The question asked by Nina Strohminger to her students at the Wharton School at the University of Pennsylvania was straightforward: What did they think the average American makes in annual wages?
Some of the answers, however, were not what the professor of legal studies and business ethics could have expected from one of America’s most prestigious business schools, she said.
“I asked Wharton students what they thought the average American worker makes per year and 25% of them thought it was over six figures,” she tweeted late Wednesday. “One of them thought it was $800k.”
As she estimates the real answer is around $45,000 a year, Strohminger has a hard time wrapping her head around what some Wharton students believed was an average wage.
“Really not sure what to make of this,” she wrote.
Neither did the internet.
Strohminger’s tweet set off a range of reactions from experts and observers wondering if this classroom interaction accurately reflected what future business leaders think about the state of wages in the United States.
“People tend to believe that the typical person is closer to themselves financially than what it is in reality,” Ken Jacobs, the chair of the University of California at Berkeley’s Center for Labor Research and Education, told The Washington Post. “It is an odd notion in America that people think of $200,000 or $100,000 as a typical wage when it is quite a bit above.”
Others took the chance to compare the Wharton students who think the average American makes more than $100,000 to Lucille Bluth, the “Arrested Development” character played by the late Jessica Walter, who once guessed that a banana costs $10.
“Not shocking if it were, say, middle school students,” tweeted journalist Soledad O’Brien. “But Wharton?”
Neither Strohminger nor a Wharton spokesperson immediately responded to requests for comment on Thursday.
According to the Social Security Administration, the average U.S. annual wage last year actually was $53,383, with the median wage at $34,612. The Labor Department reported that median weekly earnings in the fourth quarter of last year were $1,010, which comes out to an annual wage of $52,520, according to MarketWatch.
The debate comes as the latest surge of coronavirus cases from the highly-transmissible omicron variant has exacerbated the country’s persistent labor shortages and potentially complicated the labor market’s push toward pre-pandemic employment levels. Approximately 8.8 million workers reported not working between Dec. 29 and Jan. 10 because they were infected with covid-19 or caring for someone who had the virus, according to data from the Census Bureau.
There’s also the concern surrounding rising inflation and the direct impact it has on Americans’ wallets. While wages are rising, unemployment is low and the stock market is healthy, 2021 was the worst year for inflation since 1982, according to a report released by the Bureau of Labor Statistics last week. Inflation, which is driven in part by supply chain issues and shortages overseas, is wiping out wage gains made by many workers last year, and has caused prices to increase 7 percent over the 12-month period that ended in December.
The question surrounding what is considered middle-class in America has popped up in recent years. A majority of Americans consider themselves to be middle-class, but many are still having a hard time figuring out what it means. The Post calculated in 2017 that the country’s middle-class ranges from $35,000 to $122,500 in annual income.
“The bottom line is: $100,000 is on the middle-class spectrum, but barely,” The Post’s Heather Long wrote at the time. “75 percent of U.S. households make less than that.”
Among the thousands who responded to the Wharton tweet was Stefanie Stantcheva, a professor of economics at Harvard University. Stantcheva co-authored a paper in 2020 that looked at how well people understand their social position relative to others in society. One of her findings, she tweeted, was “what you think others make very much depends on your own income.”
“Lower income people think everyone else is lower income too,” she wrote. “Rich people think everyone else is richer too.”
Jacobs told The Post that an American pretense about how there are not major differences in class has helped fuel misconceptions, like the ones from the Wharton students. He noted that some people “way overestimate the ability for financial mobility in the United States.”
“Where this becomes a problem is that people in the spaces that have more political power have a skewed understanding of the typical person, based on their own set of social relations,” he said. “That can lead to policy outcomes that perpetuate the current inequalities that we have.”
Many on social media agreed, with some saying that the Wharton students who think people make a six-digit salary believe “the average American is an investment banker at Deutsche Bank.” One of them was Brady Quirk-Garvan, who works in asset management and financial planning in South Carolina.
“Remember those setting economic policy are more likely to be Wharton (or similar) grads than have worked multiple minimum-wage jobs,” Quirk-Garvan wrote.
The Wharton School was ranked as the second-best business school in the nation this year by U.S. News and World Report. Tuition for the school is about $80,000 a year. Some critics noted how the average annual income for those living in West Philadelphia, where Wharton is located, was reportedly around $34,000.
James Martin, a Jesuit priest who is a Wharton alum, tweeted that he was not surprised about the Wharton professor’s message, saying “there was a relentless focus on the bottom line, and zero encouragement in understanding the poor” when he was in school. He reflected on a time when he was invited to speak at the school about vocation and how some students told him “they had never been encouraged to think about what they might be called to do, or how to contribute to the common good, but only how to land the highest-paying job.”
“I’m a capitalist (yes), but capitalism isn’t perfect,” wrote Martin, who is also an editor-at-large at America magazine. “One of its many flaws lies in its inability not only to factor in the need to care [for] the ‘least among us,’ but also its built-in propensity to enable the privileged to avoid contact with their brothers and sisters in need.”
On Thursday morning, Strohminger awoke and realized her tweet was the top trending topic on Twitter. She explained she had asked students the question about average wages because she wanted to see if they were as biased as other people had been in previous studies on the topic.
But she stopped short of saying the beliefs that a few students have on average wages in the U.S. reflects on them as a whole.
“A lot of people want to conclude that this says something special about Wharton students – I’m not sure it does,” she wrote. “People are notoriously bad at making this kind of estimate, thinking the gap between rich and poor is smaller than it is.”
Eli Rosenberg contributed to this report.