What do you define as "middle class"?

[Atomic Playboy]

Middle Class used to mean in the late 60s

A 1000 Sq feet home, 2 bedrooms 1 bathroom home with a yard and BBQ, one or two television sets.

One or two autos but average age of them 5-6 years old. Range of price when new, 12-14K in todays money

I don't think there are many people who would buy a house and then get a six-year-old super-economy car. There are only four cars for sale in America today that cost less than $14,000 new (I've included the Smart Fortwo, which is actually a hair over). The average new car price is over $30,000, which would get you something comparable to the average sedans of the 1960s. So you're a bit off in your estimation of new car prices. Now if you mean $12-14k as the used price, then I think you're on the right track (although there are an awful lot of people who overspend on cars so they can have something new).

 

[mizzou]

if you have to work or youll starve, youre working class.
if you can live off investmets, youre middle class.
if you can manipulate the government and economy, youre upper class

I understand where you are coming from, but I think you have your definitions wrong.

If you have to work or you will literaly starve, that should be the very definition of poverty.

Working class "blue collar" jobs often pay good wages, but they are often dangerous, short lived, or dependent on numerous other uncontrollable factors.

Since hardly anyone makes money off of investments...I doubt that is a strong definition of middle class. Now, having the money to start making investments, that might be a fairly legitimate definition.

And Who really can manipulate the government and economy? It doesn't take financial wealth to do that.


Go to any town USA and you can figure this out pretty easy. The trailer park is lower class. The typical ranch/1.5 story houses are middle class. The big ass mcmansions next to the golf course are the upper class. That's about as easy as you can break it down.

 

[Slew Foot]

that doesn't make sense. you have to have enough investment to live off them to be middle class? That's a terrible definition.

Thats because youre a stupid American who watches too much TV and likes to think that they are better off than they really are.

 

[cbrunny]

Thats because youre a stupid American who watches too much TV and likes to think that they are better off than they really are.

what colossal douchebaggery is this?

 

[AdamK47]

Thats because youre a stupid American who watches too much TV and likes to think that they are better off than they really are.

What class does this fall under? Another made up one?

 

[Carson Dyle]

Middle Class used to mean in the late 60s

A 1000 Sq feet home, 2 bedrooms 1 bathroom home with a yard and BBQ, one or two television sets.

One or two autos but average age of them 5-6 years old. Range of price when new, 12-14K in todays money

Passbook savings account. (yes people saved money back then)

Christmas club or vacation club to put aside money for a vacation, christmas gifts etc..

siblings shared 1 room. not every kid had his own 400sq feet room.

You nailed it, although I think you're off on the auto price. According to a conversion calculator, the $2700 we paid for our 1967 Ford Galaxie 500 would be about $19,000 today.

Dad worked as a union machinist, Mom was an underpaid school teach in a Catholic school. Under 1000 sq ft 3BR, 1BA house house. My brother and I shared a 10'x12' bedroom. We owned one car, a few years old. Dad got a ride to work with a buddy for 20 years.

I wouldn't go so far as to call that middle class living, though. We got by. But like you say, people then didn't expect to live in 2500 sq ft homes and own three cars on the salary of an hourly worker. Expectations in lifestyle have changed dramatically, which is the real reason so many people think that the middle class is shrinking.

 

[Uppsala9496]

Yahoo is jumping in on this topic:
http://finance.yahoo.com/news/university-michigan-student-insists-earning-183000778.html

 

[TheSlamma]

I don't think there are many people who would buy a house and then get a six-year-old super-economy car. There are only four cars for sale in America today that cost less than $14,000 new (I've included the Smart Fortwo, which is actually a hair over). The average new car price is over $30,000, which would get you something comparable to the average sedans of the 1960s. So you're a bit off in your estimation of new car prices. Now if you mean $12-14k as the used price, then I think you're on the right track (although there are an awful lot of people who overspend on cars so they can have something new).

His point is we couldn't all afford new back then, if you buy one of those 30K cars once it hits 6 years old it will be down in that 14K range he's talking about.

I know plenty of middle class people now who buy 4 or 5 year old cars now, mainly because Soooooo many people are doing that moronic lease crap.

 

[Phoenix86]

Yahoo is jumping in on this topic:
http://finance.yahoo.com/news/university-michigan-student-insists-earning-183000778.html

Places with extreme housing markets will skew the "average" by a mile. Of course the number change, but income is irrelevant.

Purchasing power is probably the better metric.

 

[nageov3t]

Places with extreme housing markets will skew the "average" by a mile. Of course the number change, but income is irrelevant.

Purchasing power is probably the better metric.

yeah... I feel solidly middle class (or maybe even lower middle class) with my household income of ~$160k in NYC.

meanwhile, when I was back in my dad's hometown back in the fall (middle of nowhere New Hampshire, utterly decimated by the collapse of the New England paper mill/lumber industry), the most expensive house in the town with sweeping mountain views is like $90k.

 

[Carson Dyle]

Places with extreme housing markets will skew the "average" by a mile. Of course the number change, but income is irrelevant.

Purchasing power is probably the better metric.

How would that $2M shitbox of a house in Silicon Valley _not_ dictate their purchasing power?

 

[BurnItDwn]

Ehh, he might have spending habits like the wealthy/rich, but truly, its all bullshit.

Poor people are always getting fucked by the system and taken advantage of. They are always behind and never caught up.

Middle Class makes enough so they dont have to live paycheck to paycheck. They are at least 2 months from hungry.

Middle class is a pretty big range.

At the high end Upper Middle class makes awesome income, but you arent really rich unless you have the investments in place to be secure for life. In 2-3 years if your friend doesnt blow it all on hookers and blow, then hes rich. Otherwise, not so much.

 

[mizzou]

Places with extreme housing markets will skew the "average" by a mile. Of course the number change, but income is irrelevant.

Purchasing power is probably the better metric.

But isn't living in an "Extreme housing market" a sign of significant wealth?

 

[moonbogg]

I define it as something _above_ working class. If you're a union steelworker making $75k per year, you're not middle class. If you're a cop making $120k per year, you're not middle class. If you're an engineer making $100k, you're not in the middle class.

People decry the shrinking middle class. Truth is, they were never a part of that class, much as they were told by politicians that they had made it and as much as they wanted to believe it.

Yeah, middle class is like small business owners who have people working for them. They might make about 500k to a few million per year or so. They probably check in periodically and maintain their business, but managers do most of the maintaining for them. They can take as much time to themselves and go anywhere they want and aren't concerned with living costs and things of that nature. They are concerned with what investments to make, which business ventures to pursue, which horse to bet on etc etc.
Anything below that and you are working all the time, and anything above that and you are too busy buying islands and small countries to be bothered with the rest of the world.

 

[Slew Foot]

Yeah, middle class is like small business owners who have people working for them. They might make about 500k to a few million per year or so. They probably check in periodically and maintain their business, but managers do most of the maintaining for them. They can take as much time to themselves and go anywhere they want and aren't concerned with living costs and things of that nature. They are concerned with what investments to make, which business ventures to pursue, whichm horse to bet on etc etc.
Anything below that and you are working all the time, and anything above that and you are too busy buying islands and small countries to be bothered with the rest of the world.

Exactly, but most of the idiots in this thread think that because their crap salary gets them an extra gig a month on their data plan that theyre now in the middle class. The true middle class doesnt need to work and lives off investments. The goverment likes to make you think youre in the middle class becuase if everyone realized that theyre merely peasants, theyd start uprising.

 

[Engineer]

Exactly, but most of the idiots in this thread think that because their crap salary gets them an extra gig a month on their data plan that theyre now in the middle class. The true middle class doesnt need to work and lives off investments. The goverment likes to make you think youre in the middle class becuase if everyone realized that theyre merely peasants, theyd start uprising.

So there's the 1% and then there's the lower class, because that's exactly what you're saying?

 

[Atomic Playboy]

So there's the 1% and then there's the lower class, because that's exactly what you're saying?

That's not even the 1%. Having enough money to never work and live solely off investment income is in the domain of ultra high net worth households, of which there are about 100,000 worldwide. So, you know, the middle class and rich is ~100,000 or so people, and the poors are 7,296,000,000. Because that's what "middle" means, apparently.

Never share an apple with Carson, moonbogg or Slew. If you ask them to cut it down the middle, they'll hand you back a strip of peel.

 

[Phoenix86]

How would that $2M shitbox of a house in Silicon Valley _not_ dictate their purchasing power?

But isn't living in an "Extreme housing market" a sign of significant wealth?

No, because you couldn't afford that place unless you lived there. The local jobs pay more for the same position. The loans are based on this income. NY is another good example.

That's as asinine as me saying I can double my pay by moving to these markets. That doesn't mean I can afford double the standard of living, because my purchasing power has changed.

There's a certain amount of relativity.

 

[Carson Dyle]

I certainly wouldn't go as far as to say the middle class consists of only households where nobody needs to work for a living. Nor does it exclude anyone who works for someone else.

 

[brianmanahan]

Having enough money to never work and live solely off investment income is in the domain of ultra high net worth households, of which there are about 100,000 worldwide.

what, 100k people? that seems low. someone with a couple million should be able to live off of investment income for the rest of their lives.

 

[Belegost]

That's not even the 1%. Having enough money to never work and live solely off investment income is in the domain of ultra high net worth households, of which there are about 100,000 worldwide. So, you know, the middle class and rich is ~100,000 or so people, and the poors are 7,296,000,000. Because that's what "middle" means, apparently.

Never share an apple with Carson, moonbogg or Slew. If you ask them to cut it down the middle, they'll hand you back a strip of peel.

That's untrue, at reasonable investment return rate of 4% an investment of 1M will bring in 40k/year, so it's possible to live a comfortable life with 2M or so banked. In 2010 the top 20% of wealth holders had average financial holdings (so assets not including home, cars) of 1.7M. This suggests that the top 10% or so in terms of wealth would be in the position to live off investments indefinitely (though they may not choose to.)

That said I don't agree with slew and bogg's take on middle class - historically professionals such as doctors and lawyers were generally considered middle class, even if they needed to continue practicing their profession to live.

But I also don't agree that taking the middle 50% centered around median income is middle class. Income is only one facet of class - high income but little wealth households are not really upper class yet, they are in the position to move up through investments over time, but not yet there.

Hence I would argue middle class should be determined by both income and wealth combined. For instance a person who retired young on 1.2M in investments and owns their home (without mortgage) has an income close to median, but holding that level of wealth definitely puts them in a different social position than someone who works 2 jobs to make the median, rents or has a mortgage similar to the value of their home, and has little or no savings. Similarly, a person earning 300k/year, owning their home without mortgage, with 500K invested is not in the same place as someone making 300k/year, having a huge mortgage payment on a mcmansion, and with 30k in their 401k.

I would define middle class in a negative fashion - middle class is not lower class and also not upper class, as lower and upper classes are more easy to define.

For instance, being in the top 10% of wealth alone I think qualifies as upper class, or being in the top 20% of wealth and also 20% of income, or top 10% (or maybe even 5%) of income only, while not being in the top 20% in financial wealth.

On the other end, lower class would be in the bottom 40% of wealth and income.

Middle class would be what remains. It would encompass those with some notable wealth but not great income (say 1M or less invested and not working), those with higher incomes that do not have much wealth (so earning 150k/year salary, but not having any savings doesn't put you in the upper class), and those in between.

 

[uclabachelor]

Argued with my friend tonight.

He makes $300K+ per year. He just got a $750,000 bonus this year and will get an additional $1 million in two more years when his options vest.

He claims he is middle class. While I can't say he is "upper" class, it just seems wrong to say that he's middle class. Would he best be described as upper middle class?

Middle class would be having his name on the door at his office.

Upper class would be having his name on his office BUILDING.

And lower class would be having his name on his shirt.

 

[TheSlamma]

You know I have always wondered. While there is protections against this now, what would happen if all banks all over the US and Canada were able to all at once call in all of their loans how many assets our "middle class" would be left with.

I'm not asking why it would be a bad idea or asking if it would make sense it's terrible. I'm just getting to the point of is our middle class just based on credit?

I would keep all of my assets BTW and consider myself middle class, grinded away for 11 years to pay off my mortgage early and my wife and I drive 8 year old econoboxes and live miles within our means. But I look around and ALL of my neighbors are driving around in new cars every 3 or 4 years, going on elaborate vacations, buying gadgets and expensive electronics etc, I don't get how they do that unless my wife and I just don't make that much money or they are all on GOBS of credit..

 

[cbrunny]

Lol middle class is not in the middle? Stupid.

 

[Carson Dyle]

But I look around and ALL of my neighbors are driving around in new cars every 3 or 4 years, going on elaborate vacations, buying gadgets and expensive electronics etc, I don't get how they do that unless my wife and I just don't make that much money or they are all on GOBS of credit..

One thing I notice is that many people today have inherited considerable wealth. My siblings and I just inherited our father's estate. Twenty years before, he and my mother inherited money from the estates of their parents. None of these people were rich, but the wealth accumulates. I have no children that will inherit anything, but I can assure you that my sister's kids will be _very_ well off in the future.