We hear a great deal about the middle class. The middle class is the backbone of our economy. The middle class is hit the hardest by taxes. Those in the middle class work hard. Politicians always heap praise on the middle class because the middle class makes up a rather large chunk of the population.
But what is middle class? Most Americans define themselves as middle class. Chances are, as a reader, you looked at the title of this post and answered the question with a resounding, “Yes!” Being middle class feels almost quintessentially American, like the Fourth of July or the Super Bowl. Turns out, though, that being middle class may not be very cut and dry — and that it has more to do with experience than economics.
Economics vs. Experience
In the world of economics, analysts try out different rules of thumb, basing “middle class” entirely on annual earnings. If you earn in the upper 20%, you are upper income. If you earn the lower 20%, you are lower income. Everyone else — the 60% in between — must be middle class. Others define it as those earning between $25,000 and $100,000 a year. And, when tax policies are discussed, many suggest that those making more than $250,000 are upper income, implying that the middle class is even bigger than rules of thumb might make it. The median household income in 2010 was $49,445, so that gives many a point of reference when trying to determine what, exactly, is middle class.
The truth, though, is that experience has a great deal to do with what constitutes
the middle class. One of the reasons that someone making more than $100,000 a year (what some analysts have named “upper middle class”) can honestly feel that he or she is still in the middle class has to do with where he or she came from. Most of us grew up middle class — able to have our needs met, but watching our parents work hard for wants. If you grew up middle class, chances are that surpassing your parents income doesn’t change your view that you are still middle class. You identify with the middle class, and insist that it’s who you are.
Another impact is your experience with costs and with disposable income. Living, as I do, in Utah, I find that my income stretches much further here. My housing cost, food cost, entertainment cost, child care cost, and just about every other cost is less than what I paid when I lived in the state of New York (and I didn’t even live in New York City). While I feel almost wealthy here, I know that I wouldn’t feel nearly so well-to-do if I lived somewhere with a higher cost of living.
Practically speaking, whether or not you are middle class depends on where you live, as well as how much money you make. The average median income of $49,445 might go far in a rural area, but in a major city on one of the coasts, someone making just under $50,000 a year might feel nearly in poverty — no matter what economists say about what’s middle class.
What do you think makes someone middle class?