Have you ever been curious about your income level, and how it compares on a broader scale? I certainly have. During my career, I've been in the situation of recruiting and offering two people a role in the same team: that is, they were being offered similar responsibilities for the same salary. One saw the offer as pleasant surprise; the other felt the offer was not enough. Their response to the offer was a reflection of previous salaries, their perception of what the role was worth, along with their sense of their professional value to the market.
I recently came across a document prepared by NATSEM, an economic and social research centre within the University of Canberra. Based on family structure, their research identifies what constitutes low/medium/high income tiers within Australia, based on the family structure of the household - see the table below. Importantly, this information relates to after tax income and excludes households where the head of the household is over 65.
According to NATSEC's research, a single person, earning $43,100 can be described as the median middle-income earner. Instinctively, this sounds quite low - however I'm reminded of the friend I wrote about recently. Whilst she would fall somewhere between the 20th and 33rd percentile in this table, she is one of the wealthiest women I know. Her lifestyle is in synch with her income (ie she closely manages her expenses and lives within her means); she works towards and consistently reaches a series of travel related and material goals (ie, she builds her savings); and she maintains a long term wealth management strategy to ensure she'll be comfortable in her retirement.
Conversely, we have worked with people who are in the top 5% of income earners, and yet they are poor, and will be poor until they have eliminated their debt, learned to manage their expenses and commenced genuine saving.
Without being flippant, and certainly excluding people whose income places them in a 'poverty' situation, there are many, many examples where personal security and wealth does not reflect income, but with personal responsibility and activities associated with managing income.
It's important to note that NATSEM's paper 'Working Australia: What the Government Gives and Takes Away' looks at the impact government benefits have on a range of household income structures as well as incentives to increase workforce participation.