Where are the upper and lower boundaries of the American middle class?

[BrainGlutton]

This thread is getting a little mired in the question.

Who is middle-class in America and who is not? Are you middle-class if you are an adult with an income of $50,000? $150,000? $250,000? What about $25,000? $15,000?

Or should we define the MC in terms other than income, or in addition to it?

[TriPolar]

I would include in middle class anyone (or any family) above the poverty level, who still needs to work to keep from going broke. That may not be the only definition needed, but middle-class will be a huge percentage of the population by any commonly understood definition.

[Wesley_Clark]

Middle class to me means you have a stable full time job, you have accessible health care that won’t be taken away when you need it, you have a 6-12 month emergency fund, you can afford to send your kids to college, you can afford a mortgage and 1-2 cars, and you can afford to fund your retirement. The income in dollars it takes to do those things varies greatly depending on the size of your family and where you live.

A single person in the midwest who makes 30k could arguably be called middle class. But a family in San Francisco would not.

[Thudlow_Boink]

I don’t think you can define it in terms of income. For one thing, the cost of living varies quite a bit from place to place, not to mention from individual to individual (for example, someone who already owns a home can live comfortably on a lower income than someone who has a hefty rent or mortgage payment). For another thing, I think it only makes sense to classify households/families, rather than individuals, as middle class (otherwise, what’s a middle-class teenager?); but a single person can get by on a much lower income than can a large family.

[BrainGlutton]

@TriPolar

I would include in middle class anyone (or any family) above the poverty level, who still needs to work to keep from going broke. That may not be the only definition needed, but middle-class will be a huge percentage of the population by any commonly understood definition.

Then where do you put the “poverty level”?

[BrainGlutton]

From Class: A Guide Through the American Status System (originally published 1983), by Paul Fussell:

My researches have persuaded me that there are nine classes in this country, as follows:

Top out-of-sight
Upper
Upper middle

Middle
High proletarian
Mid-proletarian
Low proletarian

Destitute
Bottom out-of-sight

One thing to get clear at the outset is this: it’s not riches alone that define these classes. . . . “Economically, no doubt, there are only two classes, the rich and the poor,” says George Orwell, “but socially there is a whole hierarchy of classes, and the manners and traditions learned by each class in childhood are not only very different but – this is the essential point – generally persist from birth to death. . . . It is . . . very difficult to escape, culturally, from the class into which you have been born.” When John Fitzgerald Kennedy, watching Richard Nixon on television, turned to his friends and, horror-struck, said, “The guy has no class,” he was not talking about money.

<snip>

We now come to the upper-middle class. It may possess virtually as much as the two classes above it. The difference is that it has earned most of it, in law, medicine, oil, shipping, real estate, or even the more honorific kinds of trade, like buying and selling works of art. Although they may enjoy some inherited money and use inherited “things” (silver, Oriental rugs), the upper-middles suffer from a bourgeois sense of shame, a conviction that to live on the earnings of others, even forebears, is not nice.

Caste marks of the upper-middles would include living in a house with more rooms than you need, except perhaps when a lot of “overnight guests” are present to help you imitate upper-class style. . . . This class is also the most “role-reversed” of all: men think nothing of cooking and doing housework, women of working out of the house in journalism, theater, or real estate. (If the wife stays home all the time, the family’s middle-class only.) Upper-middles like to show off their costly educations by naming their cats Spinoza, Clytemnestra, and Candide, which means, as you’ll have inferred already, that it’s in large part the class depicted by Lisa Birnbach and others’ Official Preppy Handbook, that significantly popular artifact of 1980.

<snip>

. . . The middle class is distinguishable more by its earnestness and psychic insecurity than by its middle income. I have known some very rich people who remain stubbornly middle-class, which is to say they remain terrified at what others think of them, and to avoid criticism are obsessed with doing everything right. . . .

“Status panic”: that’s the affliction of the middle class, according to C. Wright Mills, author of White Collar (1951) and The Power Elite (1956). Hence the middles’ need to accumulate credit cards and take in The New Yorker, which it imagines registers upper-middle taste. . . .

If the audience for that sort of thing used to seem the most deeply rooted in time and place, today it seems the class that’s the most rootless. Members of the middle class are not only the sort of people who buy their own heirlooms, silver, etc. They’re also the people who do most of the moving long-distance (generally to very unstylish places), commanded every few years to pull up stakes by the corporations they’re in bondage to. They are the geologist employed by the oil company, the computer programmer, the aeronautical engineer, the salesman assigned to a new territory, and the “marketing” (formerly sales) manager deputed to keep an eye on him. . . . IBM and DuPont hire these people from second-rate colleges and teach them that they are nothing if not members of the team. Virtually no latitude is permitted to individuality or the milder forms of eccentricity, and these employees soon learn to avoid all ideological statements. . . . Terrified of losing their jobs, these people grow passive, their humanity diminished as they perceive themselves mere parts of an infinitely larger structure. Interchangeable parts, too. “The training makes our men interchangeable,” an IBM executive was once heard to say.

---

. . . Oddity, introversion, and love of privacy are the big enemies, a total reversal of the values of the secure upper orders. Among the middles there’s a convention that erecting a fence or even a tall hedge is an affront. And there’s also a convention that you may drop in on neighbors and friends without a telephone inquiry first. . . .

<snip>
. . . Proceeding downward, we would normally expect to meet next the lower-middle class. But it doesn’t exist as such any longer, having been pauperized by the inflation of the 1960s and 1970s and transformed into the high-proletarian class. What’s the difference? A further lack of freedom and self-respect. Our former lower-middle class, the new high proles, now head “the masses,” and even if they are positioned at the top of the proletarian classes, still they are identifiable as people things are done to. They are in bondage – to monetary policy, rip-off advertising, crazes and delusions, mass low culture, fast food, consumer schlock. Back in the 1940s there was still a real lower-middle class in this country, whose solid high-school education and addiction to “saving” and “planning” maintained it in a position – often precarious, to be sure – above the working class. . . . These former low-white-collar people are now simply working machines, and the wife usually works as well as the husband.

The kind of work performed and the sort of anxiety that besets one as a result of work are ways to divide the working class into its three strata. The high proles are the skilled workers, crafstmen, like printers. The mid-proles are operators, like Ralph Kramden, the bus driver. The low proles are unskilled labor, like longshoremen. The special anxiety of high proles is fear about loss or reduction of status: you’re proud to be a master carpenter, and you want the world to understand clearly the difference between you and a laborer. The special anxiety of the mid-proles is fear of losing the job. And of the low proles, the gnawing perception that you’re probably never going to make enough or earn enough freedom to have and do the things you want.

[foolsguinea]

There’s a reason that Marxists use terms like grand bourgeois and petit bourgeois that have meaningful definitions. “Middle class” seems to mean any old worker or business owner—heck, it might mean you, humble listener! It’s noise.

[Onomatopoeia]

I was kind of hoping for dollar ranges here. My 2012 household income from salaries alone was a little over $270K, and a little over $300K when I add in other income, so am I straight middle class? In the other thread I said that I consider myself upper middle class. Am I incorrect? If so, what is the delineation?

Somewhat relevant to the other thread is my 2012 income taxes were greatly mitigated by a K1 I was able to file because my business booked a first year loss, so my tax refund was well into the 5 figures which, on the face of it, I think is somewhat obscene. My point is that those of us earning higher incomes should easily be able to afford to pay a higher percentage of it in taxes.

The above stated, I’m sure there are other factors, such as where one lives and personal expenses, that play into what one can afford in taxes. For example, my wife and I have no children and, at this stage of our lives, don’t plan to, so our household expenditures are likely much lower than those in our bracket who have children.

Anyway, back to my question. If I am middle class, where does upper middle class begin? I guess I could just play in Google for a while, but it may be quicker to get the answer here.

[Wesley_Clark]

@Onomatopoeia

I was kind of hoping for dollar ranges here. My 2012 household income from salaries alone was a little over $270K, and a little over $300K when I add in other income, so am I straight middle class? In the other thread I said that I consider myself upper middle class. Am I incorrect? If so, what is the delineation?

Somewhat relevant to the other thread is my 2012 income taxes were greatly mitigated by a K1 I was able to file because my business booked a first year loss, so my tax refund was well into the 5 figures which, on the face of it, I think is somewhat obscene. My point is that those of us earning higher incomes should easily be able to afford to pay a higher percentage of it in taxes.

The above stated, I’m sure there are other factors, such as where one lives and personal expenses, that play into what one can afford in taxes. For example, my wife and I have no children and, at this stage of our lives, don’t plan to, so our household expenditures are likely much lower than those in our bracket who have children.

Anyway, back to my question. If I am middle class, where does upper middle class begin? I guess I could just play in Google for a while, but it may be quicker to get the answer here.

I doubt you are straight middle class, but it does vary by geography pretty drastically. In the sticks your mortgage payment and other household expenses like taxes, insurance, repairs, etc (excluding utilities) could run $500-600 or less a month. That won’t get you much in a large city. However there is pretty much nowhere where 300k a year won’t get you a good lifestyle.

Aside from how much security you have, how a person earns their money would also be a factor. Does someone who earns their money from investments count as a higher class than someone who earns it from a paycheck? A person who has $500,000 and invests it wisely can live off of that, but I wouldn’t call them upper class. But at the same time, I don’t feel comfortable calling someone who earns 3k a month in investments and owns their own home the same class as someone who earns 6k a month in income but has to deal with debt, job security issues, mortgages, etc. A person who earns money from a salary, vs a salary from a prestigious vocation vs owning a business vs living on investments are not the same class.

And yes, I’ll marry you Onomatopoeia. But only in a no fault divorce state.

[Ludovic]

@Wesley_Clark

Middle class to me means you have a stable full time job, you have accessible health care that won’t be taken away when you need it, you have a 6-12 month emergency fund, you can afford to send your kids to college, you can afford a mortgage and 1-2 cars, and you can afford to fund your retirement. The income in dollars it takes to do those things varies greatly depending on the size of your family and where you live.

A single person in the midwest who makes 30k could arguably be called middle class. But a family in San Francisco would not.

I’d say that if you meet most of these with no issues, you are still solid middle class. You don’t have to afford all of them, at least without really scrimping. If most of these are firmly out of your pay grade then you are not middle class.

If you can afford all of these plus have money left over for some upgrading of cars/houses, etc., then you are upper middle class.

I don’t really have a working definition of when you become upper class. I’d like to say that it’s when you have enough saved up to live an upper middle class lifestyle the rest of your life, but someone who has just reached a very well paying job of well north of $200K may not have that much saved up yet but doesn’t seem like merely upper middle class to me in most places in America (NYC, not so much.)

[Onomatopoeia]

@Wesley_Clark

And yes, I’ll marry you Onomatopoeia. But only in a no fault divorce state.

Well, I’d also have to check with my wife, but it shouldn’t be a problem.

[Onomatopoeia]

@Wesley_Clark

Middle class to me means you have a stable full time job, you have accessible health care that won’t be taken away when you need it, you have a 6-12 month emergency fund, you can afford to send your kids to college, you can afford a mortgage and 1-2 cars, and you can afford to fund your retirement. The income in dollars it takes to do those things varies greatly depending on the size of your family and where you live.

A single person in the midwest who makes 30k could arguably be called middle class. But a family in San Francisco would not.

@Ludovic

I’d say that if you meet most of these with no issues, you are still solid middle class. You don’t have to afford all of them, at least without really scrimping. If most of these are firmly out of your pay grade then you are not middle class.

If you can afford all of these plus have money left over for some upgrading of cars/houses, etc., then you are upper middle class.

I don’t really have a working definition of when you become upper class. I’d like to say that it’s when you have enough saved up to live an upper middle class lifestyle the rest of your life, but someone who has just reached a very well paying job of well north of $200K may not have that much saved up yet but doesn’t seem like merely upper middle class to me in most places in America (NYC, not so much.)

I live in NJ, an hour or so from NYC. I own two residences if you count my boat, which I am able to deduct as a residence on my taxes, no kids, 3 cars (two for commuting, one for play), no debt other than my mortgages. Because of smart decisions and significant bumps in our compensation packages throughout our 40s, if my wife and I magically lost our incomes tomorrow, I’d say we would be able to maintain our current lifestyle with no changes for some number of years I haven’t yet calculated.

We currently earn well in excess of what we need, or even what we spend, and haven’t used credit for purchases, even large purchases, in years. For example, we purchased two new cars recently, a Honda CRV in 2011 and a Volkswagon Beetle in 2012. We paid for both by personal check at the point of sale. Now these are by no means high end vehicles, but my point is we were able to avoid financing them, which we were never able to do before. This was significant for us and to me was an illustration that we’d entered a new financial class.

I think I meet Ludovic’s criteria for upper middle class, but I definitely still need to work, so perhaps I don’t.

[Onomatopoeia]

Correction to a typo in the post above. The car I purchased in 2011 is the Honda CRZ, not CRV.

[BrainGlutton]

@Onomatopoeia

Correction to a typo in the post above. The car I purchased in 2011 is the Honda CRZ, not CRV.

Oh. Well, then, you’re a lumpenprole.

[Onomatopoeia]

@BrainGlutton

Oh. Well, then, you’re a lumpenprole.

Hey! The CRZ is a cool little car. I wear my lumpenproletariat heritage with honor, comrade.

Argh, now I’m going to be hearing Boris in my head for the rest of the evening, or Natasha, whatever.

[Tracijo67]

@Onomatopoeia

I live in NJ, an hour or so from NYC. I own two residences if you count my boat, which I am able to deduct as a residence on my taxes, no kids, 3 cars (two for commuting, one for play), no debt other than my mortgages. Because of smart decisions and significant bumps in our compensation packages throughout our 40s, if my wife and I magically lost our incomes tomorrow, I’d say we would be able to maintain our current lifestyle with no changes for some number of years I haven’t yet calculated.

We currently earn well in excess of what we need, or even what we spend, and haven’t used credit for purchases, even large purchases, in years. For example, we purchased two new cars recently, a Honda CRV in 2011 and a Volkswagon Beetle in 2012. We paid for both by personal check at the point of sale. Now these are by no means high end vehicles, but my point is we were able to avoid financing them, which we were never able to do before. This was significant for us and to me was an illustration that we’d entered a new financial class.

I think I meet Ludovic’s criteria for upper middle class, but I definitely still need to work, so perhaps I don’t.

Our financial situation is similar, in that we have substantial investments due to many years of refusing to live beyond our means. We bought our first home the year after we were married in 1996, and still live in it. We have a very small balance on our mortgage that will be paid off in less than two years. We own very little ‘stuff’ and drive a 2000 Jeep and a 2006 Nissan, both of which are paid for. Our only debt is our home, and we earn sufficient to meet all financial obligations, send our son to a good private school, invest for his education and our retirement, and set money aside to pay for vacations and some small luxuries, like my tablet and daily latte habit. I am a supervisor for a county government human service department (excellent benefits, modest salary) and my husband is a systems engineer (good, certainly not bloated, salary). I would say that our income probably counts as middle-class, especially since we rely on salaries to sustain us, but like you, we could live for quite some time at our same level if one or both of us lost our jobs (but certainly not into retirement, or I’d be gone tomorrow and would find some personally meaningful part-time volunteer work to occupy my time).

I always thought of the upper-middle class as those occupying professions that pay in the high six-figures, such as doctors and lawyers. I think that the U.S. class strata, though, is moving away from what you earn an more to what your portfolio currently looks like. With the housing market bubble deflating, and nearly a decade of bleak financial outlook, it seems to me that more Americans are steering clear of existence funded on credit and more towards clinging to any extra income. Not enough, but quantifiably more than ever before easy credit made McMansions “affordable” to mechanics and nurses.

[Balthisar]

I’m solidly middle class. If I don’t work, it will eventually be a problem. However I live in a country where I’m considered rich, and in a neighborhood where the people are truly rich (although the houses are substandard and about what I would expect being middle class in the USA, and ashamed to live in if I were rich – my neighbor has to park his Lamborghini in the street!).

A mid-level engineer here is considered solidly middle-class. They make from $22,000 to $28,000 per year, and could never dream of living in my “rich” but subpar neighborhood. I’m not sure how they even afford their purchased apartments. One of my employees recently bought an apartment for more than the value of my house in the USA, and it’s only about 100 meters-squared.

When I was a kid I dreamed of being able to make $28,000 per year. I was poor (American poor, trailer trash literally). To me, all of the middle-class people were actually the rich.

So I suppose I define middle class like this: right where I am. People that make more than where the corporate pay scale cuts off are upper-middle (i.e., people who have contracts and negotiate their pay directly). People that think I’m rich are lower-middle or lower.

[Rachellelogram]

According to wikipedia, a household income of $300k puts your household earnings in the top 5% of households in the US–but the cutoff to make top 5% is only $186k. According to this link (unsure of its veracity), you’d be right at 2%. If that information is accurate, your household brings in more money than 98% of households in the nation. It would be grossly inaccurate to claim you’re anything but solidly upper-class, in terms of income.

[Onomatopoeia]

@Rachellelogram

According to wikipedia, a household income of $300k puts your household earnings in the top 5% of households in the US–but the cutoff to make top 5% is only $186k. According to this link (unsure of its veracity), you’d be right at 2%. If that information is accurate, your household brings in more money than 98% of households in the nation. It would be grossly inaccurate to claim you’re anything but solidly upper-class, in terms of income.

Interesting. I put my 2012 income in the linked calculator and came up in the top 4% based on where I live in NJ. So are those in the top 5% and above considered upper class?

I have to say that although I am currently financially comfortable, my estimation of someone who is upper class, and I’m pulling this right out of my butt, is someone who is wealthy, perhaps independent of a salary, and whose net worth exceeds, say, 5 million dollars.

[adaher]

I’d put it at between $30K and $75K for most areas of the country. In the most expensive metros, maybe up to $150K. When I was looking at New York rental prices, I was astonished at how much you needed to make to get a half decent place in NYC. A decent apartment costs $3000/month, and if we count rent as ideally no more than 1/3rd of income, then a family has to make $100K. So $100K is solidly middle class in NYC.