Reply to If you are middle class (<150k HHI), how would things be different if you were rich (>400k HHI)

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I do think that middle class no longer refers to the middle of the income spectrum. Historically, in Europe the middle classes were people in the approx top 20% of the population. Just underneath the 1% who were primarily the aristocracy. The rest were the working classes, and then the outright poor.

When I consider the assumptions for a standard middle of the pack American middle class lifestyle, it means having a standard SFH, say 1800-2200 sqft, two cars that aren't junkers, one trip a year to a beach, some savings for rainy days and retirement, being able to help with college, going out to dinner once in a while - that's what people took for granted as a middle class life in the 1980s. The difference from the 1950s was that it could be had on one income in the 50s, in the 80s it was taking two incomes but it was still a middle class life.

Today? I'd think 150k is really the threshold when you can do this for a family. A family of four living off 80k in most metro area is not middle class, but working class.

There's been a lot of talk about the hollowing out of the middle classes and growing income disparities, and this is a big part of it. [/quote]

This is a smart comment, in part because it acknowledges that being "middle class" is actually an aspirational status historically. It speaks to the idea that it is possible to meet all basic needs, including leisure, without having to be a member of the upper class (either by birth or through capitalism). In fact the argument for capitalism rests on the idea that being middle class is pretty pleasant, so capitalism must be better than a feudal system, right? The professional classes (lawyers, accountants, doctors) were actually originally the middle class because they were people who had to work for a living, but lived much more comfortably than household staff, feudal farmers, miners and industrial workers. That shifted with time and now some lawyers and doctors have entered the upper classes (though many, especially lawyers, remain middle class workers).

In the DMV, 100-150k is pretty squarely middle class, depending on size of family and if that's two incomes or one. A middle class family should be able to afford to buy a home and go on vacation, for instance. These aren't things that push you up and out of the middle class. The ability to own a car or easily afford transportation is also a mark of being middle class. Being able to easily afford reasonably nutritious food is a middle class marker. So is a reasonable amount of leisure -- the ability to have regular days off from work, to take 2-3 vacations a year, and to afford new clothes and shoes as needed as well as to afford necessary car repairs and home maintenance. In order to afford all that in this area, you need a minimum of about 100k, and you aren't going to have much excess beyond these essentials until you are making more than 150k.

Keep in mind also that at this point, many if not most members of the middle class are also carrying student debt for some portion of their adult lives. In order to obtain a middle class job (the lower paid professions like librarians, civil engineers, teachers, some attorneys, etc.) you generally need a college degree and in many places also a masters degree. With the cost of education, even at in state public schools, it is challenging to get the needed credentials without borrowing. So often those early salaries of 50k or so are smaller than they look because of loan payments. [/quote]

This was always my view of the middle class, too. It wasn't literally the mean or median. It was a lifestyle somewhere between minimum wage poverty and rich people. But since everyone has their own definition for "rich", the upper bound of middle class is poorly defined. [/quote]

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