The definitions of middle and rich in the report are pretty close to made up. In the latter case, the study literally uses "people who identify as rich".
The study appears to define "middle" as 90% of respondents, which is laughable. Everyone thinks of themselves as middle, no matter how far from the actual middle they are.
The obvious definition would be percentiles of income, or wealth, or other measurable advantage. This would put a lot of readers in an upper class, as which people really don’t like to think of themselves.
For what it's worth "Upper middle class" is a pretty widely used classification. I couldn't give a technical definition and don't even know if one exists, but as someone a little younger it's always seemed like a semi-cohesive group. People who are able to attend private schools and $160/4 year college programs, whose parents can float them a little if needed, who have a certain range of hobbies (e.g. yoga, skiing), who wear a certain range of fashion brands, who typically live in certain neighborhoods of cities. Some of those properties on their own don't define the group, take it as a whole. It's basically where your family is doing well and set you up with a lot of opportunities, but you're not extremely rich and you still have to work. It's most people I went to university with (which is a competitive, expensive one), and it's most people I know paying market rate rent here in SF.
Are you from outside the US? I've never heard this attitude in the US, but have heard it multiple times from people from other countries (often the UK).
Here in the US I've heard families earning from $30k to $200k, working jobs from manual labor to white collar, call themselves "middle class."
The definition of middle-class is someone whose economic survival and security are reasonably assured. If you're middle-class, you usually aren't worrying where your next dollar is coming from. You have at least a little discretionary spending money. You have some free time.
In a rural area, where the cost of living is very low (and maybe you raise some of your own food), that might be possible on $30k. In the city it's likely to take at least twice that.
Conversely, as long as you have to work to maintain your lifestyle, you're middle-class, not upper-class. Even if you're making $600k, if quitting your job is not a realistic option because of the mortgage on your mansion, the payments on your Ferrari, and a couple of failed investments -- you're middle-class. You're way at the upper end of the middle class, but you're still middle-class.
Now, certainly, if you're making $600k and you're reasonably careful with your money, you have a golden opportunity to make investments that can, in a relatively short time, put you into the upper class. But you're not there until you have enough passive income to live on indefinitely.
That's a very American perspective. In the UK a Duke or Earl can be close to broke, but nobles and gentry will always be considered upper class.
In contrast lottery winners, successful plumbers or grocers and other businessmen will almost never become upper class, even if they are independently wealthy.
Right. In Europe, it also often has to do with status. For example, you can make €25m and still not be accepted by the "upper class" (i.e. wealthy "old" nobility), because you are seen as not sophisticated enough. On the other hand, decent wealth builders (but not crazy rich) people can still be accepted in the upper class because they share certain values and habits.
A lot of old noblemen look down on the capitalists / nouveau riche. At the same time, the realise they need capitalists to help them generate decent yields on their inherited fortunes. It's an interesting world at the top. Some are accepted into the group, and others are not.
Source: my mom is friends with several people who carry a title.
I was always curious about this. How does this kind of acceptance/rejection manifest itself in today's world? Is it just that these people thrown parties/events and deliberately not invite the "unsophisticated sobs"? Is it membership in clubs? Some kind of political influence? Admission to elite universities for their kids?
I’m based in Belgium. A lot of people of European nobility (not just Belgians) actually live here. I’ve had the chance of having dinner with a few of them and it’s actually quite interesting. They don’t really think in terms of class these days. A lot of it has to do with values. They accept people without significant wealth, and see them as equals (which might not have been the case 200-300 years ago).
For example, most of them are still quite wealthy (i.e. a net worth of >€5m). One cardinal rule is you don’t flaunt your wealth. You can talk about investment returns etc, but you don’t drive around in flashy $500k-1m cars. Some capitalism is good, too much of it is bad. Most also like art. They enjoy living outside of the spotlight. A lot of people of nobility have been brought up to help fellow citizens in any way they can (i.e. not just giving money, helping them out with various stuff).
Overall, these are mostly good members of society that enjoy living their life outside of the spotlight. They respect the society they live in. It's not because you have you money that you shouldn't have respect for society. If you are well educated and respectful, you won't have too much trouble being accepted.
But only in the abstract. Saying "I bought some IBM shares which then went up 7%, which was nice" is fine. Saying how much your capital gains were in the last fiscal year is absolutely faux pas.
I suspect talking about wealth in concrete numbers is deemed unacceptable because it confronts people with the moral consequences of hoarding wealth and inequality, and they really don't want those uncomfortable conversations.
> They don’t really think in terms of class these days.
Because their social networks are ruthlessly narrow. They don't think in terms of class because they never interact with people who aren't at least at the social level of an educated professional.
Yep. Well, you can probably push it, and say like, I made 7% / €100k on that investment. That’s acceptable. But saying that you increased your net worth from €4m to €5m is not.
Another reason why they often don’t talk about their total net worth is because most are actually incapable of growing their wealth, even if they wanted to. A few percentage points of yield, sure. But taking calculated risks to double their money is hard for them.
> They don't think in terms of class because they never interact with people who aren't at least at the social level of an educated professional.
What I find interesting is that wealth is often not the main driver behind their relationships. You can be relatively poor, and be accepted by them (but maybe not by society as a whole), as long as you share their values. They will regard certain people as their peers who, while looking at it from a monetary perspective, should not be.
But yes, their social networks can be extremely interesting. In Belgium especially, it is not uncommon to see people of nobility achieve great things (whether that is in business or in public service). They carry around genuine chauvinism / patriotism. At the same time it has shown that, for example judges in court, tend to be less strict in applying the laws on nobles. Not exactly sure why that is, but it makes for an interesting case study. Maybe because some judges carry a title themselves?
> At the same time it has shown that, for example judges in court, tend to be less strict in applying the laws on nobles.
This one is easy. For the same reason judges give harsher sentences to people of color than to white people. Harsher sentences to men than to women. Harsher sentences for street crime than for financial crime. They give harsher sentences to uneducated people than to educated people. Good looking people get lighter sentences too. Confidence and charisma pays off too.
It's so much easier to empathize with somebody who looks exactly like the people you went to school with, you went drinking with in college, who talks like you do and who cares about the things you care about. So naturally their defense will sound reasonable in your eyes, and a lighter sentence follows.
> unacceptable because it confronts people with the moral consequences
Or more likely, because it gives out confidential information about how much you're really worth, which one should never do (for reasons varying from "avoiding hangers-on" to "avoiding loss of status").
I'm skeptical of your explanation because there are no "hangers-on" in that social class (the nouveau-riche have to worry about that) and status is only loosely correlated with wealth.
The more I think about, especially in Europe, the more it seems that status has little to do with money / wealth. It very much has to do with your values and the company you hold.
> It's not because you have you money that you shouldn't have respect for society.
That's because old-money knows very well that society as it is underpins their status. Disrespecting it, you disseminate an attitude that will ultimately dismantle it, bringing about your own demise.
European old-money dynasties have seen quite a few upheavals, some of them prompted by their own carelessness, and have learnt what is necessary to survive and prosper: anonymity, peace, and making sure nobody will rock the boat.
Very true. The noble family I know was stripped off of €75m worth of land in a certain Belgian town, that they had owned since the 1700s, in the 90s by the government.
Regardless of how they acquired that land in the first place, that's pure theft. And I've also heard several stories of how they lost significant wealth due to shady characters.
"Regardless of how they acquired that land in the first place, that's pure theft."
Regardless? Really? Even if the way the family acquired the land was also "pure theft"? At bottom it's conquest + inheritance for nobility. IOW, pure luck. I think it appropriate that government redistribute such land someway.
Ditto for the various religious organizations too. Henry VIII took much land and wealth from the Roman Catholic Church.
In this case, I believe they inherited it from the last remaining heir of another noble family that had owned it for nearly 600 or 700 years.
If I remember right, that family received it as a gift from a king at the time. While in principle I agree with your notion, I don’t think the government should be taking away property in this day and age anymore.
At the end of the day, how far do you have to go back to protect property rights? If a family has owned a plot of land for nearly a thousand years, is it not yours then? Do we need to go back further?
From the asian perspective, it's who you were born to, and who you are friends with.
Manifests itself a lot in questions of access to the higher positions, career growth and so on. It's fairly common to get refused on a promotion because you are a noname and know no one of the right folk.
One might have quite a bit of money, and be unable to do anything about a situation, while the other would know someone who cold make a call to someone else who would "call the elevator down" in exchange for a later favor.
It's not a specifically American perspective at all. Please note, I'm talking about economic class. As others have pointed out, social class and economic class are quite different things.
You're free to define words as you please, but it gets in the way of having a good conversation.
What you call the lower economic class is better known as the precariat. Those who have low income, no wealth, no meaningful social safety net, and no opportunities.
What you call the upper economic class is better known as the independently wealthy. Those who don't need to work at all in order to live well.
I don't think you can meaningfully talk about an "economic class" that is purely a function of one's wealth, income and expenses, which is why sociologists never do.
I think it's a very useful distinction. I've seen similar things in demographic statistics. Where e.g. parents education was more predictive of their child's outcome than their income. Career choice and success is somewhat noisy and random.
Yes, I'm not from the US, and yes, I'm always astounded by americans who think that your income bracket defines your class.
> Here in the US I've heard families earning from $30k to $200k, working jobs from manual labor to white collar, call themselves "middle class."
Sounds perfectly reasonable to me. Where I'm from, the most important marker for middle class is that you value education very highly, and that you don't value physical labour above any kind of work.
Obviously, the people in your example at the low end of the pay scale would most likely be lower middle class, and those at the upper would be upper middle class. The major distinctions between those would be how to perform social interactions and the size of their social networks, but they all agree that life's goal is to send your kids through college.
(As opposed to being working class which means you do not value education highly, and you value physical labour ("real work!") higher than any other kind of work.)
> I'm always astounded by americans who think that your income bracket defines your class.
Given that defining class is entirely and inherently arbitrary in nature, it means your premise is no more valid than an American that chooses to define themselves on class by income.
I'm talking about social class, which is a very real and well-documented phenomenon. Money is not a very good predictor of social class, because it only controls what you can buy.
To belong to a higher class, you have to use your money to buy the props that are necessary to perform that higher class, and you have to be able to do the performance as well.
For example: You buy business class tickets for your entire family for a vacation in Europe, and you still complain about how horrible flying is. Congratulations, you just performed upper-middle class!
That's impossible. Almost everyone in TV shows is far richer than the overwhelming majority of Americans can ever become. Like, Friends is so famously about a group of people who live in large, expensive, well-furnished apartments without ever having to do commensurate work that TVTropes coined "Friends Rent-Control" to describe it. The Simpsons is about a man who can always support a family of five people and two pets on a blue-collar worker's income even though he quits his job to pursue a non-remunerative life-dream in one third of all the episode plots. And then he always gets the same job back!
TV labor-economics is a special category composed exclusively of hand-waving that lets the writers portray cool stuff without having to actually use nothing but the idle rich as characters.
And this itself is something that seems to vary by country. In the US, the average TV show character seems to be fairly well off, at least 'middle class' and able to pretty much work maybe two hours in their entire life.
In the UK on the other hand, a lot of our characters seem to be from working class backgrounds with a lot of money troubles and lower key living conditions. Like say, basically anyone from a UK soap opera (like Eastenders or Coronation Street). Or the main characters from Only Fools and Houses or Steptoe and Son.
> The Simpsons is about a man who can always support a family of five people and two pets on a blue-collar worker's income
He's a nuclear safety inspector; does that count as blue-collar? I don't really know much about the job frankly. I don't think it's implausible that it may be quite enough to support a family, especially in a small town.
Not to defend the realism of the Simpsons wrt his job, but I'm pretty sure the joke is that he manages to keep his well-paid, relatively important job.
The actual real-life job might not be blue-collar, but as portrayed in The Simpsons, he walks into an interview having graduated high school and gets the job, so is pretty solidly blue-collar.
It's easy to believe though. Most Americans watch TV to indulge in escapist Beverley Hills (sp?) fantasies, not to see a mirror image of their own dull, drab life. They also tend to believe that these "celebrities" deserve their riches because of their charisma or their athletic ability, MUCH more so than your average white collar yuppie who climbed the social ladder IRL deserves anything.
They do? What American TV shows focus on the poor or the working class? Other than Roseanne (which went off the air in 1997) I struggle to think of one.
There are a few. Always Sunny in Philadelphia (arguably), King of Queens (NJ USPS driver), The Wire, Sons of Anarchy, Bob's Burgers. I'm sure there's some others; most of the street-level police procedurals are pretty blue-collar.
> Here in the US I've heard families earning from $30k to $200k, working jobs from manual labor to white collar, call themselves "middle class."
$200K is definitely considered middle class in the US, especially by the left. For example, both Clinton and Sanders use $250K as their upper limit[0].
As for manual labor vs. white collar - it depends on what context you're talking about, but in terms of sheer economic purchasing power, that doesn't really matter that much. (Incidentally, a lot of white-collar office jobs pay a lot less than many blue-collar positions). There's definitely a class and status aspect to the term 'middle class', but that's much harder to quantify (and is also only loosely correlated with income - hence the existence of the term nouveau riche.
As an aside, $200K isn't necessarily as much as people think it is, which is (one of the reasons) why people like Clinton and Sanders consider $250K to be middle class[1]. A lot of people who "make" $200K in gross income are often working jobs which require them to cover a lot of large expenses (such as vehicles/equipment) out-of-pocket, or are running their own businesses[2]. While they might seem rich if you just look at the $200K figure, that doesn't mean they're really rich in any meaningful sense of the word - even if they're frugal, they could still be living quite hand-to-mouth on that amount.
$200K is definitely considered middle class in the US, especially by the Democrats.
I think that has more to do with politics than economics. $250K is an income limit that is politically expedient.
To call yourself middle class when you're making 5x the media household income is kinda silly. And yes, I know many live in HCOL areas.
A lot of people who "make" $200K in gross income are often working jobs which require them to cover a lot of large expenses (such as vehicles/equipment) out-of-pocket, or are running their own businesses[2].
This doesn't make any sense to me. Your gross income is your gross income. Nobody reports what their business revenue is as gross income. You need to take out expenses first.
> You'd have a higher standard of living in Cleveland at $100k than in San Francisco at $250k.
This is a good example of how "standard of living" is kind of a meaningless concept -- to someone who values "enough backyard to play catch in," you're correct; to someone who values "not living in Ohio," you're completely wrong.
> You'd have a higher standard of living in Cleveland at $100k than in San Francisco at $250k.
That’s a hyperbolic exaggeration. If you pay for a 2 bedroom apartment, transportation, food (even if the SF person only shops at Whole Foods or wherever), utilities, comparable health insurance, etc., then the SF person on a $250k salary is going to have considerably more left over to spend on whatever else they want.
If you have 2–4 people, a 3000 sq. ft. house is in my opinion worse quality of life than a 1500 sq. ft. flat, because you have double the rooms to clean, for little tangible advantage. If you feel you need the space for a bowling alley / film screening theater / wood shop / large library / child’s playground / art gallery / industrial kitchen / space to host an 80-person party / rooms for 10 guests / ..., in the city you can find all those within walking or easy transit ride distance.
>double the rooms...for little tangible advantage.
IF you can't understand why some people consider a larger house to be an advantage, then you are really failing to understand a large segment of humanity.
You seem to have missed the “in my opinion” part. Sure, some family of 3–4 might want an enormous house, e.g. to show off for the neighbors, put up the whole extended family as visitors under one roof, have a personal machine shop, give each family member 2 exclusive personal bathrooms, or whatever. For me, a bigger house would lead to worse quality of life.
I grew up in a mixed-class suburb, and many of my friends were the children of professionals (doctors, dentists, lawyers, businesspeople, etc.) with very large houses. So yes, I understand that some people think it’s important/useful to have a large house. None of them seemed to have a higher quality of life than my friends whose parents were professors, artists, teachers, etc. and lived in “normal-sized” 1000–1800 sq. ft. houses. In general, the large-house parents worked all the time, commuted longer distances, spent less time with their kids, and seemed generally less happy. On average the kids were probably also somewhat less happy. Having a big house, and having fancier material possessions more generally, isn’t really the most useful priority for most people to meet their primary life goals, in my opinion. YMMV.
At a world-wide scale, if every family needs to have a 3000+ square foot mansion on a separate lot, we’ll stay on track to wreck the planet.
I don't think it's at all hyperbolic once you take taxes into account. Between state and federal the difference is something like $60k, depending on your situation. That's over a third of the difference and we haven't actually taken actual cost of living into account yet.
Just moving between Maine, which has not-particularly-onerous state income taxes, and New Hampshire, which has none, I had nearly 10% more going into my bank account each pay period.
It amazes me that Texas and Florida professional sports teams aren't overwhelmingly dominant, given that the contracts that they can pay athletes are effectively 10-25% better than other states, due to lack of state income tax.
Why is that idiotic? It seems pretty sensible to me that you'd pay tax where the money was earned.
To take a simplified example, if you lived in low-tax Nevada, but traveled to high-tax/high-population California to play shows, you're earning money based (at least in part) on the large audience in California. Why shouldn't you pay California part of that revenue?
>Yes, but you're living in a very popular city. You're getting something for that additional COL.
Well, sure, that's true. But it's also possible the most important thing you're getting is a high paying job that wouldn't be available in a less expensive area. And it's possible that, like me, you would consider living in a dense city to be more downside than up.
It occurs to me a large factor in whether or not I'd consider people on the borderline either middle class or wealthy has to do with how much flexibility they have in then income. If you're getting a quarter million dollars every year from a trust fund and can live wherever you want, you're wealthy. On they other hand, if you and your spouse are grossing a quarter million dollars a year from jobs that requires twelve hour days in a very expensive city you don't necessarily like (and don't see much of in any case), you're middle class.
That's because they are middle class. If they were upper class or working class, they would not think of themselves as such. Income does not determine social class.
Without saying where they live that's meaningless. In San Francisco they are not even upper middle class, if at all, and they will be struggling even with their 150k. But even in cheaper areas, 150k to me is middle class.
The problem is that wealth/income is not normally distributed! It is heavily - heavily! - skewed.
I would not worry about any family with <250k annual income when thinking about "what do we do about the uneven distribution of income", I would let those people be. They are not the problem. Look at the top 0.01% (see http://www.economist.com/news/finance-and-economics/21631129...).
Even in the Bay Area (which these two are NOT in), they are making DOUBLE the typical Bay-Area median household.
You can't make DOUBLE the amount of money of the median family and then claim to be "middle class". It just doesn't work that way.
And FYI: there's a reason why there's a ton of anti-gentrification going on in San Francisco. The actual middle-class, who is trying to live on ~$80k combined income in that region, is not able to find a house (let alone the lower-class, who will earn much less than the median)
My family makes significantly over 150k per year, and we still consider ourselves middle class. Class isn't about income, it's about values and culture, as numerous articles linked elsewhere in the comments explain.
$150k is a lower-estimate for this family, they probably beat the $165k to qualify for top 5% household incomes in the country.
High amount of autonomy in their work, advanced degrees (beyond college: masters degree plus continuing education), significantly higher wages than everyone else... yeah, upper-middle class.
Ok, I think we keep talking past each other, because to me, upper middle class is just a subset of middle class. I don't think it's wrong for people who belong to it to describe themselves as middle class, because if you're in the upper middle class, you have a lot more in common with the rest of the middle class, than you have with the upper class.
Well, two people making $150k/year together are making $75k/year each, which is actually reasonably middle-class-ish, and they're definitely both working-class in the strict material-relations sense because they sell their labor-power to survive.
That's both salaries mother and father combined. You've got to be kidding me if having a takehome income literally TRIPLE the median constitutes "middle class".
There's no official or scientific definition of "middle class". Maybe it means the middle 95 percent. Triple the median still puts you well below the top 1 percent and below millionaire or billionaire. Since current political rhetoric singles those folks out as rich, it's no wonder most folks below that level would call themselves "middle class".
>That's both salaries mother and father combined. You've got to be kidding me if having a takehome income literally TRIPLE the median constitutes "middle class".
Look, I don't even think "middle class" is a meaningful term. Don't ask me.
> and they're definitely both working-class in the strict material-relations sense
Despite the name, having to work for a living isn't what puts you in the working class. What you work with, and how you value different types of work and education is what puts you there.
The new hires at the G.M. plant in Lordstown Oh. are only starting at $15.hr.They now have the line separated by a fence new hires on one side old-timers on the other , the old timers are making between $28. to $38. hr , last I heard . . so really by old standards only the old guys our comfortably still middle class.
And they have more applicants than job openings, and folks willing to put in lots of overtime because the car factories are the best jobs in the area. If the factory dies, the town dies. They are probably still catered to with discount apartments and other such things.
That's possible. But historically, when you talk about the middle class, the first thing that should come to your mind is executives, surgeons and lawyers, not car assembly line workers.
>The study appears to define "middle" as 90% of respondents
Where do they do this? I think they just defined the lower boundary as the federal poverty level of 30k and the upper bound as where "rich" starts. Seems totally reasonable to me.
> In the latter case, the study literally uses "people who identify as rich".... The obvious definition would be percentiles of income
The study did use a percentile, it did not define rich people as "people who identify as rich". It looked at the approximate percentile of people who self-identify as rich (1-2%) and then found a round number (350k) that was in the range of that percentile (1.8%). This seems perfectly reasonable to me. And arguing about 1% vs 1.5% vs 2% is pointless because as I always say, arbitrary-in arbitrary-out; neither is more or less "correct" than the other.
Apologies if we're referring to different reports.
We’re referring to the same report and thanks for being rigorous on this. I certainly wouldn’t want to oversimplify.
Using self-identified rich to derive an income baseline for rich still means “rich” is self-identified, no? It still puts us in the 1-2% range.
I suggest that a measurable definition of rich should be those who are clearly above the vast majority of (say) incomes. Being richer than 80% or 90% of the population makes one closer to the top than the middle, so that seems like a better definition of “rich”. Agree that it is necessarily arbitrary, but I think such a definition is pretty conservative.
Regarding the 90%, it’s from this line:
> about 9 out of 10 respondents identified as being in one of the three parts of the middle class
>Using self-identified rich to derive an income baseline for rich still means “rich” is self-identified, no?
I don't agree with this - I know a guy who makes 500k a year who considers himself "upper middle class", but this report would classify him (probably rightfully so) as rich. I think of the self-identified part as a principled way of defining something arbitrary. In my job I do a lot of analysis that needs to be boiled down to easy-to-understand metrics and definitions, and I personally feel this is the best approach when there isn't a good standard definition. A simple percentile wouldn't work here because the whole point of the study is looking at how income/class has changed over time.
>the author’s using the $30K number (from the poverty line) puts us at around the 5th percentile
Note that 30k is a normalized "family-of-three equivalent", which isn't the same as household income. It's actually a pretty neat way to remove size-of-family effects (which changed over the period of the analysis). Figure 2 shows about 20% of people would fall below middle class in 2014, and 24% in 1979.
>Again, thanks for the rigor
No worries and glad to, I love reading these kinds of studies!
I think the best definition of class is "functional" -- what category of function do you have in the society. I see four big categories (from the top): own the society (nobility, big capitalists), administrate the society for the owners (lawyers, teachers, bureaucrats, computer programmers etc), move objects around (carpenters, forklift drivers, janitors), do criminal stuff for the society (prostitutes, drug dealers, hit men). There are different levels of skill within each, which can make a big difference in the life of the person.
Having read your comment six hours after you made it and many that follow, I find it telling that in response to your complaint that the definitions of middle class and rich are made up in the article, you have a bunch of people coming in and making up definitions seemingly based on little more than their gut feelings of what the terms should mean.
If there's nothing approaching a consensus about what given words or phrases mean then perhaps they shouldn't be used.
There are meaningful qualitative and cultural differences between, say, late-career professionals with owned homes and 401ks sufficient to maintain standard of living in retirement vs. people who could maintain that lifestyle or better without even working.
That's kind of why we use the term upper middle class - to distinguish true average incomes from educated professionals (law/engineering/accounting/teaching/ middle management and formerly journalism) from landed aristocracy and CEOs of Fortune 100s.
This is why we use numbers instead of words when describing easily measured things, like income in $. Easy to graph, easy to see. Words are no friend in issues of class.
The study appears to define "middle" as 90% of respondents, which is laughable. Everyone thinks of themselves as middle, no matter how far from the actual middle they are.
The obvious definition would be percentiles of income, or wealth, or other measurable advantage. This would put a lot of readers in an upper class, as which people really don’t like to think of themselves.