What Is the Average Income in Los Angeles?

Understanding income data is a fundamental step in comprehending the economic landscape of any region. For a large and diverse metropolitan area like Los Angeles, analyzing income figures provides insights into economic well-being and the distribution of wealth among its residents. This information is valuable for understanding the local economy and for broader economic analysis.

Defining Income Measures

To properly interpret financial data, it is important to distinguish between different ways income is measured. “Mean income,” often referred to as average income, is calculated by summing all incomes and dividing by the number of income earners or households. This measure can be influenced significantly by a few very high incomes, potentially skewing the perception of typical earnings. In contrast, “median income” represents the middle point in an ordered list of incomes, meaning half of the incomes are above this figure and half are below it. This provides a more representative view of typical earnings by mitigating the effect of extreme outliers.

Income data is typically categorized as either “household income” or “individual income.” Household income includes the combined earnings of all individuals aged 15 and older within a single housing unit, encompassing wages, salaries, self-employment income, investments, and various other forms of pre-tax income. Individual income, on the other hand, refers solely to the earnings of a single person. These statistics are primarily compiled and disseminated by federal agencies such as the U.S. Census Bureau and the Bureau of Labor Statistics, drawing from surveys like the American Community Survey.

Los Angeles Income Statistics

For the City of Los Angeles, the average annual household income was approximately $122,610 in 2023. The median household income for the city stood at about $80,366 during the same year. When considering individual earnings, the median individual salary in the City of Los Angeles was reported to be around $56,769 annually. The average individual salary for the city was higher, at approximately $87,498 per year. For the broader Los Angeles County, the median household income in 2023 was estimated at $87,760.

Key Factors Shaping Income

Income levels in a large urban center like Los Angeles are influenced by a combination of broad economic forces. The presence of diverse and high-paying industries significantly impacts the overall income landscape. Los Angeles is known for its strong sectors in entertainment, technology, international trade, and healthcare, which often provide a range of employment opportunities across various skill levels. The concentration of these industries can contribute to higher average incomes compared to regions with fewer high-value sectors.

Educational attainment across the workforce also plays a substantial role in shaping income distribution. Areas with a higher proportion of residents holding advanced degrees or specialized vocational training often exhibit higher median incomes due to increased earning potential in skilled professions. The dynamic economic environment, characterized by entrepreneurial activity and a large, competitive labor market, also contributes to the variance in income levels.

Interpreting Income in Los Angeles

Understanding the meaning of average income in Los Angeles requires considering the local economic environment. The reported income figures indicate the general financial standing of households and individuals within the city. These income levels reflect the purchasing power residents might experience within Los Angeles. While specific expenses are not the focus, the income figures provide a benchmark for how typical earnings might align with the prevailing economic conditions of the area. Comparing these local figures to national averages can offer a broader perspective on the relative economic position of Los Angeles residents.