In the last week, two articles about economic classes have caught my attention. One had to do with what income was required to be truly middle-class and the other was what is needed to be considered upper-class. The news isn’t good for most of us.
First of all, most of us like to believe we are middle-class and, depending on one’s definition, most of us are. But, consider this definition. Middle-class is being able to have achieved an advanced education, purchase a quality home for yourself and your family, drive decent vehicles, take your family on frequent quality vacations, eat well, have access to quality medical care, provide your children with advanced educations that don’t leave them with a ton of student debt, permit retirement at a relatively early age while leaving you enough savings and investments to live a lifestyle similar to what you have been used to. Are you finding it difficult to fit yourself into that definition? This is not where most of us find ourselves and to have all the above one needs an annual income of approximately $235,000.
Being middle-class is also related to where one lives. If you live along the coastlines you’ll need to earn more money than if you live in the backwaters of middle-America. Most Americans earn around $55,000 a year and those who live in places like New York City or California bring in over $100,000. All are far cries from that magic $235,000.
Now, look at what one source of information has to say about being upper-class. Pew Research Center did a study and found that 19% of Americans live in “upper-class” households and that the average income was $187,872 using 2016 dollars. What constitutes upper-class is going to be affected by where one lives and the size of one’s family. Here are their numbers:
Household of one: Minimum of $78,281 to be upper-class
Household of two: Minimum of $110,706 to be upper-class
Household of three: Minimum of $135,586 to be upper-class
Household of four: Minimum of $156,561 to be upper-class
Household of five: Minimum of $175,041 to be upper-class
Pew uses different definitions of economic classes than that I mentioned earlier. They define upper-class as being more than twice the national median. Pew considers 52% of Americans to be middle-class with median incomes around $80,000 and 29% lower-class with median incomes around $26,000.
It soon becomes obvious that there is great disagreement about economic classes and maybe it is more about one’s mental attitude than one’s income. Nevertheless, most economists report that the American middle-class has been in decline since 1980 while at the same time the wealth gap between the rich and others has greatly widened. The recent Trump tax cut has resulted in the continued widening of the gap.
Americans have never liked to accept the reality of their position in society and have long held to the belief that we can all move up the socio-economic ladder. I don’t have to look too far to know that such is just not true and as always, it remains a myth.
While there are many rags to riches examples the reality is that most people are born into an economic class from which they will never escape. In my family, my brother and I were among the first to acquire college educations and we didn’t do it totally on our own. Our parents were working-class people and couldn’t afford any help with tuition. Our help came from having served in the military and becoming eligible for the GI Bill of Rights. Also, both of us moved to states where higher education was better supported by state governments. Given that real wages have been mostly stagnant since 1980 and the cost of education has skyrocketed, the chance of upward mobility is arguably no better than it was when there was a strong middle-class in America.
I suppose my conclusion is that none of this is going to get better if we continue to cling to the myth that we can all move up if we just work hard enough. Moving on up to the East Side is far more complicated and difficult than just brow sweat. While one can’t pick who their parents will be they can pick politicians and governmental policies that will create a more level playing field. With that in mind, there has never been an era in which the wealthy shared their wealth without being made by egalitarian governmental policies and programs. When the government keeps its hands off the rich the wealth gap always increases.