How does one calculate the “average median”? 
Pretty much. There are definitely class markers beyond income, but we don’t really have the language to talk about them.
Pew somewhat arbitrarily* defines middle class as making between 2/3rds and twice the median household income, adjusted for household size. A common household size adjustment is to divide income by the square root of the number in the household. E.g. two people each making $50k who marry now are counted as $100k/1.44 = $69k.
You can then adjust for local cost of living, although the granularity is again arbitrary*. Most nobody has to live in Manhattan, so where do you draw the boundary? Metro area is common.
You can also adjust for government taxes and transfers, although I don’t recall if Pew does that.
*Any method will be arbitrary.
We live in the suburbs near St. Louis. We each have six figure incomes, with our combined incomes putting us in the top 1 or 2 percent of US household incomes, depending on our performance incentives.
Getting back to the definition question, I agree with Ruken that any method will be arbitrary. If I were asked to split the US into three classes, the lazy person in me would just split them into equal thirds, which would put the start of the “upper class” at about $81K. Again, it depends on other assets.
To give more detail than in the OP, to explain why it’s something I’m thinking about:
Medicare has a monthly surcharge for people who are considered to be “higher income” (the Income-Related Monthly Adjustment Amount (IRMAA)). That surcharge starts at $85,000 for a person who files their taxes as “single.” Every time I see this, I think that threshold seems really low to call someone higher income, but it only catches about 6% of people with Medicare. There have been proposals to put this surcharge on 25% of people with Medicare, which would lower this threshold to around $45,000.
So that made me wonder whether people generally think “middle class” includes $85,000/year for a single person. Would lowering the threshold to 45,000 cause this to affect the middle class or extend the already existing effect on the middle class?
Considering that wealthy is ridiculous for my area.
That is sort of the issue - people who make due on $30k a year (or $13k) don’t tend to recognize that the amount of money it takes to go from a very basic lifestyle to one that involves things like first class travel is quite a bit more than they think it is. “Wealthy” as a lifestyle includes more than one part of the package of “wealthy” as a lifestyle.
Which is how you end up with an America where the vast majority of people are “middle class” Because if you can pay your bills, but have to work to do so, you are middle class - but your bills can be a small apartment in rural Kansas with a really low cost of living managing to save nothing for retirement, or a apartment big enough for two kids in NYC while saving for their college educations.
Here’s the Pew piece I was remembering:
They have a calculator here that let’s you examine different metro areas, I’m assuming with more up-to-date income data and the same methodology:
For a single person I’d say yes, $85K is middle class almost everywhere in America. Definitely in the expensive areas, and the moderate-to-cheap areas I’d say so too: however, in the places with the cheapest cost of living I’d say it is on the border between middle and upper-middle class since they could afford the trappings of an upper-middle class lifestyle: a good, paid-for home, a non-entry-level car, good food, and as many vacations as their job will let them take. It wouldn’t let them fly first-class but even most multi-millionaires don’t fly first class all the time, especially if someone else isn’t paying for it.
One of the other issues is that by defining class by income, people who have highly variable incomes can see their class change from year to year. If you own a business, if you are self employed, if you end up with a period of illness, or if you are in a profession where you can be out of work for a year at a time, you need to run your good years in such a way that cover your bad years. I grew up in a house where my Dad made most of his money in commission sales - it was feast or famine. There were years when we were much better off than other years.
If you’ve been out of work for a while and have amassed a bunch of debt to keep living - you could get a six figure a year job and take a year or two to dig out. If you graduate from law school with $200,000 in debt, your Associate job is not going to make you wealthy in year one - or year four.
The other issue with defining it by income is that you aren’t looking at net worth. I have a friend who is a heir to one of the wealthiest men of the late 19th century. There isn’t a ton of money left in his branch, but he lives a middle class lifestyle and doesn’t bother to hold a real job. He is spending down the principle in order to do it.
One could use a trailing average if desired. And yes, income and wealth certainly overlap incompletely.
Or maybe a weighted trailing average. Given that my income this past year has more impact on my standard of living today than my income five years ago.
In general usage, not really, but many people in this thread have hinted at socioeconomic status (sometime also called socioeconomic class) which is a way of talking about class and acknowledging that income alone doesn’t account for the class divisions that we see in America.
A classic example is a college student from a wealthy family - sure, they make $14,000/yr working part-time, but the balance of their education is paid for either by their family or by loans guaranteed by their family, and the expectation is that they’ll become a cosmetic proctologist in twelve years making $693,956/yr - was the student “poor” when they were 19? Maybe/maybe not, but their socioeconomic status was still high.
SES is much more robust than income as a measure of class, but the language around it is not in much general usage, a good example of that is the reason I didn’t link to the socioeconomic status wikipedia page earlier, because it sucks.
How much is rent though? I suppose if you live on the outskirts of town rent may only be 1k or so a month in Chicago for a reasonably safe neighborhood. That is affordable, but if the rent is 2k a month, then you really can’t afford that on 40k a year.
Again, I think it depends on where you live. If you want to live downtown in a high cost of living area, 40k isn’t nearly enough. But if you are willing to live with a roommate, or willing to live on the outskirts of town and commute to work it should be enough.
Other than rent, is anything else other than rent more expensive in a high cost of living area? Groceries and utilities should be the same price. Parking costs extra in many places though.
There are some people you just can’t categorize by income alone. Small business owners, farmers, creative types (actors, artists, writers, etc.)
Another definition of middle-class is “wage earner.” Let’s say you make $200,000/yr. But it’s all from a salary. A lot of people would describe that as upper middle class. (And one corporate buyout could result in your being unemployed.) But if you’re clearing $200,000/yr. from real estate investments, people are a lot more likely to call you rich.
And on the other side basically nowhere where it makes you rich. Certain neighborhoods maybe but not in general geographic regions.
The other gauge, lifetime earnings, has gone up quite a bit the last couple decades as well. Thirty years ago the target was a million dollars over your life for the better/upper range of middle class to lower end rich; these days its more in the multiples.
Can Mexicans be middle class?
Maybe it’s middle class, but does it feel middle class? Class is a bit of a fuzzy concept, especially if we are talking about the United States.
Middle class range for household income in middle income nations like Mexico is about 15-40k a year. That is for a family though, no idea about a single person.
I know some retirees from America have moved to Mexico and claim to live quite comfortably on $1000 a month.
I think regardless of where he lives $85k a year is going to be middle class. Even if he lives in New York or California he’s still going to be middle class.
Really, the biggest thing is, what does James think…does he think he’s middle class? I make about this and I consider myself solidly middle class, and from what I’ve seen people making even double this also consider themselves middle class. As do people making half as much. It’s all about perception, since there is no rigorous definition of what ‘middle class’ is, exactly.