For many years my family income has been very, very close to the median income. We’ve never felt anything other than middle class. Lower middle, to be sure, but middle. We could afford to own and maintain two cars at a time, even if they weren’t great cars. We could afford to feed our kids and they even have clean clothes to wear that are within current style parameters. We don’t go on vacation and often feel strapped because we have made some spectacularly bad financial decisions in the past that put us in debt for stupid stuff. But if we didn’t have that debt, we’d be fine in our area at $55k.
I think it’s very, very important to keep cost of living in mind. In our small, rural area it’s almost impossible to find anything but a detached home to buy. So much so that we don’t use terms like “detached” to describe them. If you are buying a non-detached home in my town it’s either 55 plus or you’re buying the whole building to rent out. The median home price in my town is well under $150k. $150k will buy you a new home on a standard lot 3 bed/2 bath with about 1200 square feet. If you are ok with an older home, you’ll easily get over 2000 square feet.
When people talk about cost of living they often talk about home prices, because it’s a huge part of the cost of living. Gas prices vary by less than 50 cents a gallon across the country usually. Food usually is about the same with only small variations. The big one is your housing. If you can find an area with cheap housing and make $55k/year you’re going to be fine if you can budget decently.
I just think this is a misuse of the word “elitism.” That refers to the idea that you think you’re better than everyone else. Not being able to imagine how people could have a certain low salary would be that unfortunate word “privilege.”
I likewise have trouble understanding how people in other countries subsist on much lower money than I have, even considering the cost of living. That is my privilege–I’ve never had to do it, so I don’t know what it’s like.
And I think these averages are a good wake up call to tell people to “check” their privilege. You’re not as bad off as you think. And when you talk to someone who is worse off, you probably sound like a twat when you talk about how bad it is that you only had a 4 week vacation this year.
I’m not so sure the term “privilege” covers it. What you are really seeing, at least to a certain extent, is the fact that it takes more money to live exactly the same lifestyle in different places–a fact that is not covered by the bare mention of salary.
Someone making twice as much cash in NY City as another in (say) a rural Iowan town may not actually be all that “privileged”, if it takes three times as much money to live the same lifestyle in NY City as it does in rural Iowa (all numbers plucked from the air for the sake on an example).
Of course, if they could take their NY salaries and move to rural Iowa, they would be “privileged” as hell.
But Malthus, what about the point I made upthread, that in the NYC metro there are lots of people working for very low wages (or at least there were near the end of the '90s boom)? It’s just that white self-styled “middle class” people won’t even consider living in those neighborhoods, like the one I lived in in Jersey City (there were other neighborhoods of JC close to the water where Wall Street traders lived: I’m talking about the poor, mostly black and immigrant areas).
To flesh that out even a bit more, when I was living there the NY Times had a memorable article about how NYC and Los Angeles functioned as almost like cooling reservoirs for wage growth, as businesses could move operations there if wage pressure was too high elsewhere. This is completely against the common notion of those areas, along the lines of what you are saying here. But I wonder if urban professionals just assume that the people working blue collar jobs are all making $20 an hour, and don’t realize what’s really happening right under their noses, in a different economic tier.
Fair points.
ETA: And of course there is greater privilege in being able to live a “middle class” lifestyle in NYC than in rural Iowa. Unless you are living in NYC but just eating corporate fast food and going home to watch Netflix every night, in which case, yes: you are wasting the opportunity you have been given.
Choosing to take on so many more expenses than people with median income so that they’re barely living within their means doesn’t change the fact that they’re well off. They’re not poor, just crap at managing expenditures.
Right. That house that is “costing” them so much is actually building a huge nest egg of wealth. They can sell when they retire and downsize, move to a cheaper market, or just travel.
I also get the impression that people who are at the 70th or 80th percentile but feel cash-strapped hemorrhage money in ways that seem insignificant to them but which add up. A landline they should have gotten rid of years ago. Buying or leasing new cars. Gym memberships that go unused. Getting a “deal” on designer shoes or handbags. Taxi or Uber rides. A $5 latte here, a $30 lumch there. Even at the supermarket, buying whatever looks good, then throwing much of it away a couple weeks later.
the place I live in was bought for under half of what their “kitchen renovation” cost.
it isn’t the fact that they spent $140k on a renovation that sticks in my craw, it’s that they talk about it as though they had to endure some sort of hardship to be able to afford it. Like “fake wood plastic countertops” are equivalent to living in a bedbug-riddled tenement and eating dog food.
Or they have kids. Daycare for an infant in my city is $2100 a month. That’s for an ordinary no-frills chain daycare center. It’ll go down to $1800 when the kid turns two. If you have two kids, that’s an enormous amount of money flowing out.
Many* households near, at, and below median income also have kids, of course, and have to make do either without such services, or without that value in other things.
If we exclude single adults living alone or in institutions from the set of “households,” we can say “most,” here.
The issue though is whether living in such an area it truly equivalent to living in a typical “middle class” area elsewhere - that is, does living in such a location represent a true “apples to apples” lifestyle comparison?
There is no doubt that one can save a lot of money in the big city by deliberately choosing a downmarket place to live. But that is the point: you are deliberately choosing a less attractive lifestyle to save money, meaning your quality of life is less.
The thesis is that to live the same quality of life - of the type considered “typically middle class” - one requires a lot more money in some places than in others. It isn’t a valid critique of that theory to point out that, by deliberately choosing a lower quality of life (say, living in a “poor, mostly black and immigrant area”), a person earing a salary large enough to live a “typical” middle class life could, in fact, save a bundle.
[In fact, I used that strategy myself: I lived for a decade in an apartment owned by an elderly immigrant couple (it was in their house) in a working class/immigrant area, while earning a good salary; I saved a large amount of cash that way, which I used to buy the house I live in now].
The point is that if it costs say $50K to live a “typical middle class life” in one city, and $100K to live a “typical middle class life” in another, the person making $100K in the latter city isn’t really privileged compared to the person making $50K in the former - unless of course they can take the extra somehow (by either living downmarket, or converting the difference into real estate investments and leaving).
Why? Each have their attractions and drawbacks for someone with a middle class income. In NYC there is tons of culture nearby to sample. In Rural Iowa, there is the possibility of owning your own rural property - something harder to find at a reasonable price affordable to a middle class person near NYC.
NPR’s “economics and real people” stories are almost always about people with high-paying jobs ($200k+ for a couple) and how they managed to shave $20k off the cost of their wedding by using the “on demand economy,” or, as you mention, how hard it is to find contractors for your $140k kitchen renovation these days.
It’s like stories that are just a little too “working class” for the NY Times society/living pages get punted to NPR.
Well, yeah. But in high-cost areas, people living near the median have to make choices that are usually only faced by the truly desperate, such as placing their kids in likely-unsafe illegal day cares.
While the well-off are comparatively fortunate to be able to place their kids in a safe, clean, regularly-inspected environment (and that is all you are getting-- the prices I’m quoting are for basic facilities) paying $50k a year to to so can cause a serious drop in your standard of living.
Yeah, that was enraging. Like “oh my, it was just the most dreadful situation, you can hardly imagine what we suffered through”. And NPR didn’t treat it as “overheard at the country club” but just the lament of a middle-class family. Not cool, NPR. Not cool.
Right? This is, again, what is so insulting. The things that the majority of Americans cannot afford are treated as though they are essential, meaning that we are all raising our children in some sort of distasteful, substandard status.
As I said, for those who own their homes (and obviously this would include the people doing the kitchen renovation), they CAN “cash out” when they retire, and go buy a huge tract of land in Iowa if they like. Or pass a very valuable piece of free and clear real estate to their children. A huge mortgage means massive wealth building, subsidized by the government.
We are getting into matters of individual taste. But how about the cost difference from NYC to Detroit or Scranton? The NYCers aren’t getting any advantage for their money?
A mortgage is a great way of creating “forced savings” it is true (a point I’ve discussed before in other contexts), but this scenario assumes that the middle-class person at issue is buying property, rather than renting.
There are all sorts of reasons why they may wish to rent instead (for example, if they have a professional-type job that requires being mobile). If you have to move from city to city a lot, transaction costs eat up the advantages of property-ownership-as-investment.
Plus, the “cash out and retire in Iowa” option, assuming it is available, is a pretty contingent form of “privilege”. It assumes that your life will go a certain predictable way. It is a “privilege” one is likely to enjoy at some point in the future.
But yes, I will grant that banking wealth in the form of real estate is an advantage.
As you say, a lot depends on individual taste. The higher density of major cities can be both blessing and curse, depending on how you look at it.
My point is a rather simpler one: in rating what amounts to a “middle class existence”, it makes more sense to track the elements of what you may call the ‘standard middle class lifestyle’ - the three-bedroom home for example - and fit the amount of cash needed to achieve that in the particular location, than to look at money alone as the absolute.
But in places with ordinary cost of living, ordinary people can afford ordinary childcare. Their $800 a month day care is exactly the same as our $2100 a month day care. We don’t get any special benefit from our extra $1,300 a month, and that money doesn’t make our lives much better if we never see it.
In high cost of living places, people actually do have to make some unacceptable choices. My area recently had a baby killed in an unlicensed daycare with too many kids because he was strapped in to a car seat and left alone, and when there was a house fire nobody grabbed him. That actually IS distasteful and substandard, and that is the kind of care people making the median income can afford.
Let’s try to remember that this all sprang out of the story about the family with the $140,000 kitchen renovation, and their complaints of hardship before they were able to afford it. If the NPR story had instead been about a family living in a tiny rented apartment that cost them $8,000 a month, your points would have a lot more traction.
