You can find places for a grand. We rent out our one bedroom condo in the University of Chicago neighborhood (Hyde Park) for $950/month. It’s about 800 square feet. In my neighborgood where I liv now, you can find rentals in the $600-$700 range. We rent out our entire old house for $1200/mo. Two beds, garage, yard, two floors, basement, etc. It’s a non-descript family neighborhood, but only about 25-30 from the loop by the El.
But, yeah, if you want to live in the Loop or Wicker Park, that’d be more difficult to do. Luckily, I never wanted to live in either of those areas. When I was single and making that amount in my late 20s, I was sharing a house ($500/mo) and had way more money than I knew what to do with, earning something closer to $35k.
Unless qualified (“middle-class values”), in the U.S. it is pretty much about economics.
Other things than pure income matter: If Joe is an itinerant short-term oil worker or something who happened to get high-paying jobs with massive overtime last year to reach $80K in income (while spending huge amounts on hotels and travel), but is expecting $20K this year, he’s not middle class yet. And contrariwise, if Joe is a Walton heir who’s getting a nominal $80K salary for his job that he does basically a hobby, he’s not really middle class either.
But education and parentage don’t really matter. If Joe is, like his parents, a high-school dropout and working a factory job or a trade, but making $80K/yr (and can reasonably expect to keep making it every year), he’s middle-class. He can afford to own a house, a car, health insurance, and save for retirement, etc. with enough cushion that he’s not one bad day away from bankruptcy (but he can’t afford to just stop working if he feels like it, either). That’s middle class.
Thank you for this. When I read the OP, I was interested to hear how being in a dual-income household or having children affected this. For example, if James is married to a woman who also makes $85k, how does that affect his class status? What if they have 5 kids? What if they have no kids? What if his wife makes 30k? What if his wife makes 150k? And your post seems to answer every one of my questions!
Taxes. When I was living with my ex-girlfriend we were paying $18,000 a year in property taxes on the house. Now I’m paying a little over $5,000 but it’s a small townhouse/condo with no land. We also have a 7% state sales tax as well as a state income tax of between 5% and 8% for most people. And car insurance has the highest average cost in the country. All that adds up.
When my son moved from his college home in a small town in Missouri to Chicago, he found EVERYTHING was more expensive. Rent was the big thing, of course, but it cost more to ride a bus, more to do a load of laundry at the laundromat, more to get a quarter-pounder at McDonalds, more for groceries. Two dollar beer night in college became $4.50 beer night in Chicago. Utilities and taxes were higher in general in Illinois, but Chicago also had a city sales tax.
Yeah, sales tax here in Chicago is 10.25%. That’s a bit pricey. You can still find plenty of $2 beer nights around, though, and many of the hipster type bars will have something like Hamm’s or PBR at that price (or maybe $3) as a regular draw. Delilah’s in Lincoln Park/DePaul neighborhood even has $1 beer nights on Monday. I’ve always thought the cost of living here in Chicago is more than reasonable, given the income you can earn here, being in a big city with a lot of good paying white-collar jobs.
I appreciate the question is about the US, but that’s starkly different from what middle class means on this side of the Atlantic. A person could be earning $85,000 a year (or any other amount) and be working class, middle class or an aristocrat.
If you told me that he played rugby at school, uses olive oil for cooking, drives a 7-seater car even though he only has 2 kids (they go to the local Gaelscoil - he and his wife Fiona took them out of school for a week in September for a holiday in Tuscany but it’s okay because it was “educational”), that he reads the Irish Times over his croissants and coffee on a Saturday morning but he’s lost a few kilos since he took up cycling as a hobby at the age of 43, that would be more of a clue.
If it were me writing public policy, I’d use a weighted trailing average and factor net worth into the equation. But we really don’t have good data as I understand it to get net worth.
Again, it depends on where you are. Where I live you are not going to be able to survive on $13K. Hell, the homeless encampments will kick you out for being too poor.
I feel the same way. Unless this is an 18 year old making $85k while living in a Cape Cod mansion Dad bought them and spending their weekends sailing their yacht, there’s no way $85k isn’t middle class. This is a very unambiguous number.
I like it though, because it brings up these other topics, like:
I’d say Low through Upper Middle class are almost all based on income. “Upper class” is not. Upper class people may earn incomes, but they certainly don’t have to. Upper class is based on wealth. Often multi-generational wealth, but I’m not saying Zuckerberg isn’t Upper Class.
This stems from history. Historically, there was the upper class, which included the aristocracy and royalty and possibly clergy, and everyone else, who were basically 100% peasants. These classes were clearly not evenly divided among the populace. Almost everyone was lower class.
Then international trade and capitalism made some of those peasants very rich. But even those merchants whose wealth surpassed the aristocrats and approached royalty were still not considered Upper class. The entire concept of “Middle class” was invented to label fabulously rich people who weren’t aristocrats. The distinction was that they worked for it.
Nowadays we don’t have aristocrats, but we have people who are so wealthy that they kinda take on the same role. These are the people who don’t ever have to work a day in their lives, and can be reasonably confident their children and grandchildren won’t either. They may work, they just don’t have to. Anybody who has to work, even if just to maintain a very high standard of living, is at best upper middle class. In my opinion. The Huxtables on the Cosby Show, with their doctor and lawyer salaries and million-dollar brownstone house in New York, were merely Upper Middle class. Today, unlike the middle ages, almost everyone is middle class.
Oh, and on another note, location matters only to a certain extent. But if you live in San Francisco or Manhattan, you’re not poor, no matter how little or how much you make, unless you live in a cardboard box in the street. In fact, you can’t be lower middle class in these areas either. Living in SF or NY is what you chose instead of spending all that money on other things. Complaining about the rent in SF is like saying “I’m not rich! These sky-high Lamborghini payments make it so I can barely afford to eat out anymore!”.
I’ve looked into it, and getting your own room in one of the outer buroughs of NYC starts at about $600/month in a shared house/apartment. Manhattan is obviously higher but some people are only charging $600/month to share a room, or $800 to get your own room. I think rents in San Francisco for your own private bedroom in a shared house or apartment start at about the same, roughly $600/month and up.
Keep in mind median household income in NYC is about 50k. Not much higher than more rural areas.
But for some people, the only places they can find jobs in their fields are places like SF or NYC. And if you live on the outskirts, you could be looking at a very long, stressful commute each day. For some people the lack of privacy from having roommates is worth having better job options, safer neighborhoods and shorter commutes.
That’s good to know, thanks. I was thinking even cheap places were closer to 2 grand. I’ve never lived in any of those areas, so I shouldn’t have expounded on something I know nothing about. I just get annoyed when somebody online says something like “my $800k mortgage takes up most of my $200k salary, so I’m basically lower middle class”.
That’s also true to some degree in the US, but Americans are less likely to see it that way. The typical American response is as seen, to emphasize differences in cost of living as if the real purchasing power of the $85k were the only factor. But it’s obviously not.
In fact fairly obviously somebody who only finished high school and makes $85k as an equipment operator in a coal surface mine in Wyoming is likely (not absolutely necessarily depending on the individual) going to have a culture gap relative to a modestly paid college or grad school grad in a business like publishing or media who lives in NY (the city). Is that really because the NY guy is ‘less than middle class’ because $85k doesn’t go that far here? Let’s be serious, of course that’s not nearly all of it, and it’s not necessarily just regional either. That’s the other thing Americans tend to use now as the all purpose dividing line, ‘red’ v. ‘blue’ states. Not really. Part of that divide would also typically be seen between $85k blue collar guys in NY and $85k college profs in WY.
Also the US for all its historic variations and divisions by region (nothing altogether new) is a single country. Even if costs of living vary, it’s ridiculous IMO to class an income that close to the national average* as ‘not middle class’, in any country where the norm is not poverty.
*$85k is notably about the US median household income (~$60k), it’s only slightly above the average.
That quote is for your own bedroom in a shared flat though, so you may have 1-3 roommates to get a rent of $600-800 in NYC or SF. Your own place solely to yourself is probably closer to 2k a month (at least in the more urban dense areas).
I had a friend whose sister and her husband lived in Chicago. Combined they made close to 300k but claimed they were constantly broke. The friend said it was because of high cost of living, but I didn’t buy it (they were childless at the time).
Even a nice apartment on the loop can be had for about 3k in Chicago. Thats 36k a year in rent, which is a lot but still barely 1/10 of a 300k income. That still leaves at least 150k a year for living expenses after taxes and rent. If you can’t make it on 12k a month net income after rent and taxes, you’re doing something wrong.
Also my brother and his wife lived on 40k in Chicago. Granted they lived in the ghetto, but they lived. They would’ve been able to live quite comfortably in Chicago on 70-80k a year I’m sure. 80k a year is about 4k a month after taxes and retirement savings.
I think the more money you make, the more things go from luxury items and wants and start becoming ‘needs’, so you alter your budget to make them necessary purchases. I saw an article of a family who made half a million a year but claimed they were broke. I think they spent close to 30-40k a year on activities for the kids (violin lessons, sports, private lessons, etc)) and vacations. Those aren’t needs, but I guess at that income you start to think of them as needs.
Yes. Our household of two makes a moderate amount more than that and it feels middlish. I am very aware that there are people much less and much more well off than us.
People who know SF well can speak for there. In NY that kind of housing cost is the absolute bottom, not what outsiders (who can’t expect to get rent stabilized places or jump to the front of the line for public housing) typically have to pay. Below $1,000 you’re talking really humble, or really lucky for own room.
However when looking at an aggregate figure like a median income (which is around the same in NY as national ~$60k), then you have to factor in that 1mil+ rental units in NY are rent stabilized and several 100k more public. People there might be paying $800 for a decent, big two bedroom for a whole family.
This kind of goes back to class not really meaning just purchasing power of income. The whole framework of discussing NY in terms of people ‘finding jobs in their fields’ there is a middle/upper middle class one. Working class people don’t move to NY from elsewhere in the US. They are either from NY or immigrants (who become effectively working class in the US for awhile or a generation due to language/culture barrier even if they were of a higher class back home).
I make $85k per year, supporting a family of 4 (including me). Spouse is not employed, by choice. We own a modest home (mortgage) in St. Paul MN, in a good /desirable neighborhood (some would call it the “best” neighborhood in St. Paul) - 3 br, 2 bath, small urban lot.
2 cars, made this century, paid off. No debt except mortgage. Kids 12 and 7.
I suppose the one caveat would be that we bought our house in 1998, before the big housing spike/crash. The house is now worth approx 3.5 times what we paid and we probably could not afford it if we had to buy it today.
And by that Pew definition you’re making half of what the single person is making, because they divide income by the square root of the number of people in the household.
So while by their definition the single person is not middle class (not taking metro area into account), you certainly are.