The news is full of tales about how hard it is for the middle class to make ends meet. Stories abound about how jobs are being lost, prices are rising, and many necessities, such as healthcare and education, are becoming increasingly expensive and difficult to buy. Politicians rush to propose remedies, pledging anything from tax reform to better schools in order to "rescue the middle class."
Politicians, on the other hand, aren't always clear about who exactly is in the middle class they're trying to defend. They talk about "regular Americans" or "working families" in broad terms, but they rarely provide a concrete definition of who these people are.When they do attempt – like when presidential candidate Hillary Clinton vowed during the Democratic debates in 2015 that she would not raise taxes on those earning less than $250,000 – their positions are frequently criticised as unrealistic.
It's hardly surprising, however, that politicians are having trouble defining the middle class. The issue of social class in America is immensely complicated, so much so that reporters from The New York Times spent more than a year researching it without reaching any strong findings. The closest the report could get to a description was "a mix of income, education, wealth, and employment" - Each of these aspects contributes to the definition of who the middle class is and what it requires.
What Is the American Middle Class? - Definition, Income Levels, and Employment Opportunities
Middle-Class Perspectives
Simply conducting an Internet search on the term "middle class" reveals that not everyone agrees on what it entails. The phrase "middle class" is frequently used in news headlines, generally in conjunction with adjectives like "squeezed," "burdened," or "vanishing," however the real numbers vary. Even more ambiguous are opinion surveys, with people of varying income levels holding wildly divergent ideas on who is and isn't middle class.
Those in the Middle Class As reported by the media
Consider how two different news sites handled a story on a 2015 research conducted at Princeton University to see how media perspectives of the middle class differ. The study discovered that death rates were rising among middle-aged non-Hispanic white Americans, particularly those without a high school diploma. This is framed as a story about "the casualty rate in the fight against the American middle class" by the Star-Ledger, a New Jersey newspaper. The Christian Science Monitor, on the other hand, identifies the study's participants as "white, working-class Americans in Republican areas."
On the surface, it appears that these two news organisations are in direct conflict. However, according to a 2012 study by U.S. News & World Report on the American class structure, there may be some overlap between their conflicting classifications.
The article divides the population of the United States into three groups: the impoverished, the middle class, and the rich. The middle class, however, is divided into three sections, according to the report:
1- Working-class people. People in this category usually work in blue-collar jobs that require them to use their hands and are paid hourly rather than salaried. They also have a poor educational attainment.
2 -Lower-Middle-Income. This category is defined as "lower-level, white-collar workers" in the article, which includes office workers with lesser pay and limited power. According to the report, the majority of them have a college diploma but no advanced degrees, and their annual salary ranges from $32,500 to $60,000 ($33,670 to $62,150 in 2015 dollars).
3 - Upper-Middle-Income. The highest tiers of offices are occupied by this group, also known as the professional class. Workers in this category typically hold a master's degree and may make up to $150,000 ($155,390 in 2015 currency).
If you look at the middle class this way, The Christian Science Monitor's "working-class Americans" are essentially a subgroup of the "middle class" stated in the Star-Ledger. According to this viewpoint, "middle class" is a fairly broad phrase that encompasses people with a wide range of incomes, vocations, and educational levels. It's hardly strange that people have problems defining the phrase because it has so many different connotations.
How Do Americans Divide Themselves?
When you ask Americans what social class they belong to, their responses typically have less to do with how much money they have and more to do with how they believe they're doing in comparison to others. Even in a CNBC study of millionaires, who are wealthier than 90% of all Americans, 84 percent categorised themselves as middle- or upper-middle-class, owing to their tendency to compare themselves to other billionaires. According to another NBC News study, those who are satisfied with their life perceive themselves as higher-class, regardless of how much money they make.
For a long time, the majority of Americans identified as middle-class. However, according to Pew Research Centre polls, fewer and fewer people are doing so. In 2008, 53% of Americans claimed to be middle-class; by 2014, only 44% claimed to be. Clearly, the number of people who consider themselves middle-class is declining.
The reason for this has less to do with real income or wealth and more to do with people's perceptions of what the word "middle class" should imply. When CNN readers were asked what being middle class meant to them, the majority of the comments focused on security. A middle-class individual, according to readers, should be able to live comfortably and pay all of their expenditures without "feeling pressured." According to the Pew research, fewer Americans believe this is the case presently.
The Middle Class: A Definition
Clearly, the phrase "middle class" does not have a universally accepted definition. When individuals say they are middle class, they are referring to how they feel about their life and how they view themselves in relation to the rest of the world, not just their salary or how much money they have in the bank.
Even though a single, unambiguous definition of "middle class" is impossible to come up with, the numerous layers of meaning that the phrase encompasses may be sorted out. The idea of class is tied to money and wealth, as seen in a 2012 U.S. News story, but it also involves education and the type of job you perform. The responses to the CNN survey illustrate that the term "middle class" may have a variety of implications, including your lifestyle and how comfortable you are with your place in the world.
Income
The median household income in the United States was $53,657 in 2014, according to the United States Census Bureau, so you'd anticipate middle-class folks to earn about that amount. However, economists disagree on how close one must be to the median income to be considered middle class.
Several approaches to defining the middle class based on median income have been proposed:
- Quintile in the middle. One especially restrictive definition confines the middle class to households in the middle quintile of income, i.e., those earning more than the lowest 40% of Americans but less than the highest 40%. According to this definition, the middle class earns between $41,187 and $68,212 a year.
- Three Quintiles in the Middle. The middle-quintile rule has the drawback of automatically limiting the middle class to exactly 20% of the population. Everyone save the lowest 20% and affluent 20% would be included in a larger definition. Any household earning between $21,433 and $112,262 would be considered middle-class under this definition.
- The Reichstagflation. Former Secretary of Labor Robert Reich offered an in-between concept, according to U.S. News. He proposes that the middle class be defined as those with earnings ranging from 50% to 50% below the median - that is, between 50% and 1500% of the median income. A middle-class family may earn anywhere from $26,829 to $80,485 under this system.
- The Pew Research Center's Formula. The Pew Research Center's social scientists utilize a more complicated formula. First, they modify household income depending on family size, on the assumption that a small family's dollar travels further than a large family's. They derive a new median income of roughly $61,000 using these size-adjusted wages. Finally, "middle income" families are defined as those earning between two-thirds and twice the median income — $40,667 to $122,000. Pew researchers, on the other hand, make it clear that their medium-income category isn't the same as the middle class because their definition excludes wealth, education, employment, and social views.
Another complication is that the median varies greatly from location to location. According to a Business Insider story that uses the Pew formula to compute the median income for all 50 U.S. states, a middle-class family in Mississippi might earn anything from $25,309 to $75,926 each year. In Maryland, that same family would require a yearly income of $48,322 to $144,966 to be deemed middle-class.
CNN provides a more detailed tool that allows you to examine how your income compares to that of your neighbors in your specific county. I noticed that my husband and I were on the lower end of the middle class for Middlesex County, New Jersey, where we live, when I entered our household income for 2014. However, the same wage level would push us out of the middle class and into the upper class if we relocated to Marion County, Indiana, where my husband grew up.
The most popular metric of a person's wealth is their net worth income, but it's just half of the story. For example, a person who has recently retired after years of earning a six-figure salary suddenly has a relatively modest income, but most likely has a substantial amount of money in the bank and in investments. When you combine net worth with income, you get a more full picture of wealth and, by extension, class.
According to a Federal Reserve research from 2015, the average household net worth in the United States was $85,712 in the middle of 2015. What's less evident is how close to this average you have to be to be dubbed "middle class."
According to CNN, a methodology established by Edward Wolff, an economics professor at New York University, defines the middle class as the middle three quintiles of wealth — that is, everyone except the richest and lowest 20%. The middle class, according to this metric, includes people with net worths ranging from $0 to $401,000. Anyone who earns more than that is "rich," while those who earn less are "debt-ridden."
Occupation
Despite the fact that net worth is a more accurate indicator of wealth than income, it still only addresses one aspect of the idea of class. Your social standing is determined not just by how much money you earn, but also by how you get it. The working class, lower-middle class, and upper-middle class are defined mostly by the sort of work they do, rather than how much money they make, according to a 2012 U.S. News article.
People who work in offices are often seen as having a greater social position than those who perform any type of physical labor. Even highly qualified employees, such as electricians and technicians, are only deemed middle-class in terms of social standing, according to a 2005 interactive graphic from The New York Times. People who work in the intellectual field, such as teachers, are classified as upper-middle class, even though they do not earn as much money.
Education
Higher-status positions, which are generally higher-paying as well, are increasingly requiring a college diploma. As a result, a college graduation is frequently regarded as a passport to the middle class. The U.S. News system divides people into classes depending on their level of education, with a college diploma being required for the lower middle class and a doctorate degree required for the upper middle class.
According to Pew Research surveys, Americans are increasingly agreeing with this viewpoint. According to Pew, 24% of Americans with some college experience but no degree characterized themselves as lower or lower-middle class in 2008. That figure had almost risen to 47 percent by 2014. These individuals believed that they couldn't truly qualify as middle or upper-middle class without a college degrees.
However, economists at the Federal Reserve Bank of St. Louis believe that the function of education in social class is more complex than a clear dividing line between those with and without a degree. They suggest that a family's income and wealth is influenced by education, age, and race. A family is more likely to be poor if the head of the household is young, has less than a high school education, or is a member of a disadvantaged minority (African-American or Hispanic). The family is more likely to be affluent if the leader of the family is middle-aged or older, white or Asian, and has a college degree.
The Fed study identifies households with a head of at least 40 people based on these parameters.
1- Stragglers. Families in this category have a head of home that either has no high school diploma or has a high school diploma but is also black or Hispanic. Straggler families had a median income of $25,000 to $30,000 and a net worth of less than $40,000 in 2013.
2- Upper-middle-class. Families with a white or Asian head of household with a high school certificate but no additional education fall into this category. It also covers households with a black or Hispanic head of home who holds a college diploma. The median income for this group in 2013 was just under $50,000, while the median net worth was just over $100,000.
3- Thrivers. Families in the "thriver" category are led by an Asian or non-Hispanic white person with a two-year or four-year college degree. In 2013, thriver families had a median income of about $100,000 and a net worth of more than $450,000.
Lifestyle
What Is the American Middle Class? - Definition, Income Range, and Jobs
The news is full of tales about how hard it is for the middle class to make ends meet. Stories abound about how jobs are being lost, prices are rising, and many necessities, such as healthcare and education, are becoming increasingly expensive and difficult to buy. Politicians rush to propose remedies, pledging anything from tax reform to better schools in order to "rescue the middle class."
- Having a house of one's own
- Being a member of a nuclear family
- Having adequate health insurance is essential.
- Having new automobiles and outfits is a dream come true for many people.
All of this requires funds. According to CNN, James X. Sullivan, an economics professor at Notre Dame University, says the middle class is defined by how much money people spend on basics like food and shelter, as well as indulgences like entertainment. (He excludes healthcare and education costs, which he claims can be classified as investments.) He claims that the middle class is defined as those who spend between $38,000 and $50,000 per year in these areas and fall into the middle quintile.
Consumer advocate Bob Sullivan, on the other hand, believes Professor Sullivan's estimate for a family of four is way too low. He estimates that living a middle-class lifestyle will cost roughly $100,000 per year. Rent and utilities for a three-bedroom apartment, food and clothes, healthcare, automobile and student loan payments, childcare for the younger child, and private school tuition for the older child are all included.
One of the reasons for the disparity between these two estimations is that one includes healthcare and education while the other does not. However, geographical inequalities in the cost of living – which, like income, vary greatly from place to place – are another influence. Bob Sullivan works up a budget for a middle-class family in "one of America's major cities — Washington, D.C., Seattle, or Chicago." The cost of living in these cities is much greater than in many other regions of the country, as this Bankrate calculator illustrates.
The cost of housing is one of the most important elements in these geographical variations. When a University of Michigan student wrote an article in The Michigan Daily contending that her family's $250,000-per-year income barely qualifies them as "middle class" in her birthplace of Palo Alto, California, she sparked a big debate. She said that the major reason was that they had to spend $2 million for a "modest three-bedroom, two-bath" property.
Aspirations
The fourth approach to define the middle class has less to do with current lifestyle and more to do with future ambitions. When the Obama administration established a Middle Class Task Force to help raise the standards of middle-class families, the task force looked at several definitions of the term "middle class" and came to the conclusion that middle-class families are "defined more by their aspirations than their income."
It was discovered that middle-class families' dreams contain the following:
- Homeownership
- Ownership of a vehicle
- Vacations with the family
- Security of health and retirement
- Their children will receive a college education.
The Christian Science Monitor, on the other hand, takes a significantly different stance. It claims that middle-class status was formerly "an ideal condition of being — upward mobility combined with a level of financial stability." In other words, it wasn't so much about what you had at the time as it was about the notion of continuously rising in the world. The study claims, however, that view is becoming less widespread today, which is likely why the number of individuals who identify as middle class continues to decline.
Final Thoughts
It's difficult to define the middle class just on the basis of money. When individuals conceive of being middle-class, they don't think of a certain financial amount; instead, they see a certain way of life for themselves and their children. In one section of the nation, a wage that might buy you a comfortable middle-class lifestyle can leave you fighting to make ends meet in another.
To completely comprehend the middle class, one must look at the overall picture. Income and riches are important, but education, lifestyle, and ambitions are all important. Middle-class Americans desire stable, well-paying employment, adequate healthcare, the ability to pay their bills without difficulty, and little indulgences such as family vacations. They want to purchase a house and a vehicle, send their children to college, and retire in style.
As a result, if politicians truly want to assist the middle class, they should concentrate on methods to assist individuals with these plans. This might imply either producing new high-paying employment or figuring out how to maintain current jobs in the United States. It may also include making it simpler for Americans to obtain quality healthcare, own a home, pay for college, and save for retirement. It's difficult to figure out the best strategy to attain these objectives, yet the objectives themselves are straightforward.
Do you consider yourself to be middle-class? Why do you think that is?
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