The Middle Class

Who's in and who's out

Photo by Zac Gudakov on Unsplash

Who’s in the middle class? If you’re an American, pretty much everybody. From those scraping to get by to those deciding whether their second home should be near the beach or on a mountain, almost everyone seems to want to describe themselves as “middle class”. At the bottom end, the middle class consists of people who aspire to be there. At the top end, people insist on describing themselves as “upper-middle class”, even if they are in the top five percent of households. This might not sound like much of an issue. Does it matter what people describe themselves as? Yes, it does.

For starters, it fosters an incorrect view of history. I don’t want to dunk on random people on Twitter, so I won’t provide links, but there is a constant stream of people posting about how the middle class in America is doing worse than they once were. As evidence, they point to how they grew up in a middle-class household and could afford nice houses and cars and vacations. Someone even posted a viral tweet of the house from the original “Home Alone” movie and tried to describe it as a middle-class house. This is just plain wrong. The McCallister family is rich! The house from Home Alone sold in 1989 for $875,000. In fact, there is speculation that the McCallisters had to be part of the mob to be able to afford not only a beautiful house, but to also take the entire extended family to Paris. Beyond this admittedly extreme example, there are plenty of other people who seem to think that in the 1990s everyone in the middle class could afford to go to Europe once a year. There were plenty of Americans who could afford to go to Europe every summer in the 1990s. Upper-class Americans.

More importantly, those who think everyone is in the middle class start to advocate for bad policies based on their incorrect views. For someone who thinks the middle class used to have access to everything they wanted, but now only the upper class does, it makes sense to believe something went wrong in the interim. Therefore, policy should adjust to get us back to how things used to be. The problem is, of course, that things never used to be that way. A great example is this article, which insists even those who make more than the median household income aren’t middle class in most states! What nonsense.

The root of the problem is that “upper class” has become synonymous with “rich”. “Lower class” has become “poor”. They are not the same, and it’s important to recognize the difference. Every poor person is in the lower class, but not everyone in the lower class is poor. Every rich person is in the upper class, but the vast majority of the upper class is not rich. Worse yet, we are nearing the point where “upper class” is becoming synonymous with “very rich”. I’ll never forget this article from the New York Times, where the rich (and super-rich) refuse to describe themselves as such. These are people with million-dollar incomes:

My interviewees never talked about themselves as “rich” or “upper class,” often preferring terms like “comfortable” or “fortunate.” Some even identified as “middle class” or “in the middle,” typically comparing themselves with the super-wealthy, who are especially prominent in New York City, rather than to those with less.

When I used the word “affluent” in an email to a stay-at-home mom with a $2.5 million household income, a house in the Hamptons and a child in private school, she almost canceled the interview, she told me later. Real affluence, she said, belonged to her friends who traveled on a private plane.

I think most would snicker at the idea that to be “affluent”, one must travel on a private plane. But many who would criticize need to look in the mirror. They probably do the same with “upper class”, saying that one has to have a vacation home to be upper class. The reality is many in the upper class don’t have vacation homes, and this thinking has caused mass delusion. There are legions of millennials out there who were taught that they were raised in a “middle-class household” and can’t figure out why their standards of living don’t match their parents’. The truth is that they were likely raised in an upper-class, but not rich, household, and now they are part of the middle class for the first time. This fosters a specious sense of injustice and pessimism that only results in misplaced anger.

So what constitutes the middle class? There are two different ways to categorize it. The first is to define the middle class as a percentile range; the most common is to say anyone in the middle 60 percent of household incomes is in the middle class. Those in the bottom or top twenty percent are in the lower and upper classes, respectively. The other method is to define the middle class as those who are within a certain monetary distance of the median household income. Pew Research, for example, defines the middle class as any household that earns between two-thirds and double the median household income.

Both measurement methods have strengths, but I prefer the latter. The problem with defining the middle class as a percentile is that it means there will always be X percent of people in the middle class. As society grows more or less unequal, the size of the middle class never changes. But having a strong middle class is generally thought to be good for society, so therefore it can’t always be the middle 60 percent of earners, otherwise the middle class of a society could never become stronger or weaker.

Let’s use the Pew Research definition. Those that make two-thirds to double the median household income are middle class. In a society of high inequality, the middle class will be small as people are pushed into either the lower or upper class. In a society of low inequality, a large majority will be in the middle-class range. How big is that range? Not nearly as big as most would like. The United States varies greatly in cost, so I think it makes sense to break it down by state. Below is a table showing who counts as the middle class in each state:

Source.

The result is a list that will make a lot of people angry. Someone sitting in Chicagoland with two kids and a house in the suburbs will see that, according to the table, a household income of $200,000 puts them firmly in the upper class. They will say that how can they be upper class when they only have one home and can’t afford all the renovations they want, let alone go on a trip to Europe every year.

I know I’m fighting a losing battle here, but to those who are thinking that upper-class households can all afford to gut their homes and go on intercontinental vacations, you’ve just proven my point. Rich people get to fully renovate their homes. Rich people get to stay at four-star hotels in the French Riviera or Positano. Remember, only about two-thirds of Americans even own a home. Barely half even have a passport, let alone use it. Those that own a home and go on international vacations are firmly in the top half. Now, those with homes and passports generally congregate with other homeowners and passport holders. So it feels middling to not have a big home and go on big vacations. But being in the middle, or even the bottom, of a privileged group is not the same as being in the middle of society.

Again, upper class does not equate to rich. Upper class means that someone is making significantly more than the median. The two-thirds to double definition of the middle class is already fairly large. The national middle-class definition proves this. The middle class, using the median income for the entire United States, ranges from $46,117 to $138,488. It is already a tremendous stretch to say that these two incomes are in the same income class. Those making $47,000 are living far different lives than those making $135,000. For those who still disagree, think what you could do if your own household income were to double.

See? You would live in a different world.

The middle class is just that, the middle. Those at the bottom of the middle class probably can’t afford a home or are sinking everything they have into a modest one. Those at the top of the middle class have all their needs met and some money left over for luxuries. Those that are doing better than that, congratulations! This post is not meant to bash those that are doing well. It’s to make the point that those who are doing well should recognize and appreciate what they have.