Everybody Thinks They're Middle-Class | Hacker News Reader

Everybody Thinks They're Middle-Class

bloomberg.com

128 pointsMichaelAO150 comments

It's really not strange nor contradictory. Most people probably think of "middle class" like this:

- lower class: on welfare & food stamps

- middle class: have a job, must work for a living

- upper class: not having to work and living off interest payments of wealth investments

Therefore, the middle class covers the wide spectrum of $9/hr Starbucks baristas and $500k white shoe lawyers. For "lower class", most people use the label "poor". For "upper class", most people use the label "rich".

(I'm guessing Bloomberg was attempting to give an insight similar to the mathematical contradiction of "everybody thinks they're an above-average driver". However, they misunderstood how people self-identify themselves as "middle class".)

I'm not sure a $500k white shoe lawyer is middle class. Sure, they may work for a living, but they're also likely to have enough investments that they can just live off the interest if they wanted.

I mean, $500k a year is a LOT of money, even in places like SF.

Eh, taxes and other expenses add up. I don't think it would be very comfortable to stop working. 500k today isn't what it was just a decade ago.

And a 100k isn't what it was a decade ago either. While I understand your underlying point (and somewhat agree with it), how you got there was a bit bizarre. We are talking about making 500k this year, which would be obviously less a decade ago when adjusted for inflation.

500k is still over 20 years of working full time at target.

Given that consumption (almost always) scales with social position, I imagine people will only really consider someone "rich" when they can still buy whatever they like, for the rest of their lives without working for a living.

Bill Gates can't buy everything he might want to for the rest of his life. While people tend only think of things they can afford as reasonable expenses, there is no clear line between an iPad and paying for a Mars mission.

If anything the Medean income seems like a good ballpark for enough. But, it's really hard to stop.

Maybe so, but when its not worth it to you to pick up off the ground more than what other people make... I think its close enough to not quibble.

The clear line is a yacht with 2 helipads.

Is that above or below two yachts with a helipad each?

Like Paul Allen's [1] you mean?

" Octopus sports two helicopter[2] pads on the top deck, a twin pad and hangars at the stern and a single pad on the bow; and a 63-foot (19 m) tender docked in the transom. There are a total of seven tenders aboard. The yacht also has a pool, located aft on one of its upper decks[citation needed], and two submarines (one of them operated by remote control for studying the bottom of the ocean).[citation needed] Side hatches at the water line form a dock for jet skis. "

[1] https://en.wikipedia.org/wiki/Octopus_%28yacht%29

Well, Bill Gates is a bit of an odd example. He's very thrifty. He could certainly afford $50 hamburgers, but due to the cost decides he doesn't want them.

Even if MicroSoft didn't take off, he'd still be wealthy. He's the kind of guy that waits to get the absolute maximum value out of each dollar he spends.

That's not a bad thing, by the way, just unusual.

He lives in a 'thrifty' 66,000-square-foot house. Sure, he could spend 10x as much on his lifestyle, but there is a point where more expencive does not mean better.

As to being rich, sure he inherited millions. But, connections, background, timing, and luck only go so far. You really can blow any amount of money.

In 1988 Gates was a billionaire. spending 6% of his net worth on a house really doesn't seem crazy. Most americans, well, most americans don't own a house. Those that do, it's their biggest asset. And his house has nearly tripled in value. Of course it has taken 25 years, because real estate is like that.

I've never met the guy. By all accounts he's smart, dedicated and hard working. I think he'd be doing just fine regardless of the field he went into. He got very lucky, so he's a billionaire 80 times over.

And, yes. The prince of Brunei is a great example of not thrifty. 14 billion in just 10 years. [1]

[1] http://www.vanityfair.com/news/2011/07/prince-jefri-201107

He did spend 28 billion at one point. Which is my point.

It's natural to think of spending in morale term so donations or gifts don't count or relative to income. Which makes finding a reasonable limit on the absolute scale meaningless. Supose he had 10 trillion and spent 1% on a house would a 100 billion be extravagant in that context?

I don't understand. I asserted that Gates was thrifty. As in "using money and other resources carefully and not wastefully."

I guess you're saying he's just doing whatever he thinks is fun from moment to moment, like prince Jefri. It seems like there's a subtle difference there, but I don't know how to articulate it.

I don't think thrifty simply implies someone lives well below their means. I think thrift applies in both a relative and absolute terms, so living a multi million dollar a year lifestyle you can easily afford does not count.

I make good money as a developer and live well below my means, but I am not thrifty. I simply don't have much interest in buying most things, but I can point to 10's of thousands of dollars in wasteful spending.

Bill Gates bought a Porsche 959 for $225,000 (in 1987 dollars) and left it in customs bonded storage for 13 years while he and his buddies successfully lobbied for a law blocking its importation to be changed [1]. The idea of BillG as some thrifty philanthropist isn't born out by reality.

Being the richest man in the world makes pretty much everything appear a trivial expense, but there has to be a limit somewhere.

1. http://blog.dupontregistry.com/celebrity-cars/bill-gates-ame...

I don't know how much he spent on lobbying. A low milage 959 is a 1.4 million dollar car. 9% rate of return?

edit

I get what you're saying. I just don't see the millions thrown away into nothing. Drugs, parties, wrecked cars, pissing away cash. Mike Tyson was worth $400,000,000. now he has nothing. It's easy to find people that got rich and lost it all. Lottery winners and pro athletes are prime examples.

Granted, spend one dollar less than you earn, and you're winning. He just seems like the kind of guy that has a hard time parting with cash for any reason.

Insurance, and inflation eat into that return. So, no it's not good ROI as a 30 year treasury bond from 1987 beats it let alone the stock market.

The real difference is often positive vs negative investment returns. Most sports stars lose more money from poor investments than they do spending.

Yep, it's the "keeping up with the Jones" and the Hedonic Treadmill.[1]

The $500k lawyer isn't going to just drive a Honda. He has to have the BMW 7 Series ($130k) -- and he wants a brand new one every 2 or 3 years. Instead of getting a mortgage that consumes a tiny fraction of his income or buying a cheap house free & clear, he'll take on a mortgage up to the max credit limit allowed by the bank. Hence he has a $2+ million dollar estate in a gated neighborhood. Does he have kids? Well then, it must be private school. The most desirable private schools in NYC cost $40k tuition per student per year. 3 kids means $120k/year. Basically, you do the arithmetic and $500k/year is abject poverty -- uh I mean -- middle class.

[1]https://en.wikipedia.org/wiki/Hedonic_treadmill

I know a lot of people in that income bracket. I don't know anybody with a 7 series or an estate in a gated neighborhood. They're comfortable, but more like Audi A3 than 7 series.

Few lawyers (or consultants or bankers) can make $500k in Iowa City (or even Seattle for that matter). Someone with a household income of $120k can easily afford a 2400 square foot house (that's the national average for a new house) within 30 minutes of work in a good school district near Des Moines. I'd estimate same combination takes an HHI of around $300k in the DC metro area. Jump to $500k (at that bracket you're losing almost half in taxes), and you're wearing nicer suits and saving better for retirement and your kids' college, but saving $100k per year isn't going to let you quit your job and live off interest any time soon.

Here are some numbers to consider. $500k pre-tax is about $325k after taxes (SF or NYC). Spend 50% ($162.5k), save 50% ($162.5k). After 10 years of a consistent $500k pre-tax income (no burnout, no voluntary breaks, no unemployment), with modest annual stock market growth, and no black swawns (family illness, lawsuits, divorce), you've saved up about $2 million. The rate at which you can spend money and not run out before you die (called the Safe Withdrawal Rate or SWR) is about 4% (some will argue closer to 2.5-3%). 4% of $2 million is $80k/year pre-tax. How long you need to work to cover your $162.5k/year lifestyle becomes an obvious function of savings rate and market returns over an extended period of time (decades). The bottom line is that it's extremely difficult for working professionals to become ''rich'' in the sense that they can indefinitely sustain an upper class lifestyle on passive investment income alone. Read ''The Millionaire Next Door'' by Thomas Stanley (http://fave.co/2cLN5gp) to learn more about how wealth is truly accumulated and managed in the United States. This book had a greater impact on me than pretty much any other I've ever read.

Which is why the number of years until you can retire has nothing at all to do with how much you earn, and everything to do with how much you save as a percentage of your income.

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-sim...

Your definition of "upper class" corresponds better to my definition of "rarefied wealthy"

> middle class: have a job, must work for a living

This is not the way most people have traditionally thought of the middle class.

The middle class were the highly-skilled white-collar professionals: doctors, lawyers, engineers. In contrast, the lower class were the poor or blue-collar workers: farmers, factory workers, and the unemployed. Whereas the upper class referred to business owners and financiers.

With the decline of farming and manufacturing, blue-collar workers shifted to service industries.

What is striking is most people think they have the living standard of skilled white-collar professionals, even though they are just service industry workers.

This situation is only possible because of universal access to cheap credit.

When was this ever the typical definition of lower/middle/upper class? That's not the historical definition nor is it the modern one.

The idea that being a business owner makes you "upper class" is absurd. Most business owners have always been middle class. Most businesses aren't that lucrative and require large amounts of time relative to the amount of profit generated.

Actually, as a Brit (and so an expert in these matters), it seemed a fairly good definition for me. It's similar to how class is represented in Downton Abbey and in books like "Watching the English" (Kate Fox).

As far as I know, there are no formal and universal definitions of the class system. Certainly in Britain, class has almost nothing to do with your income or bank balance. A lot of the upper class are completely broke, while there are many "working class millionaires".

Americans don't have the baggage of nobility so don't have to wedge the class system into a historical (but no longer relevant) model. In the US all that matters is money. It might come from your parents, it might not.

> In the US all that matters is money.

Not entirely. Perhaps more than in the UK, yet behavior and social circle are still a factor in the US.

I think, in general, that US and UK ideas of socioeconomic class are different. The UK puts much more emphasis on the "socio", and the US in the "economic".

Isn't the notion of "upper class" in Britain usually based on peerage titles or being related to people who have them, as opposed to business ownership? A small business person is almost the epitome of middle class, to the point that impoverished aristocrats would never stoop to such an occupation.

Sort of. It is possible to buy yourself a title.

Many Europeans are descended from people that potentially give them the right to nobility. Few invoke that in everyday life though.

So you could become an aristocrat if you really wanted to be, by blue blood or by financial assistance. In the old days somebody successful in business would often transition to aristocracy by taking on a name and the associated trappings. It is something of a controversial area! In Japan it is still common for an unrelated successful young man to be adopted into the family tree of a business dynasty.

I suspect the upper class alternates between being meritocratic and being hereditary, while claiming 'it ever twas'.

> Certainly in Britain, class has almost nothing to do with your income or bank balance.

That's fine and indicates you're using a more historical definition, but doesn't make the parent comment accurate. A decidedly lower-middle class individual can start a business and this will in no way suddenly push them into the upper class. If they make millions, they still won't be upper class by your definition unless maybe they do so well they somehow get a lordship or at least a knighthood out of it.

See another comment below: "I think infodroid was using 'business owner' in the sense of 'captains of industry', not 'local corner store proprietor'".

Some of the biggest disagreements between my wife and I occurred as a result of her have this British definition of class and me having the American one. She told me early on, she wanted a "middle class" life. I thought, "Oh, that's easy!" But she really meant she wanted to live like a doctor or lawyer. I've been busting my ass ever since I figured out what she actually meant.

I think infodroid was using 'business owner' in the sense of 'captains of industry', not 'local corner store proprietor'.

Obligatory Orwell on class in England: http://www.bradford-delong.com/2010/12/george-orwell-on-belo...

>When was this ever the typical definition of lower/middle/upper class? That's not the historical definition nor is it the modern one.

Nope, that is very much the historical definition. With the caveat that for "business owners" you should read big business owners (from Larry Elisson to the guy that owns a restaurant chain), not some person with his own hair saloon in Iowa, or some programmer who freelances as an LLC.

From the dictionary:

"the class traditionally intermediate between the aristocratic class and the laboring class."

From Wikipedia:

"In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class."

"The modern usage of the term "middle class", however, dates to the 1913 UK Registrar-General's report, in which the statistician T.H.C. Stevenson identified the middle class as that falling between the upper class and the working class. Included as belonging to the middle class are professionals, managers, and senior civil servants. The chief defining characteristic of membership in the middle class is possession of significant human capital."

And generally:

https://en.wikipedia.org/wiki/Middle_class#History_and_evolu...

I think to satisfy my own definition of class, it has to have some sort of hereditary component to it. Class has meant all sorts of things historically. In many ancient human societies, class is formally defined.

I heard it was:

- lower class: your name is on your shirt

- middle class: your name is on your office door

- upper class: your name is on the building

:-)

I think that's the best description. Today with all the propaganda around 'open workspaces', white collar workers have been forced back into the lower class (in spite of getting higher salaries).

Your class is more related to your self-esteem than your income.

In one of the companies I worked for as a contractor, I had my own office and it felt great.

When I was younger, I briefly worked in a telemarketing call center for the equivalent of $20K per year. Then many years later (after I finished uni), I was earning $200K per year in a different company (as a software engineer in an open workspace).

The $200K workplace didn't boost my self-esteem much more than than the $20k workplace.

> Today with all the propaganda around 'open workspaces', white collar workers have been forced back into the lower class.

This is the epitome of pampered engineer BS. You aren't lower class because you don't have a private office.

$200k/year and lower class? You can afford to buy your own private office for much less than that.

I agree that it sounds ludicrous to claim that one can be 'lower class' at $200k/year, however, I think there's a charitable way to read this position.

Perhaps their point is that autonomy is a better indicator of class than salary. Just like 'stupid is as stupid does,' 'class is as class does.'

Being able to afford your own office means nothing if you can't actually use it because you spend 8-10 hours a day trapped in an environment that you find degrading.

The barrier to class mobility in this case is mental. The engineer has traded autonomy for cash.

My own opinion is that one becomes upper class when they can choose not to work. If your living expenses are $20k/year and you make that from returns on passive investments, congratulations, you're a part of the leisure class.

If your expenses are $190k/year and you earn a salary of $200k/year you're a part of the lower/precariat class.

If your expenses are $190k/year and you earn a salary of $200k/year you are an upper-middle class person with poor judgement. Lifestyle inflation does not make someone lower class.

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery." -- Micawber (from David Copperfield, Charles Dickens, 1850)

Isn't it kind of interesting that normative respect for software engineers is so low that even when salaries are $80k to $150k on a team, that same team is going to be sitting in an open plan setting and talked down to by management?

It's funny because software developers are more kin to the 'real professions' like law when it comes to earnings potential: like lawyers, a software dev can simply make money by setting up his or her own shop with very* little capital investment beyond education.

Edit:

Now that I think about it, the loss of respect might come from the fact that software devs have a 'management' looking over their shoulders at all. In other 'true' professions, the ones who are liable to cut-costs, haze, or otherwise pour abuse on a professional would also be in the same profession. E.g. if you're a lawyer, you may work 100 hour weeks for the first 8 years, but you're doing so not because some pointy-haired MBA is telling you, but because X lawyer with prestige who owns the company is telling you to. So even though the outcome is the same, it may feel more okay because its coming from someone of your same class/category.

  coming from someone of your same class/category

I think you make a very good point here: it is coming from a colleague, someone who is on (more or less) the same track as you are, only a little ahead of you in terms of the career path.

> Isn't it kind of interesting that normative respect for software engineers is so low that even when salaries are $80k to $150k on a team, that same team is going to be sitting in an open plan setting and talked down to by management?

Nah, that's just how wage-labor works.

Oh I agree that is how it works. Though I still think it interesting.

Historically, there's been a push-pull between engineering and the professions. Engineering (artillery, civil, metal-working and the like) being seen as low class labour where as the professions (law/medicine/natural philosophy then science) was seen as high class work.

I once believed this was because engineering always had a physical outcome, where as professional work could be done as a pure though experiment (e.g. law) or had literal connotations of power of live (e.g. medicine).

But looking at computer science/engineering, I wonder if that's a good hypothesis. CS is still suffering from the same low-prestige status despite having billionaires rise from its ranks, and despite that it has no physical equivalent.

Being lower or higher class is not only a matter of money, but also and mainly a matter of social capital. People might not be rich, but they might use the wealth of their class peers - as long as they share their codes and culture. That's why having your own office is important. Because it brings you into another class through codes and culture. Same thing with owning a boat or a country house.

I've heard there are two kinds of jobs: the kind where you shower before, and the kind where you shower after.

And if you just don't shower? ;)

I don't think this works since it doesn't factor in age in any way.

Just because a 22yr old might work as an intern does not make them lower class.

In the UK we generally consider class to be something to include family, upbringing, attitude and as well as finances.

I have always thought of it this way:

- Lower class: convert social good into survival, dependent on others for basic survival

- Middle class: convert work into survival, provide for yourself and maybe your family

- Upper class: convert capital into survival, provide for yourself, your family and potentially society.

I stopped saying lower/middle/upper colloquially and started saying simply dependent, middle class or capital class.

That is a good heuristic, I think most Europeans would agree.

However having your family name on your building seems less common in the US and Europe nowadays. In American business culture having a generic name such as Google, Microsoft seems to be viewed as being more elite. Would Americans say that is accurate?

This causes me to suspect that Trump and Andreessen Horowitz are exceptions that view themselves as outsiders to the corporate club in some way, which is interesting.

It might have something to do with the difference between new and old money or different subclasses butting up against each other.

I myself would be proud to put the family crest blazoned on the helm of our battlebots at the factory, Game of Thrones has evidently influenced my education. Much better than something like 'Active Defense Ltd' or 'Pro-Tech.org'.

I think you've put your finger on what's interesting here: that people self-identify emotionally, using lifestyle and value judgements, and not based on actual income or statistics.

The classes are most commonly defined by economists as income brackets, not as welfare vs jobs vs passive income. [1] Yet when people are asked what class they're in, they use welfare and investments as the indicator.

Look at the stats and you start to see that by almost all definitions, the vast majority of the "rich" still have to work for a living, they simply have very high salaries. Passive income lifestyles are only being had by a very very few people well above the median of any "upper class" definition you can find.

It's not surprising that relatively well-to-do people think they're middle class, but it also doesn't hurt to have some perspective and realize that at at household income of $200k, you're in the top 3% in the US. [2] The goal of a passive lifestyle is not and might never be a realistic definition of rich, nor a practical goal for the vast majority.

Of course, as others have pointed out, it definitely depends on where you live. For more perspective, here are some stats on the cities used in the infographic:

[In 2000] The median income for a household in [Lakefield, MN] was $31,250, and the median income for a family was $37,898. [3]

The median household income in Edina in 1999 was $66,019. [4]

According to a 2007 estimate, the median income for a household in [Scottsdale, AZ] was $70,533, and the median income for a family was $92,289. [5]

According to the U.S. Census Bureau's American Community Survey data estimates for 2008-2012, the median income for a household in [Chicago] was $47,408, and the median income for a family was $54,188. [6]

Real Median Household Income 2014: US=$53,657 Minnesota=$61,481 Minneapolis=$69,111 [7]

That's over 2x variation, but most people would judge incomes of 50k and 100k very differently. *Edit: btw, kinda wierd 3 of 5 examples were from Minnesota...?

  [1] https://en.wikipedia.org/wiki/Affluence_in_the_United_States#Status_and_stratification
  [2] https://en.wikipedia.org/wiki/Affluence_in_the_United_States#Top_percentiles
  [3] https://en.wikipedia.org/wiki/Lakefield,_Minnesota#Demographics
  [4] https://en.wikipedia.org/wiki/Edina,_Minnesota#Demographics
  [5] https://en.wikipedia.org/wiki/Scottsdale,_Arizona#Demographics
  [6] https://en.wikipedia.org/wiki/Chicago#Demographics
  [7] https://www.google.com/search?q=median+income+minneapolis+mn

That's because traditionally class is about lifestyle, with income being either a consequence or a cause for that lifestyle depending on the situation

I agree.

Also, they went to the Mall of America to get opinions. Malls almost by definition avoid having the extremely poor (who can't afford anything) and the extremely wealthy (who certainly don't need to go to a mall to buy things).

That's not true.

There are always window shoppers and people that go there just to "hang out" without buying anything.

The wealthy people also have to buy their clothes somewhere and they probably stick to overpriced items in brand stores (not sure if I'm using the right name, but I'm thinking of the stores where they only sell one brand) which could be locates in a mall.

Funnily enough, "have a job, must work for a living" is Marx's definition of 'working class'. The people who had no income in the pre-welfare days tended to be short-lived.

The petite bourgeoisie must also work for a living. They may be self-employed. They are not members of the proletariat, which is Marx's definition of the working class.

I believe that Paul Fussell's "Class" makes the best accounting of the [American] class system. In it there are nine levels:

Top Out of Sight:

Billionaires and multi-millionaires. The people so wealthy they can afford exclusive levels of privacy. We never hear about them because they don't want us to.

Upper Class:

Millionaires, inherited wealth. Those who don't have to work. They refer to tuxes as "dinner jackets."

Upper Middle:

Wealthy surgeons and lawyers, etc. Professionals who couldn't be described as middle class. I suspect this is the class to which I, an engineer, am supposed to aspire.

Middle Class:

The great American majority, sort of.

High Proletarian (or "prole"):

Skilled workers but manual labor. Electricians, plumbers, etc. Probably not familiar with the term "proletarian."

Middle Prole:

Unskilled manual labor. Waitresses, painters. (In other words, my mom and dad!)

Low Prole:

Non-skilled of a lower level than mid prole. I suspect these people ask "Would you like fries with that, sir?" as a career.

Destitute:

Working and non-working poor.

Bottom Out of Sight:

Street people, the most destitute in society. "Out of sight" because they have no voice, influence or voter impact. (They don't vote.)

http://www.wesclark.com/am/class.html

This is a good list. I wonder how many Americans (out of ~320M total) fall into each level?

My wife and I combined make well above the limit for 1%-er range, yet we both feel middle class, although upper middle class is probably more accurate.

We both work extremely hard, from 9-10 hrs a day in the office and 2-3 hrs at night, most nights. We barely have time to see the kids during the week, and the weekends are filled assuaging our guilt by spending it with them, unless we have to work.

We have a modest house in the SF Bay Area, with an unmodest mortgage, and a savings that is miniscule compared to our costs and isn't growing. I have my Honda Accord that I paid off years ago, and my wife leases a Lexus SUV. We are the prototypical house-poor Bay Area family, and if one of us loses our job, we're pretty fucked. Neither of us has any sort of insurance besides whatever is provided by our companies.

The two "luxuries" we have are a weekly house cleaner, and a top notch babysitter once a week, which is why I think upper middle class is apt.

We don't feel "upper class", and we definitely don't feel rich. We know rich people, though, with live-in nannies, rented out Gary Dankos for special events, got box suites at the Super Bowl, etc.

1% in the US is about $200,000. So, you have a household income of $400,000 and are struggling?

I'm curious, what are your main expenses?

I'm curious, what are your main expenses?

Living in the Bay area?

Probably $6000-10,000 a month in mortgage payments. And he said combined they're 1%. So after tax, probably more than half of his money going to mortgage.

That still doesn't add up in my mind. A 1%-er household would have $240k+ post-tax annual income, more if they're deducting hefty mortgage interest payments.

    $100 in food daily ~ $36k
    $500 weekly domestic help ~ $25k
    $500 monthly utilities ~ $6k
    $2k monthly transportation ~ $24k
    $2k monthly misc ~ $24k
    $10,000 monthly mortgage ~ $120k

That hits around $235k post-tax. I think that's a nice lifestyle. Eating out less would allow for different "fun" activities.

Oh, I guess I forgot savings. Doh! I'd aim for savings about 10% annual pre-tax income for a household bringing in $400k+ pre-tax. I'm not sure how much of the mortgage principal payments I'd count towards that amount.

Private school for two children is ~$4000/month.

Well, I guess we're not eating out every day anymore.

What's the source for that? Everything I've seen puts the US natinoal average for 1%-by-income in the low to mid $400K (AGI), and ~$30K globally.

~$400k is the threshold for household[1] income. ~$200k is the threshold for individual[2] income.

[1] https://en.m.wikipedia.org/wiki/Household_income_in_the_Unit...

[2] https://en.m.wikipedia.org/wiki/Personal_income_in_the_Unite...

actually, it seems 200k is 95% (well, in 2014)

It varies quite a bit by the city you live in: http://www.businessinsider.com/income-top-one-percent-us-cit...

I am guessing they are are going by national numbers rather than regional.

In SF household income percentiles are these: Top 5%: $349,693 Top 1%: $558,046

A Lexus SUV is a luxury. Some would argue that living in the SF is as well.

You know, things have gotten ridiculous if we have reached the point where living in any particular geographic area larger than a neighborhood has become a luxury.

He might have a modest lifestyle in the most expensive city in the US.

That's like saying you own a modest house in Beverly Hills and have a mortgage. Well, that's upper class!

> My wife and I combined make well above the limit for 1%-er range, yet we both feel middle class, although upper middle class is probably more accurate.

If the definition of upper class is top 1%, then upper class is accurate, but maybe the top 1% threshold in the bay area is higher than you think?

http://www.businessinsider.com/the-salary-of-the-top-earners...

http://gis.mtc.ca.gov/home/images/motm/motm212.pdf

I made the argument on another comment that most "rich" people still work for a living, it seems you're a good example of that.

And yeah, having done it, I know first hand how you can be rich on paper, but live in the bay and feel like a college student.

Don't know if it makes you feel any better, but roughly 99% of people make less money than you do, and also don't feel rich and will also be hosed if they lose jobs. ;)

So some dude did some inteviews some day in some shopping mall and came to the conclusion that "everybody thinks they're middle class"

While 4 days ago there was an opinion piece on gallup.com quoting research that 51% of americans now say they're middle class[1], a long-time (not all-time) low.

I'll take the Gallup research, and dismiss piece this as fabrication and factoids.

http://www.gallup.com/opinion/chairman/195680/invisible-amer...

My definitions:

Wealthy -- I don't have to work to maintain my lifestyle.

Poor -- I can't afford basic necessities even when I work.

Middle-class -- everyone else.

Now for sure there is some variation on middle-class (upper/lower/truly middle) and that's basically a function of disposable income.

But this definition at least accounts for variation in regional cost of living and even adjusts for personal lifestyle choices. Your middle class might be my wealthy because my lifestyle is cheaper.

These are American definitions and not European ones, where working class are people who work for someone else for a living, while the middle class works for themselves. I guess it depends if you have your FU money or not.

I suspect that if you asked most on the street of your average European city, they would use something close to the "American" definition unless they happened to have a background in the social sciences.

I have never heard that definition anywhere in Europe (it might exist but I would not say it's common).

OPs description matches mostly how the UK does it, except we have an aristocratic hangover that confuses the meaning of "upper class"

We also (perhaps because of this) have the term "upper-middle class" to refer to particularly well-off middle-class people; though beyond a certain level you just become "rich"

Wealth doesn't automatically make you part of the upper class in Europe. Carrying a title and being part of the aristocracy, even if dirt poor, however does.

Rich? Definitely. Upper class? Only if you're accepted by the other members.

    > mostly how the UK does it

With the addendum that it - or your perception - will always have more to do with your parents and upbringing than your salary.

America's socio-econmic classes, by stark contrast, are all about the money.

That class is all about the money in the US is not entirely true. If you have lots of money but don't know the social rituals, people will notice.

"new money" is after all a thing.

How the UK does it: https://en.m.wikipedia.org/wiki/Great_British_Class_Survey

But it's worth mentioning - unless you'd disagree, and I've misread - that working "for themselves" doesn't have to mean self-employment.

If your lifestyle basically consists of stuff you could do for free, like cycling and internet, does that mean you're wealthy?

The trouble with this definition is that your lifestyle changes with your income. If I were making millions I might need yachts and private jets to maintain the good life.

There seems to be a lot of confusion in this article and the comments between class and income-bracket. The bourgeoisie (the historical middle class) were precisely the nouveaux riches. In Europe especially, class made a lot of sense when you could be either impoverished nobility or a wealthy son of peasants. Class was a useful category in early capitalism, but maybe less so in late capitalism (especially in America where we are all essentially bourgeois). I think this survey, if anything, shows the increasing irrelevance of "class" in our society. There is no more class, there is just income, wealth, etc.

Hey look, a rehash of my Sociology 101 class from freshman year of college.

Most Americans call themselves as "middle class," and most Americans believe that social mobility is higher than it actually is. In fact, since the 1970s, economists and sociologists have known that social mobility in America is not much higher than in Europe.

This is old news.

"Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires." - John Steinbeck

"'Rich', by the way, is anyone with more money than you."

A quote from a teacher of mine that has always stuck with me. It explains so much.

Yes, even the wealthy are constantly comparing themselves to people richer than them, and complaining about it.

Look at this rich guy, always complaining.

I doubt that multi-millionaire think that they are 'middle class'. Or a person living on welfare. Everybody else is pretty much in the 'middle' from very low to very high.

$200k is much, but unless you are extremely lucky or inherited a huge amount, you have to do a bit for such an income. And you have likely a long time behind you earning less, living in the middle.

Sustained $200k a year means you can retire decades earlier, if you kept expenses low.

"Most millionaires say they're middle class" - http://www.cnbc.com/2015/05/06/naires-say-theyre-middle-clas...

> Billionaire David Tepper once called himself a "middle-class dad trapped in a rich man's body." Most millionaires, it turns out, have similar feelings of wealth denial.

> A majority of millionaires polled describe themselves as middle class or upper middle class despite being among the wealthiest 10 percent of Americans, according to the results of the third CNBC Millionaire Survey.

> Fully 44 percent described themselves as middle class, and 40 percent said they were upper middle class. Only 4 percent described themselves as wealthy or rich, and 5 percent described themselves as upper class.

> I doubt that multi-millionaire think that they are 'middle class'.

Perhaps, but low digit millionaires do think that they're middle class because they've earned their money across the past 50 years. In that same 50 year span they've seen the actual 'rich' earn about billions instead.

Let me give a character construction.

You are an engineer. Salary $120k at age 38. Your spouse is also an engineer. Salary $100k at age 38. You both are the inheritors of your parent's estate which includes a pair of $200k pensions, and 2 houses valued at $800k a piece thanks to 20 years of land values rising in your near DC hometown.

Now your net worth is 2.0 million and rising.

Yet you don't feel like you are 'rich'. Maybe you have kids, can't take 5 vacations a year, and end up comparing yourself to your friends with no kids and greater discretionary income. Maybe because your windfall is from inheritance, you don't think of it as 'yours'.

It's a psychological motif, even if its not the economic reality.

Low millions over 50 years is solidly middle class. That's a couple of teachers saving up responsibly for retirement and paying off their house on time.

This point is often lost in the debate over income and wealth. A public school teacher who starts working at 25 y/o and retires 30 years later at 55 y/o with a relatively modest $60k/year pension benefit has effectively retired with a pension value of $1.3 million (using current lifetime annuity rates). Two public school teachers married to each other with a paid-for $500k home (but zero other savings or assets) effectively have a household net worth of $3.1 million. Government retirees with 'high 3' pensions are the every day millionaire next door types of modern society. I know many of them with multi-million dollar pension values and yet most feel solidly working class because it took them decades to earn the pension benefit and all they see is the monthly check.

True. That's what I was implying. It's "easy" to attain that level of net-worth. Easy as in--if you are so lucky enough as bad things do not happen to you and run out your savings, it will compound over decades to become a substantial amount.

Then if you do single-inheritance, then your child stands to start emerge into their 30s or 40s, starting off with the same net-worth you have now in your 70s and 80s.

It's enough to push them above the middle class boundary, but they will still feel middle class because they grew up with middle class parents and had to work for most their lives.

Most people don't realise that if you own 2+ houses, you literally do not need to work; you could manage the properties indirectly and still earn enough income to survive as a small family.

> It's a psychological motif, even if its not the economic reality.

Absolutely, although it does get a bit silly. At 220k income from salary alone, you're squarely in the top 3% household earners in one of the richest countries on the planet.

Hell, take the rental to price ratio ranging from around 6 (Detroit), to 45 (SF), more realistically 16 (Dallas) to New York (35), let's say the average is 25. That $64k annual household income alone would put you in a bracket where 65% of US households earn less than you, without even having to earn a salary.

I mean, can you imagine walking into a room of 10 people including yourself, and finding you have a magic necklace (two $800k homes generating rent) that earns you more monthly income than 7 of the other people who likely work quite hard, without barely having to do anything... and on top, if you walk into a room of 100, the income including your actual salaried work earns you more than about 98 of the other people... and still feel'middle' anything?

That does sound super silly, until one realizes your point: such people don't mingle deeply in the aforementioned groups of 10 or 100 economically uniformly distributed Americans. They mingle in groups of the top 5%, and feel quite 'middle' there.

> They mingle in groups of the top 5%, and feel quite 'middle' there.

I agree. I'd like to propose a thought experiment to anyone listening: how far back in your personal history do you have to go before you find a friend or a close acquaintance that doesn't share a similar life status as you?

For me, I have to go back to my friends before grammar school to find anyone where our life paths have diverged so strongly.

If success if the norm, then relative success can make you feel middle-classed vis a vi your friends, even when you most certainly are not.

The symbols on the quotes are mysterious, and no key is given. First block is D/R (democrat, republican). Second is age range. Fourth is gender. I thought the third might be race, since a couple of people have a pink W (white?) and a couple have a brown M (mixed race?), but some have a green dollar sign or cents sign.

edit: someone has both a W and a cents sign.

The span element's class is the only legend I could find.

  1) "liberal,young,poor,non-white"
  2) "liberal,old,non-white,woman"
  3) "conservative,poor,white,man" / "conservative,young,white,woman"
  4) "liberal,poor,woman"
  5) "liberal,young,rich,man"

The blocks aren’t strictly positional. Clicking them reveals a legend, but I thought they were clear enough: $ = rich, ¢ = not-rich, W = white, M = minority. So “D$W[male sign]” is “blue state, rich, white, male”. (Oddly, HN won’t let me insert the “male sign” character.)

Interesting. I could not get anything by clicking them in my browser.

Click it and you get a full page description.

If you click and hold on the symbols, an overlay appears that decodes it.

I had to double-tap and hold... would never have got it without comments here - what a bizarre UI!

That's the ticket -- now I can see it.

You can click the symbols to see the category names

This page explains the symbols: https://www.bloomberg.com/features/2016-america-divided/

(Ugly as sin though)

I must be the only person who adores Bloomberg's design/presentation. It's a very interesting intersection of flat-modern and brutalist, and completely unapologetic. So much of their content also features distinct art and layout in a way that conveys a special amount of care went into its publication, but always within a familiar design language.

I understand that it's not appealing to everyone, but I am always surprised at how much it gets ragged on.

What on earth is that graph showing? 2% of households make $150k, and another 2% make $151k, and another 2% make $150.01k, etc. It makes no sense at all. I think they meant to use a bar graph or histogram, and perhaps those circles are the boundaries between the bins. But then why are some much wider than others? Do 7% of households make between $30k and $90k? Normally with a bad graph, you can work out what they meant and it's just misleading, but this is too wrong to mean anything.

On a second look, the sharp edges of the curve appear to be $10k boundaries which with the text about $20k-$30k would mean they're the bin boundaries. But that assumes the text was written by someone who knew that and wasn't just reading off the line.

I came here to say this. The more ticks there are on the x axis, the lower the y values will be. The graph hurts my head.

It should be an S-curve cumulative graph, I think.

Presumably the probability density function, https://en.wikipedia.org/wiki/Probability_density_function

I think I'm probably a good poster child for this. It's not just about income it's also about wealth.

My household income puts me in the top 5% (my wife and i are engineers) but my wealth and savings barely puts me in the top 40% thanks to student loans, buying a house, having a kid, and short work history. So according to income I'm upper class. According to wealth I'm middle class. I don't think you can truly feel upper class until you fall in the top percentages in both.

I think it falls under:

- Upper class: you could retire today without impacting your lifestyle

- Middle class: you will retire someday but you'll have to cut down on your lifestyle

- Lower class: you will never retire unless you go on disability / welfare

I love the retire who isn't middle class, but has 2x the average family income while retired.

How you live and how much money your make are related but it's not absolute. Local cost of living is a huge factor. Plus you can be an idiot (when it comes to spending money) with a larger paycheck and end up with a lower quality of life than your frugal neighbor.

This is a very good point. Even if you make 200k in NY, its equivalent to 100k in Arizona. Or at least something along those lines.

Depends where you live in NY. I make 80k in Sunset Park and I live comfortably. 200k would mean I don't have to worry about money much.

That said, no kids.

> live comfortably

> don't have to worry about money much

It's interesting how those two phrases can mean the exact same thing to one person (me) and be apparently so wide apart to others.

How can you live comfortably while worrying about money a lot?

I don't worry about money now because I save and budget appropriately. I meant that with 200k I wouldn't have to think much about money at all. Sorry for the confusion!

Ah :) thanks for clarifying!

Local cost of living is relevant, but if pay is also higher, they can still save more relative to their peers in lower cost locales, and then retire to a place that costs less.

Depends on how the pay scales. If they pay 70% more to live there but only make 50% more, they probably aren't able to save much more than their peers. This is also where the regressive nature of income taxes start to hit.

I think you mean progressive rather than regressive. $200k in San Francisco is still much better than $100k in St. Louis.

Interesting that the interviews were done in Minneapolis, a city I'm currently spending the summer in. This city is big on public services - public transportation is particularly good. Probably everyone in that article took the Metro to the Mall. The libraries are plentiful and excellent, and there are really good amenities in Downtown. The rent/home prices around here is also astonishingly good (Note: I'm from LA). Heck I'm renting a 1500 sq ft. house with a garage and a yard for $1500/mo, and that's kinda pricey. You could probably find a reasonable 1Br around here for $400/mo.

tl dr: $30k really is middle class in some American communities.

Chances are that even if you make $500k a year you'll still have lots and lots of social interactions with people earning much less. Even most of your friends and family will earn less.

That's why it isn't surprising to me that most people choose to identify with the middle class, especially if you consider that most people associate with this term "normal working citizens".

Maybe it is different once you have so much that you actually do not need to ever work again, but you certainly aren't in this position by earning $200k. You still have to work really hard, often even harder than the average person does.

Is there a commonly accepted definition of middle class? (in the United States; class definition seems more rigid in England)

Preferably something that involves net worth as well as net income; for me rich and poor indicate status of wealth/net worth, which is often correlated with income, but isn't the same thing. Taxed on those with high income are considered taxes on the wealthy, but may also be taxes on people who had a one time windfall, but aren't wealthy.

https://en.wikipedia.org/wiki/Affluence_in_the_United_States...

I am optimistic that many people here retain such a broad definition of middle class- essentially the range between poverty level and one percenters. This shows that most Americans dont want to be indentified as impoverished nor wealthy, despite statistics otherwise. Ironically this flies in the face of media pronouncements the middle class died atbthe end of the 20th century and Trump movement is exploiting to the hilt.

I don't understand what conclusion this graph is going for. It's a real "Therefore, what?" thing for me.

That reminds me of https://en.m.wikipedia.org/wiki/The_Status_Civilization

Sci-fi society where eveyone thought of themselves as middle class but it was either upper middle class or lower middle class.

Obama and Congress wrestled as to what is middle class when dealing with permenantizing the Bush tax cuts- introduced in 2002 and made permanent in 2011. ACA surcharges start at 200K for individuals and 250K for a couple. The highest income bracket at 400K. We are talking about the top 2%-3% here.

Rather than 4 data points is there any large-sample-size conclusions about people who identify as Middle class?

The overwhelming sense I get reading this sort of article is: if everybody insists on drawing lines amongst themselves how will we ever solve the world's most pressing problems, which are clearly beyond the reach of individual social groups or nations?

Don't these definitions have a more solid statistical economic meaning here? As in: middle "class" is the middle quintile of income. This makes the other strata fall pretty reasonably too:

80%-100%: Ruling Class

60-80%: Upper Class

40-60%: Middle Class

20-40%: Working Class

0-20%: Lower Class

Isn't that a data-bias? Everybody think they're middle class because it's the biggest class... meaning that there is an increased probability that people indeed belong to the middle class.

As usual, there's the emphasis on how much one makes, very little on how much one spends. Personally, I've spent the last few years not so much trying to earn more but rather spend as little as possible.

I don't find this surprising...obviously the 200k person has an easier living compared to the 50k but probably they hand out to the same places, have similar houses and generaly their habits are the same.

Here's a good discussion on this: http://siderea.livejournal.com/1260265.html?format=light

A British view: https://youtu.be/K2k1iRD2f-c

Well it is a pretty wide band one would assume.

I think the real problem is people claiming to be poor when they are bang in the middle of middle class.

Apparently no javascript means no text these days. It is obviously done intentionally. It is not like blocks of text require javascript to render. I'd shame bloomberg but the frog is well and boiled now; everyone just accepts that without JS websites aren't going to show you anything. And that is a damn shame.

Well, this is probably because today JavaScript is the biggest middle class generator.

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