From seacoastnh.com, Why Writers Starve:

The average writer’s annual income falls closer to $7,000. I’ve never tracked down the origin of that often-quoted estimate, but it sounds right. A first-time science fiction or mystery writer is considered lucky to get an advance of two to five thousand dollars…

…This is how it works. The author earns roughly a tenth-of what the publisher makes and the publisher takes in about half of the cover price. The book distributor gets a chunk, as much as twice the author’s income. The bigger chunk goes to the book seller, minus whatever discounts the bookstore offers in order to compete with chain stores and online sales. I once wrote a small book and was paid $1,500. A single local bookstore owner sold 800 copies of that book, for an income of $8,000…

…A typical $20 regional history book printed in an edition of 2,000 — if it sells completely out — nets the author a cool $2,000. Not exactly a windfall for a year’s worth of writing.

It seems like a compelling argument for self-publishing your books. But publishing is a tough business too:

The publisher, who makes the lion’s share, seems like the natural enemy, but the publisher takes all the risk. He or she invests in the project and takes the hit if the book falls flat. The publisher pays for the editing and proofing, the book design and printing, the marketing and warehousing of all those copies. It’s the publisher who gets kicked around by the distributors and the retailers who, in turn, are competing with the super-discount rates on Amazon.com.