From Mark Perry, here is an interesting graphic on what factors underlie household income inequality.
It’s not just that higher income households have higher income earners, although that’s part of it, too. They also have more workers per household than lower income households. That’s not surprising, really, since so many lower income households are headed by single parents, which is also shown in the graph. (The increase in single parent households, by the way, is one of the causes of stagnating household incomes.) But it highlights the problem with a comment I frequently hear, which is that a single parent can’t run a household on minimum wage. Of course s/he can’t. So maybe the wise thing to do is to not try, but collaborate with another single-parent to have a multi-wage, instead of single-wage, household? (The answer: Because when you do that you’re Southern California Latinos and the gringos will pass laws limiting how many people can live in the household.)
Note also the education effect. Even if college education is primarily about signaling, rather than learning, it still tends to pay off.
So what’s the secret to doing well financially? Get an education, get married, and stay married. Hopefully the marriage is utility-enhancing in itself, too, so you don’t have to calculate the opportunity costs of material well-being vs. psychic well-being.