Upper-middle class is having enough income for necessities, with enough left over to pay the mortgage on a nice house in a nice neighborhood, and a nice big cushion of savings for a rainy day. You sustain this condition on a single income. You can’t spend willy-nilly, but you have insurance and savings to ensure that one or two crises are not going to torpedo your finances.
Contrast with middle-middle class, where you are missing one of those puzzle-pieces of security. Contrast with upper class, where you have all these factors of security, maybe a lot more excess money, sustained by less than one full-time income.
Why would I underestimate that? I spent the first half of my life in ‘grinding poverty’. When I was 25 I lived in a basement suite with a roommate, ate ramen noodles and Kraft Dinner, and worried about how to make every month’s rent. I didn’t get my first decent paycheck until I was 35 years old.
And I thought I actually said that the most important part of having money was to not have to worry about making the rent and such. So I am not sure where you got the notion that I underestimated this.
I could afford a home in San Francisco, if I financed it. My down payment would wipe out most of my savings, and I’d be eating beans and rice. Yeah, I’d have that equity, and be building it, but that’s not wealthy. If I were wealthy, I’d pay cash.
Okay, maybe not you personally. I was responding to the “money can’t buy happiness” cliche. It’s never poor people saying that. The things that make poor people unhappy absolutely can be fixed with money, making them significantly happier. Are there unhappy rich and financially secure people? Sure. But there are a lot more unhappy financially insecure people, because financial insecurity is a huge, ever present stress on mental health.
You can’t buy happiness but you can rent it. I think most people are happier with more money than they are with less. Happier is not absolute happiness, and being upper middle class means you don’t worry about economic tragedy around the corner but you still have all the other worries of life to deal with. You may have good health insurance and can afford more in medical bills, but that doesn’t make you happy if someone in your family has a serious illness.
Now being filthy rich, if that doesn’t make you happy then that’s your own fault.
I’d agree, but I don’t see the point of the single income criteria. I mean, nobody in their right mind is going to somehow claim that a family of four with two working parents making $150k a year combined is NOT upper middle class.
I’m with the crowd that says that it’s basically having all the necessities covered, often in a fashion that’s more than the bare minimum, having some reserve capacity for calamities of various kinds, AND a sizeable recreation/leisure budget.
In fact, I’d say that a defining characteristic could be that the limiting factor on upper middle class vacations is often having enough time off, not money.
Most upper middle class families may currently have two incomes, often two high incomes. Even a lower income added to one high income can make a big difference, it’s that extra that provides the cushion.
Not enough time off is a problem for high earners. With two high earners scheduling vacations at the same time makes the problem worse. At least when your kids are grown you don’t have to try to align time off with school vacations. And just having kids who are on their own, even with some financial assistance can get you to that position of income above the necessities.
A few folks have mentioned how local cost of living should be considered. Manhattan has come up several times. But often living in an expensive area is often a chosen luxury. Very few people need to live in Manhattan. There are people who work there who live in PA. The island’s population doubles during the day.
Right, when I think upper-middle-class I think professionals, and thanks to assortative mating and cognitive stratification, professionals marry other professionals. The days of doctors and lawyers being men who married nurses and secretaries respectively are long gone. These days, doctors marry doctors and lawyers marry lawyers.
I think this depends on what “need” means. IME as people make more money, they start “needing” a lot more. Guy I worked with ten years ago who, like me, was also making ~$25k/year was supporting a non-working wife, one kid, and sending money back to his and her parents: “[Ruken], I’ve never been rich before. This country is great!”. Meanwhile I was griping about the price of cheap beer going up.
My household today doesn’t need to be two-income, but it sure is nice! I live in places and buy stuff and experiences I never even considered a decade back.
Whoops… didn’t refresh before replying; what **Ruken **said!
Basically “need” is relative. They could get by on a 75k a year salary from one parent, but having two of them opens up a whole different realm of opportunity and security, i.e. that upper middle class lifestyle.
I mean, there are a lot of middle class families who currently have two earners even though they could technically live on one salary. They don’t “need” two salaries, but giving one up would mean not being able to afford a home in a good neighorhood and foregoing an emergency fund, orthodontia for the kids, vacations, and college savings. They need two salaries if they aim to keep a “middle class” lifestyle. But they don’t need two salaries just to survive.
How is this any different than a household where both parents must work so that the kids can go to elite private schools and the family can live in a $800K home on the swanky side of town?
I could stop working right now and live rent-free in my parents’ basement for the rest of my life. Knowing how boring I am, I wouldn’t need anything but library books and cheap take-out to keep me entertained and happy. I have enough in savings to support these passions for the rest of my life. Would it make sense to call me “upper middle class” in this scenario? I don’t think so.
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Depends on where you live. In Santa Clara county, both of these people would be making under the median income. And the cutoff for affordable housing there is not much below their combined salaries. So if they had to buy housing in the current market, they would be nowhere near UMC, and in fact stressed,
To my point above about Manhattan, Santa Clara county is a desirable place to live and, to most people, an optional luxury. It is, however, a lot bigger than Manhattan, so my point here is weaker.
I’m from New York, so I agree with your point about Manhattan. Even 70 years ago Manhattan was not a great option for my parents. They lived in an apartment in Queens and bought a house in Queens.
I live in Alameda County. 23 years ago, when we were looking for a house, Santa Clara county was out of reach, and that was before the boom. Not to live in Santa Clara and the surrounding counties means you have to drive for well over an hour each way in heavy traffic. I wouldn’t really call avoiding 3 hour commutes a luxury.
True upper-middle class, as I see it, is having a high-status lifestyle as you described above, but not feeling the pressure of having to support it with two incomes. They could lose one income and continue a high-status life with little or no sacrifice.
Most people also don’t have to work in Santa Clara county. We occasionally lose people to what everyone still calls Google X, startups, etc. in that region. They’re not taking the jobs because they’ll be better off financially, that’s for sure.
I agree with your first paragraph, but not the second. I think all the correlation between money and happiness is in the range from “can’t eat” through “doesn’t worry about making rent”. Once your get to the point where you aren’t worrying about economic tragedy around the corner, I don’t think you get much more happiness with more wealth.
yeah, living IN Manhattan is a luxury, but living withing an hour’s commute of Manhattan may be the prerequisite to keep your salary. Money is worth less is some places than others, and you need to account for that at least partly.
But “high status life” is relative. Just like the high status life that a middle class family enjoys is relative. I could slash my income in half and technically still be middle class (and thus enjoy more status than a poor person). But I would not be able to afford my mortgage. I would have to rent a tiny studio apartment somewhere or live with roommates. My emergency fund would quickly diminish and I’d likely be forced to live a paycheck to paycheck existence after awhile. I wouldn’t technically be poor but I would feel poor because my lifestyle would be in stark contrast to how I was raised and my concept of a “good life”.
I can imagine a family that currently makes a combined income of $350K (in a low cost-of-living area) could no longer feel “high status” if they go down to $175K. Because the difference between $350K and $175K is the difference between enrolling the kids in private school from K-12 (like the wealthy do and like their parents did) to enrolling the kids in private school just for high school (like middle class families do). Or owning a summer house (like the wealthy do and like their parents did) to renting a summer house (like middle class families do). Or hiring a full-time nanny to watch the kids and someone to clean the house once a week (like the wealthy do, like their parents did) to doing these things themselves (like middle class families do).
It seems to me that lumping a family making $350K into the same socioeconomic group as one making $55K (the median income for American households) is harmful to the middle class in general. A family of four living on $55K may not be starving, but they have significantly more struggles than the family making $350K. For the former to have any hope of success, they need affordable housing. The latter doesn’t have to worry about that. Routine expenses can easily bankrupt the $55K family if they aren’t careful, whereas the family making $350K can weather most bills as long as they aren’t catastrophic (a million dollar hospital bill, for instance). If we don’t separate out the family making $350K when we talk about the “disappearing middle class”, then the problems faced by the majority of the middle class can be dismissed as “first world problems”.
I see this on Reddit all the time. “You can’t find affordable housing? Maybe if you’d move out of Silicon Valley and go out to the Midwest, you’d quit your whining!” The vast majority of people who are struggling to find affordable housing aren’t professionals living in ridiculously high COL areas. They are folks working regular middle-class jobs who would rather not put 50% of their income towards housing, since the income they’d be left with would only allow for a “poor” lifestyle rather a middle class one. That’s a totally different kind of angst than the couple who doesn’t want to give up 50% of their income because then they’d only be left with a comfortable middle class lifestyle rather the wealthy lifestyle they’ve grown accustomed to. I think that’s a much better marker of “true” upper middle class than the definition you’re using.