The middle class is a frequent topic of conversation, especially during election seasons. Candidates extol the virtues and importance of America’s middle-income families and promise policies that will support them.
But who exactly makes up the middle class? While the experts have a very concrete income-range definition, many Americans have a somewhat different view of that term.
The Pew Research Center, for example, classifies the middle class as those households whose income is two-thirds to double the national median, which was $57,617 in 2016. Using that standard, a middle-income three-person household earns about $45,000 to $135,000. A single person needs to earn between $26,000 and $78,000 to qualify as middle-income.
By those definitions, the middle class now makes up just over 50 percent of the U.S. population, according to a recent Pew study. That’s down from 61 percent in 1971.
Despite those figures, 68% of Americans consider themselves middle class, according to a new report from Northwestern Mutual. Just over 50% of the survey participants said that earning between $50,000 and $99,999 qualifies a household as middle class. Top of FormBottom of Form According to another 20%, middle-class folk earn between $100,000 and $499,999. (According to the experts, a three-person family with an annual income of $135,000 or more is actually upper-class.)
Why do so many Americans identify as middle class? Because they like being associated with traditional middle-class values and traits, I suspect. Participants in the Northwestern Mutual study said those traits include humility, a strong work ethic, thriftiness, and home ownership. It’s also possible that high-earners don’t feel very upper class these days given the skyrocketing costs of things like housing and college for the kids. A $100,000 salary ain’t what it used to be, that’s for sure.
The real takeaway for me is that external labels are meaningless. It doesn’t matter how some economist wants to classify your household. What matters, to borrow from legendary DJ Casey Kasem, is that you keep your feet on the ground and keep reaching for the stars.
Very middle-class advice.