They’re Not Middle Class, They’re Well-Off, and That Should Worry You

The New York Times last week ran a piece called What Middle-Class Families Want Politicians to Know, which featured interviews from a number of Americans, discussing their economic concerns and fears. The thing is, the large majority of the households represented in the piece have a six-figure income; while there is one fellow whose reported household income is $75k – $100k annually, the rest have incomes between $120k and $400k.

And, well. In terms of income, “middle class” has a specific meaning (at least, it does to Pew Research, whose definition I’m using here): It means you earn between 67% and 200% of median household income. In the US nationally, that’s between about $40k and $120k a year — which means that nationally speaking, all but one of the “middle class” households in this piece aren’t middle class at all, they’re above that. In specific cities and areas, that “middle class” range moves, sometimes considerably — for example, in super-expensive San Francisco, “middle class household income” is $67k to $200k, whereas in rural Darke County, Ohio, where I live, that range would be between $33.5K and $100k.

When you put that local filter on these reported incomes, what you get is that some of these folks actually are middle class — but most them are in the upper half of that category, and the rest are above the category entirely. The family in Cupertino, CA with a $150k income is indeed middle class, because the median household income in the Land of Apple is $135k. Likewise the family from Stow, MA, who reports an upper range of $200k, because the median income is even higher at $137k. Ironically the fellow in Auburn, GA who reports the high end of his income as $100k is only barely within the upper bound of the “middle class” for his area, because Auburn’s median income is $54k. But the person from Wyomissing, PA reporting a $200k – $400k range is well-off no matter how you slice it: The median income there is $78k. Likewise the one from Austin, MN, who reports the same high range of income where the median income is $48k, and the ones in Kansas City, reporting a low end of $120k where the median household income is $45k.

So, yeah. The New York Times is putting its finger on the scale, here, in terms of reporting what the “middle class” is thinking. The paper interestingly printed a justifying followup on the people and families they included in the piece, which amounts to “we needed to find diverse people in different geographical areas who also had quotable things to say,” which adds context but doesn’t really change the math. Ultimately the NYT is appears to be defaulting back to “if you feel middle-class, you are,” no matter what the numbers actually say about it.

What I think is more interesting, and telling, and concerning, and what the NYT is eliding by insisting these folks represent the “middle class,” is that these are folks who are either in the upper tranches of the middle class or the lower-to-middle tranches of “upper income” — the reported income of the family in Pennsylvania might gain it entry to the 1% for that state — and they are still feeling incredibly economically vulnerable. Back in my day, harumph harumph, being upper middle class or above meant you that while you were not immune to the vicissitudes of the American economy, you had some underlying stability to your situation — you still had to pay your bills and mortgage but you didn’t worry about if you could pay your bills or mortgage. The folks the NYT is visiting are all nervous; they’re waiting for their necks to be on the chopping block. And while we must acknowledge that it’s the choice of the NYT to highlight these particular stories, I don’t think the NYT’s choice of these stories is unrepresentative of folks in these income levels today.

What changed? Well, lots of things, but I think we know some real big ones: Health care, housing and education costs, particularly in urban areas, are all manifestly more expensive today than they were 30 or 40 years ago, and the average American household carries more debt than it did even a couple of decades back (all adjusting for inflation). So even when people are making better than average incomes, their outgoes — in terms of mortgage payments, college loans, medical and other debt — are taking a bigger share of that money.

The security that higher-than-average incomes used to bring is now diminished by how we as a nation have chosen to build our current economy. And while it’s easy for the intentionally obtuse to tut-tut and suggest people just need to stop drinking Starbucks or eating avocado toast or whatever, a coffee and guacamole-free life will not change the fact that we have built the economy for the rich, not the middle — more to the point, we’ve created an economy for people who can carry debt with minimal impact on their day to day lives, or can afford not to take on debt at all. As a result of that, the income level at which economic insecurity becomes a real and daily issue looks to be getting higher as we go along. This is fixable, mind you. But weirdly there’s not a lot of will at the moment to fix it.

And so we have the spectacle of ostensibly well-off people waiting for the other shoe to drop. They’re not wrong to worry. And that is what should be worrying the New York Times, and everyone else.

52 thoughts on “They’re Not Middle Class, They’re Well-Off, and That Should Worry You

  1. One of the things that has bugged me for years now is that Savings Accounts do not offer sufficient interest rates to keep up with inflation. There are a lot of arguable reasons for this, one being that the bank-to-bank interest rate has been artificially kept very very low. But in the meantime consumers who need to borrow money are being charged extremely high interest rates, while many very responsible small business people face either picking high interest credit card dept or nothing because banks won;t make small business loans at reasonable rates anymore unless some local government is bending their arm in the form of a Program.

    How is this related? Well, I’m not sure. but I think it’s another symptom of the former financial security structures and understanding of combined self-interest that supported them having been set on their heads or thrown out with the bathwater or SOMETHING.

  2. There’s a movie (American Dreamz) where a Hollywood agent comments “Everyone thinks they’re middle class.” And I think that’s true: unless you are on the absolute outlier of poverty or wealth in this country, there’s the presumption that you’re doing average, and, well, at least I’m not homeless but also look at the millionaires, I’m not that.

    A few years back I was on a panel on “Class in SFF” and one thing that came up was how each of us on the panel, despite widely different economic situations growing up, had internalized our childhoods as “middle class”.

  3. This brings up one of my pet peeves: “Middle Income” does not define “Middle Class.”

    Middle Class should mean that you can live a stable life, get medical care, send your kids to college, take a vacation most years, save for emergencies, retire someday, etc.

    And the median income doesn’t cover that most places.

    The “average American” isn’t middle class. They’re working class. They’re “lower class.” They’re (self-managing) indentured servants to their landlords and creditors.

    (Just like we don’t talk about the growing Indian or Chinese middle class by looking at the national median income. We need to start reporting about the US like a third world country.)

  4. I do think the definition of middle class is more complicated than Pew’s definition. People at both ends will want to claim that they are middle class. $40k seems pretty low to me for the bottom though.

    For Wyomissing, you really shouldn’t be using Wyomissing’s(a rich suburb of 10k people) median income. Berks County’s median income is $56k.

  5. Savings accounts can’t keep up with inflation without something else propping rates up. The investment vehicle that generally just keeps up with inflation is 30-year treasury bonds, and since savings accounts are more liquid than those bonds, they will pay lower rates. Banks, as constituted in the United States, care nothing of social justice for their customers and everything about profits, which is why they’re constantly lobbying the Fed to increase interest rates so they can raise the interest rates they charge on loans (interest rates paid on savings are much less sensitive to increases) and pay themselves fat bonuses.

    Back on topic, the median household income in New York City is $57,782, giving a middle class range of $38,521 to $115,564. So the Times is shooting high even for its home city.

    The biggest problem with taking such a lopsided sample is that it creates a perception that the bottom half of the middle class has similar financial power, and thus if they’re going bankrupt it must be a moral failing since these other middle class families are doing fine.

    Finally, the “who also had quotable things to say” filter is going to skew higher on the income scale because wealthier people are less likely to worry about something they say winding up in print, getting read by their employer, and having an adverse impact on their primary income.

  6. Keith Graham:

    “This brings up one of my pet peeves: ‘Middle Income’ does not define ‘Middle Class.’”

    Not disagreeing but offering the observation that “Middle Class” should not then be used as the term, as it does strongly imply the correlation. “Petit Bourgeois” is probably the closest extant phrase which fits, but even that’s not quite right.

    Marshall Ryan Maresca:

    It’s politically safe to identify as middle class. We lionize it emotionally even as we aspirationally prize wealth.

  7. Thank you for posting this, John. Some thoughts:

    *A decline in union membership is one of the root causes. I grew up in the 1960s, and my non-college-educated, working-class parents and relatives had their worries but NEVER the kind of foundational insecurity you’re describing. Labor was strong then, incredibly weak now–and *everyone* except the oligarchs is getting shafted.

    *Relatedly, about ten years ago I had a gig teaching personal finance to classes of refugees. (Many of whom were probably better at it than I was, but that’s another story. :-) ) When I told them how, in the 1960s, my father could support a family of five in New York City (da Bronx) on a single salary, working 9-to-5 with no overtime, they looked at me like I was telling them a fairy story. (Later my mom got a job, too, mostly to help save for college)

    *I beg, beg, beg, everyone to watch Alex Gibney’s 1 hour film Park Avenue:

    http://www.pbs.org/independentlens/films/park-avenue/

    (Streaming free on PBS.) Really well done, a quick watch, and it connects the dots really well. (I’m a politics junkie and still learned a bunch of stuff.) Basically it shows how our current inequality is not an accident, but was deliberately engineered by a small group of villains (who Gibney names) as a form of class and generational theft.

  8. … Elizabeth Warren has a book about this…

    (All Your Worth, written before her Senate run– it’s a very good read even ignoring the personal finance advice, which is also good. It explains why even the upper middle class have become increasingly fragile, mostly dealing with needing two incomes rather than having the insurance of a secondary earner being able to go into the labor market in the event of job-loss.)

    I have some quibbles with localizing income quartlies to such small areas– people in Atherton could instead live in Menlo Park or Redwood City– they choose not to and are able to because only wealthy people can afford to live in Atherton. Auburn’s numbers are misleading because so many of those lower incomes are full-time graduate students who are not credit constrained to the same extent non-students with the same low incomes are. And so on. MSA-level adjustments make sense, but also need to be adjusted for university towns.

  9. This post seems to flirt with the idea of class warfare, but never comes out and makes a point. Are the well-off people nervous because wealth redistribution will leave them poorer, or because late stage capitalism increasingly means if you’re not one of the mega-rich meths then you’re one illness, car accident or missed payment away from dropping down to the prole levels?

    American middle class is confusing. There seems to be an attempt to make everyone middle class. It would be easier if the definitions didn’t include specific incomes. If you are paid hourly, you’re working class. Salaried are middle class. Own companies and land, then you don’t get paid at all and you’re upper class.

  10. I think this phenomenon is related to a thing I often note: There is a difference between someone who earns a good living by actually working, and someone who has money from what amounts to endowment income.

    “Professionals” (e.g., doctors, lawyers, engineers, etc) are what I call “working wealthy.” Most of their income is literally from their paychecks for the work they literally do. They may have nontangible income in the form of employer-provided health insurance, retirement fund matching, employer-provided transport or parking, etc. (And of course half their Social Security payments covered by their employer.) But those are “things they don’t have to spend money on” and “things they can’t touch until they’re retired,” not cash they can use right here and now.

    Contrast with rich people who have a trust fund, or own a lot of real estate from which they collect rent. Some of them do work as well—a CEO of a company does in general have to show up at an office and do things—but their primary source of income is either the interest from investments (which might pre-date their birth!) or collecting payments from established sources that no longer require the same level of personal involvement. A big landlord hires property managers; she doesn’t go down and check out the buildings herself. She just takes her $ for legal claim to the ground the building stands on.

    People with the latter form of income aren’t worried in our current economy. Land is always valuable unless there’s a major event wiping out potential tenants (but Europe has demonstrated the setback is only temporary, and the grandkids will still own half of Florence). Our current economy is operating on a dividends-paying scheme that is keeping rich investors rich (while stock market crashes can wipe out some people, plenty of rich folks simply ride it out).

    The “professionals” are in the weird spot. They have plenty of money…for now. They can ride out most forms of setback…usually. Specialized knowledge is marketable until the folks who need it flat-out can’t pay for it. Doctors are dependent on collecting fees from insurance companies, but insurance companies currently are more focused on giving that money to their investors than to doctors. Lawyers collect fees from their clients, but if the only folks who can afford lawyer fees are rich folks, that’s a smaller pool of clients, and the market of lawyers gets oversaturated and we have a lot of unemployed lawyers.

    We have reached a point in the economy where “work” isn’t enough. A paycheck, no matter how large, is vulnerable, and our oligarchs have made it clear that everyone is expendable, at any time. Even if you work for Big Tech, unless you’re in the inner circle of CEO/CTO/CFO/etc, you’re replaceable by a jillion other young hotshots who talk a good game and can throw code. Or the whole company can crash and burn.

    And if you lose your job, you lose…everything. The health coverage. The retirement fund. The ability to pay your mortgage. If you’re high-earning enough and prudent, you might have a year’s worth of cash to cover you (ha ha ha ha very few people have this!), but even that might not be enough to hold you until you get another job. You may be forced to take a job that pays rather less than you were getting.

    This is where we’re at. No one feels stable. Even if they’re okay now, they know they’re not safe. They probably don’t have enough saved up to get them to the end of their life, if for some reason they aren’t able to get a job again. (The older end of Generation X is deeply in this space.)

    This is a sign of a sick economy. The rot of insecurity has made its way all the way up to the last step before the inherited-wealth oligarchs.

  11. $16,000 income here, self induced. Wife and I sold every asset we had, paid off every debt, moved on our boat and left North America (Mexico in included) over two years ago. We are surviving very well. If we have a huge expense, we suffer until we have enough saved up. The caveat is if we lose the boat, we have lost everything. We are in our 40’s and 50’s and cruising the West indies and Central America.
    It was not until we looked back after a year and realized how bad, how the whole scheme of things is rigged against the blue collar getting ahead. Banks do not like being used as a clearing house for our meager pensions. Stores push for credit scams, er, I mean schemes like don’t “pay now”.
    I could go on and get all preachy, but I have to put a portlight back in before the monsoon starts here in Guatemala. It is not all iced drinks and coconut shell bikinis.

    Allan and Ellie

  12. Ian McGowan:

    “This post seems to flirt with the idea of class warfare”

    In your head it does, perhaps. I’d rather not have warfare, class or otherwise. And anyway one doesn’t need to have warfare to extend a framework of economic security, especially when one realizes that doing so would still leave the rich, rich.

  13. I think the critical point here is that income, at whatever level, does not provide security. Wealth does. Someone making 300k who also has $300k of expenses and nothing in the bank is living hand-to-mouth, and may actually be in a more precarious position than someone at a lower income level because a new $300k job is tough to find.

  14. If this post flirts with class warfare, where do I enlist?

    The Times’ idea of middle class is a joke, which explains how the politicians have it all out of whack. They claim that wanting affordable education, health insurance, and a freedom from crushing debt (student loans especially) are liberal pie-in-the-sky, but those are very real issues for the REAL middle class, and what is stopping upward mobility in most cases.

    But again, New York City “middle class” is much higher than the rest of the US.

  15. I guess “middle class” does imply “middle income”, but I like the older, actually class-based, definitions:

    * Working class: Unskilled/semiskilled labor, few assets
    * Professional class: Educated, income from job, some property
    * Upper class: Income from land/investments

    In this scheme, “we” are mostly middle class: college educated, usually have jobs, might own a house, no significant investment income.

    That used to be considered enough to be “comfortable”. Not so much any more.

  16. –E has it exactly right above – the few that are not stressed are the ones that rely on unearned income. The focus on income of the top 1% to some degree misses the point – the net worth at the break point (entry to the top 1%) is about $8-10M, average is $26.4M. With income being about $500k to be in the top 1%, there’s a huge disparity between working rich and rich rich. And the ultra-rich are at another level again.

    For security, it’s net worth, not income, that’s the driver. The 1% owns ~40% of the net worth, top 20% owns 90% of the wealth. That’s what drives the insecurity in the 80%, I think.

    Not sure what you do about it – the wealth tax would be a nightmare to assess, but raising investment income taxes would hit some pensioners unless it was done carefully.

  17. @Not the Reddit Chris S. We have a wealth tax… most years… it’s called the estate tax and it is extremely important even though it hits very few people. That sure could use some bolstering.

    @Cool Bev There’s a huge difference in that “professional class” between, for example, a humanities professor at a regional school or a teacher in a non-union state and those of us making more than 6 figures. Money matters! Not having to worry about it makes a huge difference. In the historical fiction I read, the former would be the genteel poor. Which is an odd way to grow up, in my experience. Much prefer being the educated high income.

  18. Cool Bev: I don’t think this is quite right, if we are talking about the English system of, say, the Victorian era.

    In that context, the upper class, a/k/a the gentry, descended from the old knightly class. The ideal was to live off rents from your tenants, but there had always been younger sons. So there was a dispensation for certain professions. You could be, and indeed by definition were, a gentleman and be a military officer, clergyman, lawyer, or physician.

    Jumping to the other end, the working class was descended from the old peasantry, possibly still working the land,or often relocated into a city as a factory worker. Also miners and various other similar occupations.

    The middle class was the odd man out group: not gentry, but clearly not working class. Typically the income came from some sort of commerce: not direct manual labor, but not work suitable for a gentleman. This might mean owning a shop in the village High street, or it might mean owning a vast shipping firm undertaking worldwide commerce. In later years a bank clerk, for example, was definitely middle class.

    Income level was not the defining characteristic. That local shop owner might earn less than a yeoman farmer who worked, perhaps along with hired hands, his own land. That international merchant would be considerably richer than most gentlemen, who would naturally despise him. Once that bank clerk had some seniority and held a higher position, he might well have a higher income than the gentleman living off the income from his inheritance. It was true in the aggregate that the typical middle class person earned more than the typical working class person, and less than the typical gentleman, but there was much fuzziness at the boundaries.

    Of course none of this works if we are talking about 19th century American society. They borrowed the vocabulary, but not the social structure. Much confusion ensued about what these terms actually meant. I recall reading a complaint that a waiter in a restaurant will describe a customer as a ‘gentleman’ if he leaves behind the change from his bill. That was held up as an abuse of the language. The discussion we are having now is really just an extended version of the old confusion.

  19. The great triumph of political evolution, particularly in Europe and North America, used to be the de-coupling of wealth and political power. Monarchies and/or older versions of oligarchy were essentially the straight confluence of wealth and power: Those in power grabbed all the wealth; in order to have power, you had to have a certain level of wealth. It was self-perpetuating and very stable.

    And good for the very small minority who enjoyed that wealth-coupled power. Sometimes they even aspired to improve things for the vast array of non-wealthy folk in the middle and at the bottom. Generally, however, more effort went into preserving their monopoly from the threat of churning just below it- whether that was the successful leaders of military adventurism, or a rising merchant class or whatever.

    Parliamentary democracy didn’t achieve truly effective decoupling until the late 18th or early 19th centuries in Britain- about when representative or plural democracy arose in America and (briefly) France. By the end of the 19th century the benefits of decoupling wealth and power were apparent enough to be a real threat to older systems.

    Decoupled systems and the social mobility they provided enabled a much wider pool of talent to flourish and a much stronger sense of engagement and investment between citizens and their leaders.

    But those with wealth have never stopped trying to recouple power to wealth, and in today’s world, aided by shrewd and well-equipped-for-the-purpose autocratic regimes, they are succeeding. We’re sliding backward into the wealth/power monopoly.

    It’s not the first time it’s happened. France in the 19th and early 20th century went through several back-and-forth waves of decoupling and recoupling. Some were relatively peaceful. Some not.

    When “not” is the case, it rarely ends well for anyone.

  20. I became interested in class as a concept a few years ago and began reading a number of books on the topic (one of the joys of retirement, being able to intellectually pursue something you find interesting). I realized after some confusion that there were different definitions of “class” depending on who was writing–

    Economists talked about class in terms of wealth and income, mobility between economic quartiles.
    Sociologists talked about class in terms of education and occupation.
    Anthropologists talk about class in terms of culture, values, and mores.

    A big, big, big problem in articles and discussions about class is that people use the different perspectives interchangeably. A college professor from a family of academics can be working class economically while upper class socially. A blue collar worker can be upper middle class to an economist while lower class to an anthropologist. It’s important to understand how the term “class” is being used in any individual article, book, or discussion and not toggle between them.

  21. I’m living on a pension and Social Security; I consider myself relatively well-off because I have NO debt. Don’t own a car, pay my credit card off every month. No more travel, no TV, 9-yr-old laptop. But I don’t lose sleep over how the rent gets paid, and I eat well (too well sometimes, sigh…) But 20 years ago, or even 10, my resources would’ve gone much farther, and everything goes up except my pension. So it’s a race: I’m hoping I die before I have to become homeless. It’s no sure thing.

  22. @nicoleandmaggie – to some degree, agreed on inheritance tax, though there are huge loopholes in that (step up in basis on inherited assets being the main one). For a large estate, it takes a couple of years to work through everything, I’m not sure how that translates to an annual wealth tax, and a lot of countries that had it have abandoned the idea. I’m not sure how you tackle huge reserves of non-productive wealth ($50M parked in a painting doesn’t do anyone any good, same for cars and other high value collectibles where the intrinsic value is disconnected from people with too much cash outbidding for items).

    Any ideas welcome!

  23. Wow, this makes me feel a lot better (personally). Hillary Rettig hits it right. My mother in law was a teacher and all three of her daughters followed in her footsteps. My wife taught for 34 years, and between her pension and TDA account, we do not have the financial worries so many do. Add in Social Security and small inheritances, and we live very comfortably – in our own style, I must add – in NYC. No kids, no college costs, no mortgage (we have always rented), bills paid in full. We even get Medicare Part B costs reimbursed by the city, and prescription bills partly paid by her union. Yes, we are incredibly fortunate, only partly through planning over the years. And we have not had to scrimp in a long time. We traveled to Britain (and occasionally other European countries) every summer for 35 years.

    But our generation tended to get one job and stay in it, and by fortune we had the right one. (I worked at home most years, dealing in secondhand books.)

    We do worry for our nieces and nephews, not to mention the country in general.

  24. Have to think that the anxiety the members of the middle class are feeling is in large part due to the dumpster fire at 1600 Pennsylvania Avenue. When the usual norms are so grossly violated, it makes you feel less secure no matter how well off you might be personally.

  25. The Times presented family circumstances across seven states: AZ, CA, GA, MA, MO, MN, and PA. Three coastal. Four Interior. From best to worst in terms of income inequality, only two—MN (9th) and MO (24th)—are in the top half of states. The rest reside in the bottom half: PA (27th), AZ (31st), MA (37th), GA (43rd), and CA (48th). Not that the gini coefficient can explain a damn thing about the individual circumstances of a single family, but interesting nonetheless.

  26. I’m not sure where this relates to the definitions of terms (middle class/middle income etc.) But- there are real numbers that allegedly reflect realities (which are now way out of wack)

    a full time earner, employed at the minimum wage should be above the poverty line (or at least close). An earning amount that would tend to indicate a degree of self sufficiency/ not relying on public aid etc. This isn’t the case (which means either expenses are too high in our country or the minimum wage is too low) – a family of 4, poverty line is about $26K so you need $13/hr – federal minimum wage is $7.25

    a middle class family (in my personal conception of what middle class is) makes enough to pay for their own expenses, and have some degree of stability/security (financially) That means that they make somewhere around median income (or a statistically significant range around it) and are well above the poverty line, they have health insurance from their employer, their kids need to take out loans to go to college…but college is feasible, etc.

  27. @Ed Ashton makes a good point: “I think the critical point here is that income, at whatever level, does not provide security. Wealth does.”

    Which would explain why people with big paychecks feel uncertain. I will point out that wealth can be built if one spends less than one earns, and invests the remainder. This is known as “saving” and seems to be something else that has been forgotten by the current generation.

    There are some who really need all of the big paycheck, but there are many who don’t but spend it all anyway.

  28. Steve C. is correct in his assertion the “dumpster fire” and the violation of social norms may be contributing to the collective angst in this group. I would offer, however, that their witness to the toll that 30-odd years of “outsourcing” and “rightsizing,” the gospel of “shareholder value creation,” and the erosion of their purchasing power is a far greater source of that anxiety…particularly that the effects of that schema are starting to edge closer to their demographic. Those folks, despite the contention that they are middle class, are starting to inhabit the land of second-tier labor and are feeling the discomfort that comes with being a paycheck away from tough times and job security that depends on the whim of a cadre of executive management who considers them a drag on their ability to receive their quarterly bonus, no more worthy of consideration than a stray dog (note that the former second-tier folks are in a third tier labor market that is royally screwed now).
    We have indeed reaped what we have sown.

  29. And this reporting skew is part of why liberal media is thought of as “elitist”. The actual middle class is facing extinction and the Times is printing the vicissitudes of folks who are making twice what they are making. OUT OF TOUCH.

  30. Harry points out the importance of saving. Factoid: 11 of 12 moonwalkers were Boy Scouts. Factoid: “A Scout is thrifty.” Meaning: The Scout had to show he was saving money, even if by collecting bottles to cash in. Whatever happened to the word thrift in America?

    I like how people are adding to the conversation by noting a book or TV show or article. I shall too.

    Queerly enough, my two favorite books on the socio-economic status of the US are both by aliens. One (which I blogged about in May of 2015) is by a columnist, living in Washington, for the Financial Times, called A Time to Start Thinking subtitled America in the age of descent. Edward Luce argues that the US middle class is being reduced relative to other classes.

    I hadn’t known the capitol lunchroom was designed to get Republicans and Democrats to mingle. But today the room is mostly empty due to newer demands on the politician’s time.

    Another, 2018, promoted by my local indie bookstore, is by Gwynne Dyer called Growing Pains subtitled “The future of democracy (and work)” Dyer links income disparity to various nation’s (in time and space) decline and fall. It could be argued that the lower degree of populism this year in Europe (compared to the US) is due to their lower degree of disparity. (Canada fits between the two areas)

  31. Excuse me, writing above, I spoke with a silly lowered voice and lowered consciousness when I said in brackets that Canada was between the two areas.
    On sober thought, I don’t believe so, although hey, it would be a good conversation piece for talking to tourists in the US, after, say, asking Canadians if socialized medicine is working out for them.

  32. “people who can carry debt with minimal impact on their day to day lives, or can afford not to take on debt at all. ”
    I got lucky, sort of. When Dad died I inherited enough money that I could survive without a job for 5 or 6 years. Or pay off the mortgage, but that would leave me without a reserve fund. Prior to that I was paying my bills, and saving a bit in a 401k. I may never have enough to retire though.

    On class warfare, a lot of the rich seem not to realize that marginal tax rates and inheritance taxes are guillotine insurance.

  33. For me the key is the insecurity of health care. I am 62 and retired. I was conscientious about saving and had a good income all my working life so I am currently quite comfortable – $2+ million saved, house nearly paid off, no other significant debts, etc. So it sounds like I’m wealthy. However, I depend on private health insurance through ACA. As long as that is available, I’m fine and no worries. However, if that goes away, I’m one significant medical problem away from real trouble. I fully realize that I am way better off than the vast majority of people. I try not to whine but as long as the GOP is doing their best to make sure that I can’t buy health insurance, I cannot be really secure.

  34. The big five have crushed the middleclass over the last 40 years. Banks, Insurance companys, Wall st , and Hedge funds have crafted laws to funnel the cash to the top. (Toss in the government for siding with these folks and you have inequity) The middleclass has been cut by 1000 slices or more. From massive taxes breaks to changing how ( if your lucky) your pensions plan calculations are figure out. The wealthy will not stop taking. While the wealthy estate taxes were improved and their tax loopholes were protected, yours were closed. Just the standard tax deduction that probably isn’t adjusted for inflation when that hits within ten years. The masses are struggling,and most do not have the time or the wherewithal to peel back the layers of the onion to connect the dots. Some of the social security loopholes for the middleclass were closed and now your 401k is a bank for the wealthy to grab to offset the great tax break they received.
    Good article from the WSJ https://www.wsj.com/articles/congress-is-coming-for-your-ira-11562713559?mod=searchresults&page=1&pos=9

    The latest in another money grab, and we wonder why everyone the middleclass feels insecure. I can’t even plan anymore with the constant changes in laws to benifit the wealthy. Fascism maybe around the corner if it isn’t already there.

  35. “And this reporting skew is part of why liberal media is thought of as “elitist”. The actual middle class is facing extinction and the Times is printing the vicissitudes of folks who are making twice what they are making. OUT OF TOUCH.”
    This is not news. I’ve been reading articles and op-eds since the 1980s that discuss the terrible struggles of the “middle class” family with only a $100,000 a year income. It’s particularly annoying since a lot of such articles treat luxuries as fixed costs: having an expensive apartment in NYC plus a vacation home plus putting your kids into a top flight private school is a huge drain even on $100,000 a year! I think it’s one reason people in very high income brackets see themselves as middle-class or at least not-rich — even a million dollars doesn’t let you buy everything you want so millionaires aren’t really rich.
    So despite John’s recommendation I didn’t read the article.

  36. frasersherman:

    “even a million dollars doesn’t let you buy everything you want so millionaires aren’t really rich.”

    I mean, I think it depends on what you want.

  37. I was just thinking about this this morning while out walking. Jim has been in every “class” – poor, lower middle, middle, upper middle and now “not quite rich but very comfortable.” I’ve never been poor, but have done the low middle, middle, upper middle and “now” along with him. We remember what it to live with/without money, and your expectations of what’s affordable was always different (and I know you, John, have had the same experience).

    I think one thing that was quite different years ago vs now is health insurance. The ACA was supposed to smooth out insurance issues, but particularly since Trump came in, everything is worse. Back in 1978, Jim was a Catholic school teacher making $8,000 a year. We didn’t have a car, our TV was borrowed, and we got turned down for a Master Card. But…I needed major surgery that year. His insurance covered everything. We didn’t pay for anything (we were so careful with money I didn’t pay the $2 a day TV rental). These days, people making a poor salary usually also have crappy medical insurance, meaning lower middle class people today more easily get wiped out by non-covered medical expenses.

    When the Times writes articles like this, they need to talk to people who really remember what it’s like to live in different classes. We remember. And we know it’s possible we could be in that situation in the future.

  38. In a twist, I grew up thinking of myself as “working class,” though I am sure somebody somewhere would find a reason to call me “middle class.” (In fact the mayor actually did call me middle class in high school, but I doubt if he bothered to actually find out.)

  39. And one of the reasons for that insecurity you mention is that that middle income in Cupertino CA could not possibly be enough to buy you a house there without going into crippling and property-tying debt.

    Regarding class warfare, it’s the rich who are conducting class warfare. What articles like this are doing is merely pointing it out.

    Agreement with rrhersh that class in 19C and earlier Britain was a matter of social construct and had nothing to do with income. The cash-poor landholding rich (also a common phenomenon in colonial America) and the impoverished middle class were common features, as were the nouveau riche whose immense wealth did not earn them a rise in the class system.

  40. My parents enjoyed job security, full paid medical coverage, no college debt, the ability to support a family of four well on one full time salary, and generous pensions.
    We have seen layoffs, inadequate or no health coverage, minimal college debt, the ability to support a family of four with two full time salaries, and not enough pensions to ever retire.
    At the rate things are going my kids will be lucky to find work with no benefits on short-term contracts that will cover some of their college debt.

  41. You either marry it or inherit it. Not many exceptions.
    Middle class income per family averaged across America is a $100,000 a year. Until couples reach the age of 50, they’re concerned about monthly costs not long term planning. Food, utilites, taxes . After 50, health costs, education and retirement become important. And here’s the truth. 8% of American couples last 40 years. 5% make it 50 years. Death and divorce are the killers. Life’s a crap shoot and you need a lot of luck and money to reach retirement with your health and enough guarranteed income to maintain your life style for the rest of your life. Not many make it folks!

  42. I live in Northern Virginia which is one of the wealthiest areas of the country. I think John is correct on some things about the instability of jobs. I work in tech and it’s all hire/fire cycles. I stay in this area so I can get a new job when it happens. There is a lot of work around here. Not all jobs are the same. More and more are temp jobs. Some temp jobs pay a lot of money, but are risky. I did the temp thing when I was younger. Made a lot of money, but was too stressful. Not all temp jobs pay real well. Been laid off several times. I always find new work. Found a new job the next day before and other times its taken 5 months (longest was when i got laid off right after 9/11). Now its generally 2-3 months due to hiring cycles in tech taking longer (they do a ridiculous number of interviews where I get asked the same questions over and over again). However, because of this I am a big saver and over the last 20 years, I have accumulated a large nest egg to the point where I expect to be able to retire in my mid 50s if I choose to.

    People around here get insulted when I tell them how much wealthier we are than the rest of the country. People with big houses and big incomes get mad when I say they are not middle class. They literally go ‘just because I can go out to eat when I want and go to a doctor when I want does not mean I am above middle class’. Rich means you have servants and own airplanes. We also get the ‘as someone with 2 kids in private school BS…’, in an area with some of the best public schools in the country. No pity for these people.

    Not everyone is well off. However, I see massive lifestyle inflation around here. I bought a small house 15 years ago. I could easily get a much bigger loan and ‘upgrade’ my lifestyle. I’d rather save the money. I see couples where they each make 6 figures live pay check to pay check. I know kids are expensive and all, but you dont need 2 brand new cars that are $40-50k each either. You dont need a 4000 square foot house in an area this expensive. This makes no sense to me considering the hire/fire cycles in tech. Especially in government contracting. All government contractors are project employees and it is hire/fire. Note, there are a lot of jobs, but hiring cycles get longer and if you want a decent commute it might take longer if you want to be choosy. You could also get sick and not be able to work.

    I think part of it is that jobs don’t last, but part of is that too many people who don’t need to live pay check to pay check frivolously waste their money on bullshit. I spend about the same as I spent when I bought my house 15 years ago. My income has gone up. So my savings have gone up. My nice safe index funds have gone up. My medical expenses have gone up as I have gotten older, but my regular expenses are the same. I don’t have a need to frivolously buy stuff. When I see people who go ‘i saved so much money at this sale’. I think I save more by not buying the bullshit you just bought. Its just stuff. I have a dresser that was my fathers as a kid. It has drawers. They open and close. Its fine.

    I see this a lot with high paid tech workers. Someone shows up in a new $50-60k car. Wow great car. They are all giddy with all the money they spent. Its a car. I hit the gas it goes. I hit the breaks it stops. I can get why you want a bigger car if you got kids, but dude. I have had conversations with people who say ‘well when you make more money you just end up spending up’. Yeah because you can’t control yourself.

    You would think that with more job instability more people around here who make this kind of money (and often with 2 people making six figures each) would look to save money. I see saving money as stress relief. Its my fuck you fund. Why spend it? Its better to save it. The investments go up. We would have less stress on the the welfare state liberals created if more people at my income level focused on saving and safely investing instead of frivolously spending money.

    Note: This is in reference to people who make very good incomes. I know most people who read this are not in that category. Even with the cost of living around here, the median income puts people into the upper middle class in my opinion. I do find it funny that this is a blue area and people who make a lot of money cry about living pay check to pay check and act like they are equivalent to someone stuck working at Walmart.

  43. I agree with the people saying that we Americans think everyone is middle class unless they’re homeless poor or filthy stinkin’ rich.
    Over a thirty year employment I worked my way up from around $10K income to around $40K. In the latter years, it pleased me to note I was above the median income and therefore was one of the wealthiest people in one of the wealthiest countries on the planet.
    Full retirement from my employer was half of the average of your three highest paid years, so now I am living on about $20K, whilst median income has gone up considerably. My house is paid for, but property taxes go up and up. My income will go up considerably when I sign up for Social Security, probably at 70, unless everything falls apart before then. I do figure I can always spend less on food if prices get too high.
    All in all, though, my mother only lived into her late 70s, so I figure I have money enough to last the 15 years I can expect to live. In fact, I have been known to say that I have more money than time at this point, and to use that as an excuse to spend on pets and hobbies.
    Also, I agree that whether you are wealthy or not depends on how much you THINK you need.

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