's how much their parents made, so they assumed.

[orleans]

1. wow k&r nt

[spooky3]

2. I think she's incorrect--the median pay is less than $40k

Per worker. The one outlier obviously didn’t take it seriously. 75% of them were in the ballpark, but how far above were they? The text is misleading.

[MissMillie]

13. "median" and "average" are not the same thing (n/t)

.

[spooky3]

17. I'm aware of that (actually the term is "mean") but typically

In order not to be misleading, the median is used as the measure of central tendency for pay. And it would better support her point.

[MissMillie]

19. I don't know that median does support the point more effectively

I'm betting that far more people make less than the median than make more than the median. Let's face it, the median is pretty high if someone makes a couple of million in a year. Whereas using the mean (or average) would drop that number significantly.

[Celerity]

23. You have it exactly backwards.

I'm betting that far more people make less than the median than make more than the median.

Whereas using the mean (or average) would drop that number significantly.

You do realise that the MEDIAN literally means the number that has HALF above and HALF below???

so if you are talking 150,000,001 workers

the median wage has 75 million who make less or the same and 75 million who make more or the same as that one worker who represents the median

The AVERAGE is what is artificially skewed upward by the ultra high earners.

The median is a far better measurement of pay for a nation state.

[ProfessorGAC]

26. Saved Me The Typing

Economists almost never use mean income.
Median is preferred by a light year.

[Celerity]

30. +1

[uponit7771]

33. yep

[MissMillie]

31. I am thinking of this incorrectly

I was thinking that the median was the number that was the middle of the lowest and the highest--rather than the number where just as many are above than are below.


Thanks. Looks like I need another cup of coffee.

[mathematic]

27. Census.gov says median over 60k for full time workers and 46k for any workers

I'm guessing the $45k is any worker and not the most recent data.

Where are you getting less than 40k?

Edit: Mean pay for full time worker was over 80k. So if you're being charitable and say that 800 was a typo then that student was actually right about the question, as asked (with the ambiguous term "average&quot .

[brush]

3. Isn't Wharton the elite business school that's so hard to get into?

This doesn't say much for those students...seems to be so many rich kids out of touch with the real world

[JI7]

5. It's one of those overpriced things which are mostly used for bragging purposes

[DFW]

11. Not really. You don't get in to Wharton. You get into Penn and select a business major

I went to Penn. Wharton is just another division of it, like it‘s famous med school or it‘s anthropology dept.

To graduate from Penn, you must have 3 semesters each in humanities, natural sciences and social sciences, no matter what your major is. For my three social sciences, I chose Linguistics, Anthropology and Economics. The Economics course was taught in the Wharton building. My professor was a long-haired guy named Bill Whitney. He said, „please do not address me as Professor. That is my job, not my name. My name is Bill. Please call me Bill.“ The course was attended by a combination of business majors and kids like me, fulfilling their social science requirement. Not a one of them seemed to be under any illusion that most people made outlandish incomes. Indeed, even if the article is true (and having studied there, myself, I doubt it), from its own cited statistics, it could have just as easily been headlined, „Three quarters of Wharton students are under no illusions as to what people earn in the USA.“ But that isn‘t nearly as eye-catching, I guess.

[CrackityJones75]

16. Huh?

ok so 3/4 of the students aren’t completely out of touch. That doesn’t mean that the statistic 25% of the students having no idea what the average American makes isn’t a fairly shocking number.

[DFW]

40. It would indeed be shocking, but only if the statistic is correct.

When I was there, I never met even one student that was anywhere near that far out of touch, and that was during the Nixon years. If the one "$800K" student--and note the headline tried to make it sound like they all thought that-- was a Saudi prince or the son of the Sultan of Brunei, I can almost imagine it, but it still sounds far-fetched. I really doubt I could return to campus and find THAT many students THAT far removed from reality.

Even if you take the grad school (MBA) class of last year, which was about 900 students, don't try to tell me that 225 of them really believe the average American makes six figures. Even after the one course I took there, it is clear that they drown you in solid statistics before you can even pass Econ I. West Philadelphia is not exactly in Bhutan, either. The real world of America is all around you: you don't get to live in a bubble. I don't hang around there any more, but I don't imagine their admissions committee has changed their standards to look for 25% privileged idiots. Even if they had, the professors would fail those students' asses outta there before Thanksgiving break of their first semester.

[CrackityJones75]

42. Your experience 60ish years ago doesnt mean a whole lot today

I mean think about the changes on out world during that timeframe.

Now that isn’t to say that the headline isn’t trying to grab attention…. But as far as that goes, alert the news media… They’ve been doing that forever.

[DFW]

44. Actually, it does

First of all, it was more like 48ish years ago, and the school is an old, established institution that doesn't radically change its model of admissions or its curriculum. This is not some private manufacturing corporation that needs to adapt to some market that demands an ever-changing line of products. I often meet students currently attending the school (Penn as a whole, not just Wharton). They aren't some new, evolved species. My daughters went to school in the USA, too, though not to Penn. Their English was fluent by then, and they weren't some exotic species, and neither were their classmates. The basics of economics are pretty much the same. Such schools will often still give special consideration to the occasional celebrity admission in the hope of attracting big alumni endowments (Trump at Wharton, Bush at Harvard Biz, e.g.), but those are individual exceptions, not even single digit percentages. Even the International School of Berne does not loudly tout its most famous current alumnus, nor does he publicly claim it to have been his guiding light.

[brush]

45. In the Nixon years there were no billionaires as there are now...

and who are regularly in the news, flaunting their billions with out-sized exploits like blasting off into space. Such displays of massive wealth as if it's not unusual, after all a billion is a thousand million, can influence what some students not yet in the working world assume what people make. And it's not a secret that many people do make six figures

And back in the Nixon years John D. Rockefeller, who didn't quite become a billionaire, was still considered the richest man ever.

[DFW]

49. There is a reason JD Rockefeller was and still is considered the richest man ever

In 2019, the following reference was published: "With a peak net worth of approximately US$418 billion in 2019 dollars, American oil magnate John D. Rockefeller is the richest person in American history......" Inflation and purchasing power must be taken into consideration when gauging these astronomical numbers. Nixon became president in 1968.

If technology would have permitted it, you can be sure the richest people of the times WOULD have been blasting off into space.

I am somewhat confused by your reference to John D. Rockefeller and the Nixon years. JD Senior died in 1937 with a net worth of $1.4 billion, and JD Junior died in 1960. Nixon was in office from 1969 to 1974. We must be working with different references?

[brush]

51. I was referring to J D Rockefeller. I didn't know he had reached billionaire status.

Back then he was considered the richest man ever even though he had died in '37. I read that he was worth 900 million, not quite a billion (his son would not have been as rich as he had siblings who also inherited money from the old man). Considering inflation, would the old man Rockefeller still be richer than Bezos, Musk, Branson and the like?

But about the students, since thousands make six figures today, it's not a surprise that some students think a six figure salary is common.

[JI7]

4. I get criticized anytime I say this but Business Schools/Degrees are mostly useless

I'm not surprised by this at all.

[MissMillie]

32. I used to work at a very prestigious business school

(no, not as an instructor)

The students are mostly paying for access to recruiters from top-paying businesses.

[DFW]

50. I have no basis of reference on that point, except

I notice that many famous graduates of famous business schools did NOT become successful, respected people in the world of business. GW Bush for one. Even Trump never seemed to get anything done in a manner that garnered any respect. Lying and welching on huge debts is not a tactic that has ever required an MBA, to my knowledge!

[Ford_Prefect]

6. To some extent the schools cannot control the quality of person or judgement used

by them. High academic standards do not guarantee informed students as much as those with sharpened academic skills.

Schools of Business long ago lost credibility for producing "smart people" having replaced them with tools of a certain professional efficiency who are then fed into an industry with very doubtful moral values. Rather like the study of Law in that regard. (See: The People v. Kavanaugh)

It is usually up to the university at large to challenge their thinking. Which is where RW conservative organizations like The Federalist Society, and The John Locke Society get into the act.

[SeattleVet]

7. Unfortunately, way too may people do make six figures...

but you have to remember that this is arrived at by also counting the two figures to the right of the decimal place.

[Dark n Stormy Knight]

8. Wow!

That suggests an amazing level of privelege.

[malaise]

9. or ignorance n/t

[Dark n Stormy Knight]

10. I don't know how anyone but the highly priveleged can be ignorant

of the fact that most people don't make anywhere near six figures.

[DFW]

12. Be careful how the headline is worded

It is intended to provoke. Even if the article is to be believed, only ONE student thought Americans made $800k, and only a quarter thought that average Americans made six figures. In other words, probably three quarters of Wharton students DID know what the real world was like.

As a matter of fact I went to the University of Pennsylvania, of which Wharton is the business faculty. I even took one course at Wharton, since that is where Economics is taught at Penn. I never ran into anyone there who was that divorced from reality. Since I was a humanities major, it was the only course I actually took at Wharton, but one of the outdoor cafés on campus (when the rain stopped, that is!) was right in front of the Wharton building, so I ran into enough biz majors and grad students while I was there.

[sl8]

18. Exactly.

I'll go a step further - one student answered $800k. We don't know why they answered that. Maybe that's what that student believed, maybe not.

[fescuerescue]

20. right 3/4 does what the world really is

I mean for college students at an elite school, that's actually higher than I would have guessed.

As for the one outlier.

Maybe the student did think that. Or maybe wasn't close enough attention and answered a different question.

An alternate headline could have been "The vast majority of Wharton students understand the income challenges of average Americans".

But that probably wouldn't have gotten any attention.

[ProfessorGAC]

29. Was The Question Written Or Verbal?

That one student could have inadvertently typed one extra zero, if this were a digitally asked question.

[dumbcat]

22. Yep, and somehow that ONE student

became "they" in the headline. Intentionally misleading.

[malaise]

38. Good point

By the way it's time for you to rework The Party's Over for the SLobfather

[DFW]

41. I'll look into that! In the meantime, how's this?

[malaise]

43. He was the thief with the steal

That's great

[greenjar_01]

14. Singular "they"

[WhiskeyGrinder]

15. Sounds like a good opportunity for learning, which is what college is all about, apparently.

[hlthe2b]

21. I can't laugh at this. It is nauseating, if true

(it is somewhat possible the actual numbers of students stating this are small, or they were "BS-ing" the person asking).

[peggysue2]

24. LOL!!

Although it's sad bc it means these students do not read, are unaware of the community around them and/or come from a blinkered richy-rich life.

At Wharton, no less, where the student body is considered well above average academically. With the exception of the DT types, that is.

[Deminpenn]

25. Income percentile calculator

An interesting calculator tool: https://dqydj.com/income-percentile-calculator/

[MineralMan]

28. Only one thought it was $800K.

That's important. They all pretty much overestimated the number, but only one went that high.

[sl8]

34. From the information given, we don't even know that most overestimated.

I suspect you're correct, but from the information given, we only know that at least 25% of the students overestimated. We don't know the distribution of the remaining 75%.

[MineralMan]

35. Yes. We don't have the actual numbers, so it's impossible to say

how well those students predicted. So, in short, the post was pretty much useless. Oh, well...

[DeeNice]

36. Thank you.

[Celerity]

39. In October 2021, the average hourly earnings of all employees in the United States was at 11.19 USD

https://www.statista.com/statistics/216259/monthly-real-average-hourly-earnings-for-all-employees-in-the-us/

In October 2021, the average hourly earnings of all employees in the United States was at 11.19 U.S. dollars. The data have been seasonally adjusted. The deflators used for constant-dollar earnings shown here come from the Consumer Price Indexes Programs. The Consumer Price Index for All Urban Employees (CPI-U) is used to deflate the data for all employees.

[lpbk2713]

46. They are really out of touch.

And that's a damn shame.

[madville]

47. Lots of professions have broken into the six figure range

Breaking the 100k six figure ceiling is not the magic number it once was, especially depending on location. I know electricians, welders, law enforcement, utility workers, nurses, military members, etc that are all in the six figures now. The perception that the middle class is the “average” American family also affects the answer. In some areas of the country an “average” family, both parents working, one for the electric utility as a lineman and the other is a RN, they could easily have a household income of $200k+. In high COL areas they could easily be over $250-300k a year.

[Yo_Mama_Been_Loggin]

48. Talk about leading a sheltered life