Here's how I would calculate it. See if you agree:
1. The total publishing industry size in the country is $26 Billion.
2. 43.8% of the industry is fiction (22.9% for Fiction Mystery and 20.9% for Fiction Romance). So 26 Billion*43.8%=$11.39 Billion fiction.
3. Let's say 2% of all fiction is short stories (and 98% novels). Then total short stories would be 11.39*2%=$230 million.
4. Let's say again a short story writer makes on average $5000 per year, that means there are 230 Million/5000=46,000 short story writers in the country?
Sounds about right?
All those numbers are way, way off the mark. All of them. Nor can you calculate how many writers are doing what by using numbers like this, even if you had them all correct.
The truth is, short stories have never been as popular as many believe. There used to be a lot more short story magazines, but most of them paid very little, and such magazines started and folded on a regular basis.
But there is a decent market for certain types of short stories, particularly literary, ASF, and fantasy stories.
As far as I know, there isn't a writer out there who actually make s aliving writing short stories, though, in fairness, part of the reason this is true is because there's more money in novels. If you can write short stories well, the temptation is always to move into the novel market.
This is a good thing for new writers. Editors lose good writers constantly because they stop writing short stories on a regular basis, and spend all their time writing novels, of screenplays, or articles, or you name it.
Most short story markets do not pay very well. Pro rate for SF and fantasy magazine sin only a nickel per word. Several do pay a little more, but it's tough to find genre markets that pay more than a dime per word, and seven to nine cents is more like it. Most literary magazines pay even less.
A few mainstream, literary, and even outdoor magazines, do pay quite a bit. The most I've ever been paid for a short story was $2,000. I'd also sold a fair number at $800-$1,200. But the majority have been in the $250-$400 range.
This doesn't, or course, tell the whole story. One a magazine publishes a story, and once you've used any available paying reprint markets, you can then publish the story on Kindle or other such sources.
But there is no market with competition as stiff as the short story market, unless it's the screenplay market. There are millions and millions of would be short story writers, and you competition at any decent paying market includes the best and most successful short story writers the world has to offer.
Averages really have no meaning, and I wish people would stop using them, but I can guarantee the average short story writer makes nowhere near five thousand per year. The vast majority of short story writer make nothing, and even most selling short story writers earn, if they're lucky, a few hundred dollars per year.
The Kindle route isn't any better. I know one BIG NAME mystery writer who told me he's lucky if a story earns more than two or three hundred dollars, or if a collection ever reaches the thousand dollar mark.
If you want to make any money from short stories, you have to be very, very good at writing them, you must know the markets, and you must be prolific. You can't take several weeks, or even months, writing a short story, and still expect to make any money. Or even to write well enough to sell them at all.
In fairness, if you're good enough to it the top market in your genre or three, and if you can write good stories pretty darned fast, it is possible to make a decent amount of money. I know from experience that I can, if I devote myself only to short stories, earn close to thirty thousand in a year. But even by selling to all the top markets that I have sold to, I still have to sell a bunch of $250-$350 stories, and the last year I actually write short stories full-time, I was writing and submitting a story per week.
I don't think any genre writer is going to make this kind of money selling short stories. Nor, I think, would any literary writer. Even earning five thousand per year in genre writing would mean selling more than fifty thousand words of fiction to the best genre markets out there.
I believe writers should only write short stories because they love reading and writing short stories. Very few will ever make any money by writing short stories, and even if you can sell most of what you write, I doubt you'll ever hit anywhere close to five thousand dollars by writing genre or literary fiction.