The Upper Middle Class Trap
ofdollarsanddata.com
ofdollarsanddata.com
The real way for everyone to escape this perceived hedonic treadmill is to build more housing, invest in public transit infrastructure, and have affordable childcare.
It’s like you’ve commented on the wrong article or something. This article was talking about marginal costs and benefits.
https://en.wikipedia.org/wiki/Upper_middle_class_in_the_Unit...
Commute times are a real factor in deciding where to live, and which schools to pick. In the Bay Area, the only real solution is living closer to work, which requires over bidding & selecting private schools if they picked the wrong area.
Almost everybody who is upper middle class in the US doesn’t live in San Fransisco, so find a better comparator.
Also $160k household can be very different in terms of childcare costs depending on how many people in that household are working, and is an actual problem for double income families with young kids in HCOL areas.
Their kids still ride the school busses. Upper-middle class aren't in a position to hire a limo and driver to take the kids to school.
> and have no issues paying for childcare
Typically because both parents are working high pressure jobs, which makes childcare a mandatory expense, not a luxury.
You and some of these other responders are clearly conflating the middle class and the UPPER middle class. The upper middle class made >$160k in 2025.
https://en.wikipedia.org/wiki/Upper_middle_class_in_the_Unit...
I was figuring upper middle class was around 2x that (250-400k) in desirable areas like the Bay Area/Seattle/NYC. Which after mortgage/rent, car payments, school fees... still isn't private-limo or even stay-at-home-parent money
Nobody said anybody is taking a limo, I have no clue where this straw man obsession of yours even came from.
Depending on which part of the country you’re in, 160k absolutely is stay at home money for the (most likely) wife, who would also be picking up the kid(s). Sure, that isn’t upper middle class money in San Francisco or NYC, but it was surely obvious nobody was saying it was in this context lol.
Legit this thing with you and limos is so weird. You realise limos basically don’t even exist anymore except as a gag for high school proms, right?
The article is written by the COO of a NYC-based wealth management firm, so it very explicitly is the context.
> Nobody said anybody is taking a limo
"limo" in this context is a shorthand for whatever form of 3rd-party individual transport you choose. Taxis, uber black, or the nanny dropping the kids off at school all work out much the same (albeit the old-money NYC folks are absolutely still rolling with their private drivers)
Most of the kids took the bus, unless they were old enough to drive themselves.
Welcome to the rural upper middle class. Bonus points when the bus lets the parent out onto the road ahead of them after loading their kid onboard the bus.
I guess this depends what you mean by issue. One can pay for it but eventually (especially for multiple children) it crowds out other things.
The price forces a consideration of marginal costs and benefits instead of being able to think about it in terms like "my child would be happier here" or "I value education in classics/fine arts/religion/whatever else a private school teaches for non-financial reasons."
Their personal driver can pick them up if needs be.
This is maybe only a thing in the handful of US cities with a well-developed subway/tram system? I've not seen many upper middle class folks taking the bus in other US cities
Such an American thing. Not sure what to make of it.
For example, the practice of funding public schools with property taxes was found unconstitutional in Ohio back in ‘97, but the Republican-held legislature ignored the ruling and refused to create an alternative. The practice continues even today.
https://en.wikipedia.org/wiki/DeRolph_v._State
https://ballotpedia.org/Party_control_of_Ohio_state_governme...
Side note, “public school” here means state-owned and “private” means “owned by private individuals”, which I have heard is the opposite nomenclature to what’s used in the UK?
For upper middle class vacationers taking a trip through Paris, Barcelona, and other big name European cities to visit nice hotels and restaurants is probably the most stereotypical vacation possible. For some people that is their ideal trip, but the demand for those locations is off the charts. Given the thousands of alternative vacation spots out there, most people would have a much better time and save money going somewhere less obvious.
In my view, we have two classes: People who have to work for a living, and people who don't. Most of us are in the first class: Our wealth (net of spending) does not grow unless we are working. We're N missed paychecks away from being broke. That N may be a high number (what some people call middle class) and that N may be a low number, but everyone in this class has a similar set of problems. Yes, small-N is more difficult living than big-N, but we are more similar than different.
The second group, the people whose wealth net of spending grows without them working, live in a totally different world than the rest of us and have totally different life experiences and problems. They simple don't worry about paychecks the way the rest of us do.
So this whole "upper middle class" distinction is IMO not very important. Now, more than ever, we need class solidarity, not more labels.
Economic class is the more useful framing and it's exactly as you say I think, you either work to put your bread on the table or you own things that put your bread on the table for you. There's other features of economic class but that's the dominant one. This is the class difference that matters the most in my opinion when it comes to explaining aggregate motivations.
I would propose a slight correction: you either work to put bread on the table, or someone else works to put bread on your table.
The capital return from investments does not come from the assets themselves, it is extracted from the labor of workers and from the externalization of costs onto public or shared resources, for which the working class ultimately, and disproportionately, foots the bill.
If that were true, then the laborers could generate the same returns without the capital. Which is obviously not true.
But the core of your point certainly stands. "Higher wage" vs "lower wage" does not make a big difference in terms of our fundamental interests, and the interests of workers are far more similar than people realize.
You're confusing "experiences" with "interests." Worrying about paying your mortgage isn't an "interest" you have in common with someone else. It's an "experience." But people with similar experiences can and often do have conflicting interests.
What about the 10 year NVIDIA employee who held on to every stock grant and bought at every opportunity?
1) Must plan to buy a meal out.
2) Must plan to take a vacation.
3) Must plan to buy a house.
4) Must plan to pass it on.
...and that these are useful subgroupings for large-scale discussion.
In feudal times, kings and barons needed lesser gentry to carry out their plans. "Billionaires" likewise need armies of professionals to run their organizations. This group "works for a living," but that's a superficial distinction. In reality, those peoples' financial interests are strongly linked to the interests of the billionaires. There's a lot of people who "work for a living" that sent their kids to college by helping paper up deals that moved factories and jobs to China. The fact that those lawyers and accountants and bankers also "work for a living" was only a superficial similarity they shared with the factory workers whose jobs were outsourced. What dominated was the material interest--one group had skills that enabled them to benefit from globalization. And another group lacked those skills and suffered from globalization. You'll see the same from AI.
Your "class solidarity" has had the opposite effect of what you probably intend. The more the upper middle class started seeing themselves as "part of the 99%," the more they diluted the mission of organizations that advocate for working class interests.
Courts will probably punish self-representation by AI just as heavily if not more so than self-representation without AI.
Lawyers have a de facto monopoly on legal practice, and too many politicians are lawyers or ex-lawyers for that to change any time soon. There’s not much opportunity for class consciousness to manifest there.
So where are they? They have a foot in both worlds. And there are tens of millions of them. They work, but they're taking what they can from what they earn, and using that to bootstrap them toward the "don't have to work" category, but they aren't there yet. Those people are fundamentally different from "working class", even though they work.
I think these are still group 1. Without their job pumping their savings/investments, they are back to "N paychecks away from broke."
At the inflection point where their spending becomes less than their passive income, they move over to group 2.
This is a bit blurred by wealthy people who could retire and yet keep working, and people who have to retire despite not having the money to live comfortably.
But everyone stops working eventually, one way or another.
Absolutely, this is something I always try to explain regarding this topic.
Of course it is a lot more comfortable if you can live for two years without a paycheck vs. if you can only make it to the end of the week.
But at a structural level, both those people are still working stiff who will need that future paycheck. So they (we) are much more similar in life experience than different.
The people who are truly different category are those who will never have to work.
That kind of depends what you're measuring, doesn't it? A better educated population is presumably generally a good thing. My life is probably more interesting because I spent 4 years at university learning.
Is that worth the price? I don't know, but it's not the same place.
The author is pointing out that spending gobs of money on expensive educations is no better than the public education that is either free (high school) or cheaper (public colleges.)
I've lived this, too. My parents sent me to a private high school, and later when I found rankings in my state, my private high school was no better (or worse) than the free one in town. I was no better or worse off, I probably would have kept most of the same friends, and probably would have gotten into the same colleges.
Then, my Dad pushed me to a "fancy" private college. The professors were just so-so, and I should have transferred. (I didn't know better.) Later I found rankings and my "fancy" college ranked poorly, but the public college nearby was ranked significantly higher.
After graduating from college, I bumped into some people from high school, and we all agreed that our guidance counselor gave us horrible college advice. Had I gone to the public high school, would they have pushed me towards the better public college? I have no idea.
> The ironic part is that the data supports this. … And, as I demonstrated last year, premium travel experiences aren’t what they used to be.
On one hand I see the author’s point but anyone who’s flown the last decade will also see economy has become increasingly a shitty, cramped experience, where you’re treated with a certain level of baseline disdain and distrust from airline staff.
For housing, agree on living below your means, but it’s the same issue. Housing on the low end and middle price ranges is in many places most competitive, with multiple bids over ask for a fixer upper with major issues. For general goods and services, companies are extracting every ounce of value they can from budget offerings, usually by sacrificing quality to drive down cost.
I think the author sees this as an upper middle class issue because that’s their experience and lens but the truth is everyone is getting squeezed, and I’d argue the value prop on purchasing essentially anything gets worse, not better, as you try to save money.
I grew up poor. Not like destitute or anything, we had food and all the necessary basics, but there were 3 of us sharing a 50m^2 apartment on a single income with a dad who wouldn’t pay child support. So it was kinda tight.
Now I’m sorta upper middle class in SFBA. There’s 2 of us sharing 1500sqft, each saving almost 2x/year than my parents salary was back when times were tough. The fear of no-money never quite leaves you.
Here’s what I learned: Buy the most expensive thing you can afford. Use that thing until it dies. Do regular maintenance.
Thought I was super clever when I figured that out, but it’s just the Vimes Economic Theory of Boots – https://en.wikipedia.org/wiki/Boots_theory
Also never try to keep up with the joneses or buy things just for status. Unless you can leverage that status into financial opportunities.
For everything or specific products?
> For everything or specific products?
I mean, it depends? You probably dont need gold laced toilet paper but a pair of shoes that lasts 10 years instead of 2 years is probably worth it.
FWIW I think SFUSD changes the public/private math a little: you can live in a 3m house and the neighborhood school for you is 2/10 on great schools or less. I’m not saying this rating scale is perfect but am saying that 2/10 is probably pretty bad. Also FWIW 1/3 of the school age kids in SF go private.
The collective "lifestyle creep" where the consumers are competing can cost everyone more while resulting in worse outcomes overall. Almost like reverse capitalism. Instead of producers / sellers competing (on quality and price), there is just so much demand from consumers that they are forced to sacrifice quality while paying a higher price.
Or lemme put it this way - $1.5 million buys you a single family home with a backyard in outer sunset, but only buys you a townhouse with no backyard in the Tri-Valley, but the family in outer sunset will have to send their kid to a private while the Tri-Valley household kid will attend some of the best public schools in the nation.
Machinery at the dawn of the industrial revolution was supposed to be a time-saving miracle that freed capitalists from having to deal with workers, and also freed workers from backbreaking labor, letting them spend their hours in the pursuit of leisure.
Of course, the opposite happened. Machinery meant workers could produce more output in the same amount of time, so they didn't work less, they worked at least the same and eventually even more to keep up with competition and the demands of consumers. It took decades of unrest and bloody conflict to give us the 8-hour workday.
This article is rediscovering that same history, but for a different class. AI is to white-collar knowledge workers what steam-powered machinery was to the rough-handed working class of the 1800s. It promises capitalists freedom from having to deal with highly-paid knowledge workers, and it promises highly-paid knowledge workers freedom from their labor so they can spend their time in the pursuit of leisure.
Look to history to see how that worked out.
The upper middle class have a leg-up and motivation for leveraging AI, as we are still involved with optimizing financials, time, and maintenance of lifestyle through careful planning. Like we asked Google before, now we ask Google which redirects us to their LLM to answer the questions more fully, along with actionable plans we can afford to implement. We take this journey multiple times, on a daily basis. We definitely noticed the increase in AI usage YoY for the last couple years.
I'm guessing the upper class and above, generally don't need to worry about practical details in the same way, delegating that responsibility (to someone who will use AI eventually). Maybe it feels like it's a tool best leveraged for our economic position because we're already trapped. Maybe everyone will feel this way.
"Just buy less house" sounds very avocado toasty. Anyways, the actual way many people are "escaping the trap" is by not having children and not buying homes. Or at least delaying doing those things.
If anything, the collective action problem is political. But it's very systemic. Simply voting for a good representative isn't enough unless those representatives push for systemic change (and the right kind at that).
They marvel at the fact I have an office job and insist that I must dress very properly. I think one should question that and why their job (which they were proud of) no longer exists here and the ones that do exist don't employ locals. The result is that many of my generation are competing for those "prestigious" "high earning" carreers.
"One ofthe highest earning careers available" would suggest a job that paid you at least $200k over median; median is livable so you could have been saving at least $200k/year. You'd have had $2M after 10 years as a downpayment, which would easily cover anything a pair of "odd-job" self-builders had 2 generations ago.
What am I missing/getting wrong?
So, price per square foot may not be the whole story. They are often nicer homes with the same square footage. Some improvements are superficial but there are real upgrades too.
Who loses? Home buyers who would rather save money by buying a house that hasn’t been fixed up. If you wanted to buy the same house that the people there lived in fifty years ago, you can’t, because that house is gone. But other buyers presumably thought it was worth it.
Lower/middle class isn't exactly having a good time with housing either
I was reading a book about paying yourself first, "The Richest Man in Babylon." He spotted that and we had a short conversation about money, in which he recommended another book about personal finance, "The Millionaire Next Door," an enormous amount of which is about not buying into the Upper-Middle Class Trap.
I walked directly to a bookstore, bought it, and while I am not wealthy, what I do have I credit largely to that book. Yes, it's a book that could be a podcast episode or series of blog posts. But no matter how you consume the wisdom or where you get it from, consider this my heartfelt endorsement.
And yes, The Volvo V90 Estate in my garage was purchased used. And even then... We vacillated over spending that much to replace our XC70 Estate, also purchased used.
> Individuals with the highest incomes tend to use AI the most. This is a rational response if you believe that AI is a serious threat to your high-paying career.
I guess the good news is that TFA proves there are still some instances left of good, old-fashioned, human-produced sloppy logic.
Huh? No. If anything, participate harder. I am not going to go into the public school example author gives, because anyone in US ( including left leaning people ), know full well that public school is only good if it is in a 'good' district. If you really want to drop education cost, home school and hire experts to tutor your kid. Dunno, if opting out of life niceties is a good either for that matter.. or from AI..
I get it is an opinion, but it is also such a bad advice overall.
Customer surplus has been optimized away. Or put more simply: deals have disappeared.
Honest question for you - when is the last time you were just out and about, not really looking, and said to yourself "wow that's a good deal" from a find?
It happened to me once last year and it hit me like a lightning bolt that I used to feel that regularly and now it was a novel experience. Not even a decade ago companies priced things more aggressively and there was a sense of pride in making things broadly available. The customer was king and all that.
Post-covid though, instead of leaving some surplus on the table, including a bunch of extras, and trying to please as many people as possible, the relationship has completely flipped. Companies now proudly price things and engage in business practices that are design to extract as much as possible and turn people away. Customer service everywhere has gone down the tubes. Take it or leave it is now the default behavior of most companies.
It's a phenomenon related to inflation and enshittification but more anti-social which is why I think it hurts more. Instead of approaching most business interactions with a baseline feeling of positivity I now have to actively defend myself from being taken advantage of everywhere. Even paying more to get a "premium" experience isn't a defense. No wonder everyone is miserable.
For every other 'sale', companies have access to incredibly amounts of pricing and behaviour data. Pricematching any consumer good for a deal is more or less dead, if you wait for a specific product go on sale, it will be at the same % across multiple sites (assuming they don't do SKU differentiation per retailer to say it isnt a like for like price match).
If there's a trap for the upper-middle class, it's for the W2 earners. The federal tax code essentially disqualifies high-income W2 earners from virtually every deduction. Both parties wind up soaking these taxpayers because they
- make a lot of money,
- don't own a business, and
- don't have an organization like the Chamber of Commerce to lobby on their behalf
When Republicans get into power, these people are likely to vote Democratic and are therefore okay to stick with the bill after cutting taxes for dentists, lawyers, and corporations. When Democrats are in power, these people are (as ever) not "paying their fair share", so they need their taxes hiked to pay for free stuff for people who don't vote for Democrats. And then they'll also be disqualified from taking advantage of those new benefits/entitlements.