A couple months ago, I was having a discussion with a friend when I made reference to how tight money was back when my wife and I were making $10 per hour during college. My friend reminded me that $10 per hour for dual-earners, or roughly $42,000 annually is actually considered to be a middle class household income by almost every definition.
Once I researched it and realized my friend was exactly right, it actually made sense. Money was tight at the time, but we were able to afford all the necessities, pay our bills on time, and still have some money left over for extras. I suppose that’s exactly what you’d imagine a middle class household would be like.
That comment by my friend, though, prompted me to go on a wild tangent about how silly it is that we divide ourselves into separate social classes based on a dollar threshold of income.
What Does it Mean to be Middle Class?
The term “Middle Class” is considered to be of political importance because it typically represents the income range of households that are financially comfortable. That is to say that the middle class is not supposed to be affluent by any stretch of the imagination, but they shouldn’t necessarily struggle with money, either. It’s supposed to be a happy medium, so to speak.
As I’ve said, there are many different methods people have used to segment out the United States population by class, and they vary wildly based on the creator’s philosophical, economical, or political bend. Basically if you’re above poverty level but you’re not affluent, then you’re generally considered to be part of the middle class. The range that I agree with most was estimated by sociologists William Thompson and Joseph Hickey, in which a household income of $35,000 to $75,000 is considered lower middle class and $100,000+ to be upper middle class (with $75,001 to $99,999 being the implied normal middle class).
The problem here is how one chooses to define the middle class. Some argue that it is a static income level based on the average costs of goods and shelter. Others insist that it’s an ever-changing level based on the median household income in the US. For the latter, the idea would be that since the median household income in the United States based on the 2012 Census was about $51,000, then that would indicate the income level needed to achieve an average American lifestyle – thus $51,000 must be the dead center of what is considered the middle class.
Why This Whole Thing is Silly and Political
Using Thompson and Hickey’s definition of $35,000 to $75,000 as being lower middle class, the accuracy of this estimate really depends on where in the United States you live, right? A $35,000 household income is barely enough to get by in a place like New York City, but in my old hometown of Eupora, Mississippi, $35,000 will get you half-way toward paying off a decent house on a couple acres of land. The cost of living can vary wildly depending on your area, thus what we refer to as a middle class income for the United States may not have much relevance to you if you live in an area where the cost of living is excessively higher or lower than the national average.
The other issue I have with discussing things in terms of classes is that I believe it undermines the role that personal financial management plays in a family’s financial well-being. Your hobbies, habits, and financial savvy will have an enormous influence on how much money you have left over at the end of the month, regardless of how much money your household makes. A household making $75,000 per year but has a paid-off mortgage and no student loan or automobile debt likely has excess monthly income rivaling that of affluent families.
A lot of political effort goes into debating whether the middle class is shrinking, or whether one party or the other is taking the correct approach to help out the middle class. I don’t want to minimize that discussion, but at the same time it is important to understand that you have a great deal of control over your financial well-being regardless of what economic class you’re listed in.
Don’t be anchored by the class in which you’re designated. You don’t have to make $200,000 per year to be affluent. A well-managed middle class income can often rival affluence.