Same question.
Is class determined by an INCOME + ASSETS - DEBT calculation, or is this too simplistic?
Cash flow, which is probably harder to measure. There are a lot of millionaires with negative net worth, but still live pretty darn well.
A guy like Mike Tyson, he’s supposedly broke, but he sure has a nice house.
Absolutely can’t be measured by income alone, as class is really a social construct and mindset. I’d say, though, if you can live off your paycheck in a reasonable manner and save a bit for emergencies/retirement, you’ve arrived in middle-class, and if you don’t have to work at all because your money works for you, then you’ve left middle-class behind.
This is a wide gap which I think is why most people consider themselves middle-class.
To my mind, too simplistic.
Class isn’t merely defined by income and assets, to my mind. For one, this raises the objections already raised - that the relative value of these things varies wildly depending on where you live; but more fundamentally, it will not suffice because class isn’t all about income, but also about such things as how that income is derived.
This is why I do not agree with an income cut-off; even though it may “seem” that earning in the top 5% “ought” to make you upper-class, that’s too simple. It puts doctors and lawyers - that is, professionals who work for a paycheque, often (in the case of lawyers - and I’m one) essentially as glorified office-workers, in the same category as captains of industry - and there is clearly a difference.
I’d say that, in general, earning a salary or paycheque from one’s own services, one cannot be “upper class” except where those services essentially give one celebrity status. Lawyers, doctors and the like thus are presumptively upper middle class (at best), unless they have other strings to their bow such as acting on various boards of directors, or managing partner status; in short, one generally cannot become “upper class” by selling one’s own services - even though the paycheque may put you in the top percentiles, earnings-wise.
Sorta a weird tangent, but Fresh Prince of Bel Air’s aunt and uncle: middle class or upper class? I mean, the guy was a judge, how much do judges make? Yet they seemed to have all the trappings of an upper class family.
My wife has been watching “Princess of Long Island”, which I’ve been trying to avoid, but showcases some upper-class people who don’t have much money (I guess they’ll inherit from their parents?). On the flip side of that, you’ve got people like Sam Walton, who drove a beat-up old truck and was more interested in bird hunting with his dogs than any of the finer things money could buy him.
I think most people in the US really are “middle class” in the sense that they have bought into a particular menu of acceptable life choices and goals. But achieving that these days is hard - I’m doing it, but on two fairly substantial incomes when my father was able to do it with one. So I’d say I’ve got a middle class temperament, but since my household is in the top 8% of earners I can’t honestly claim to be “average” in that sense.
“Class” does not refer to income or assets. It refers to a social group. These social groups are amorphous and porous. But when you show up at a party, and everyone takes a look at you and figures out that you aren’t “one of us”, then you’re not part of their social class.
In Britain the have the useful distinction between working class and middle class, which has kind of faded in the US. A steelworker making $60,000 a year is not middle class, because he has a blue collar job. You have to have a white collar job to be middle class. A shopkeeper can be middle class, but the guy who sweeps up at the shop is not, even though he works at a shop. A schoolteacher is middle class, the bus driver is not even if the bus driver makes more money.
Remember when drinking wine was something no self-respecting manly man would do? Real men drank beer, wine was for the rich and Europeans. Drinking wine was a class marker.
Anyway, these sorts of things are dissolving, but still kind of exist.
George Soros’ Black Wedneday trade as an example of arbitrage? Not even close.
I know high-frequency trading is confusing and scary, but the numbers don’t fit your narrative. Getco, one of the largest high-frequency trading firms, made $25 million last year. Net profit for the entire industry last year was $1 billion. A bunch of computer nerds aren’t destroying the middle class.
I think yours is the most realistic/precise definition so far, except I would add net worth to income in the parentheses in order to make it more exact.
I doubt most middle class people have 6-12 month emergency fund. Otherwise, I agree. (They should but they don’t.)
I disagree with the 5% cutoff; I think it’s closer to 1% if we’re discussing only income, talking about people with no more accumulated wealth than would be typical for the income bracket.
I was arguing Bible stuff with my father, and said he was inconsistent, using the line about a rich man having the chance going to heaven as that of a camel fitting through the eye of a needle. He objected to being called “rich” so I mentioned, 3 houses (actually 4), 2 luxury cars, until recently a 28 foot boat, lakefront property, etc., meaning that by world-wide standards, he was rich. But definitely not “upper class” in US socioeconomic terms. He worked hard all his life to get what he has, hasn’t been particularly lucky with investments, but is doing OK in retirement despite outliving his expectancy thanks to conservative habits.
My guess is my folks are in the top 2% (or, were until his retirement around age 80 when my mom put her foot down). But they couldn’t have lived a middle class lifestyle (or better) without continuing to work.
To me, upper class means being able to live high without needing to work. Also, there are two pretty distinct types: old money and new money. Of course, there are always further distinctions.
I’m on the borderline between middle and upper-middle. I live in a neighborhood of upper-middle with some upper, but I got lucky on one of the smaller houses at the bottom of the housing market. I’m a software engineer, and while I’ve saved pretty agressively most of my career, I’m still wondering how I’m going to manage retirement at age 65 in 9 years. Most likely it’ll be 19, and fingers crossed. I don’t know how much longer I can keep up with the damn youngsters. Everything is getting so complicated!
Agreed, with a caveat for retirees.
Thanks for putting the effort in here. I do think your numbers are off, however.
I am in the middle of your income range here, and do consider myself upper middle class (although I am finding it increasingly difficult to define it), but I think your salary range may be too broad for this class. For example, when my household income was $150K I considered myself solidly middle class. I would also rarely fly first class on my dime. Now first or business is all I fly unless it is unavailable, and I fly quite often.
Upper: 71° 50’ N
Lower: 18° 55’ N
*:***D&R:
I make $80k a year as a federal civil servant, living and working in Washington, DC - that actually places me a bit below the median of $84k. Nonetheless, I can afford a nice studio apartment, international travel a couple times a year, and assorted smaller vacations. I live quite well, but I’m a single guy.
I think his numbers are ok if you take net worth into acct. For example, someone whose net worth is $3M or so but income is only around $140K (mostly from dividends and some stock trading realized gains). From income it doesn’t seem like much, but the net worth pushes him in upper middle class. But someone with same income from wages but trivial net worth wouldn’t qualify.
I don’t think you can necessarily use profession as a guide to class. I work with doctors who earn in the high 6 figures, and with doctors who, because of their practice, specialty, and other factors, earn substantively less than I do.
I believe it to be a combination of factors, of which income and profession are both significant but not determinative.
Take lawyering (which I know, being one). Lawyers have some things in common (a comparatively high level of education, for example) but vary widely in income and indeed job description: some work as civil servants, others as sole practitioners, still others for major law firms; some work with the poor, as criminal defence lawyers; others with the very rich.
In general though, the type of work that lawyers do puts both lower and upper bounds on what class lawyers can be seen as. They cannot be “working class” even though a working class, union job could be earning far more than a lawyer (say) working for legal aid money - the fact that they are highly educated and work with words and paper, rather than their labour, determines that. The fact that they generally earn from their own skills also generally precludes them from entering the upper class - even though those at the top of the profession can earn significant income; naturally, top partners at major firms, or lawyers who have vaulted into directorships can beat that.
There are exceptions of course, but in general reasonably successful lawyers tend to group in the upper middle class category.
And expenses matter a lot. My household income is $80,000 and I live in a cheap part of the country. If I were a single person supporting only myself, I’d consider myself upper middle class. Plenty of money for everything I need and I lot of extra spending money.
But in reality my household income is $80,000 and that goes to support 6 people. We have enough money for everything we need, but clothes come from Target and furniture comes from Craigslist. I have no complaints, we can always pay our bills on time. But nice restaurants and fancy vacations are out of the question. I consider us pretty solidly middle class.
But, it is also a social issue. My husband is a professor with a PhD and I stay home with the kids. A family with one person a hairdresser and the other a mechanic might make the same salary, but they would be in a different social class.
I’ve just come to the scandalous realization that by these standards my dad and his wife are upper class. They haven’t upgraded their home or cars but they take several world-spanning vacations a year on their generous full state-funded retirement despite the fact that for most of their careers they worked as civil servants. So therefore since I don’t want my dad to be upper class I’d say that you aren’t upper class until you can afford all the accoutrements of an upper middle class lifestyle (i.e. large house, expensive car, big vacations) and still not have to work for the rest of your life.
I’m curious, what do you mean by “nice” restaurants here? I consider Chili’s a nice restaurant, as well as most pizza joints, most Mexican and Chinese restaurants, etc. My idea of “not nice” is fast food restaurants with no table service … places like McDonald’s, Wendy’s, KFC, Jax, etc. I don’t consider such restaurants “nasty” they are just not places where I would go to dine out on a special occasion.
I’ve been to local French, Italian, steakhouse and seafood restaurants and for the most part I’ve not been impressed. With one or two exceptions, the food has not been all that good, and the service not much better than what I get at Chili’s (also a “nice” restaurant from my POV). Used to be a Maggiano’s in Atlanta (Buckhead) that had first class food, but it went downhill when their chef left. And I once went to a high-end steakhouse where the only thing that was impressive was the bill.
So I’m not sure what you mean by “nice.”
I think he is referring to an upscale restaurant. For me, an upscale restaurant is one with a dress code, requires a reservation at all times, has a nice, relaxed, and tasteful ambiance, a professional wait staff, where dishes are prepared with fresh ingredients, nothing frozen (e.g. fish are caught that day, etc…), where the chef will cook a dish to order even one not on the menu, tables are appropriately placed for private conversation with no concern for eavesdropping, and although I am not a drinker, a comprehensively stocked wine cellar accessible to patrons, and a sommelier on site.