DESCRIPTION Generally speaking, “middle-class” refers to households with incomes that are higher than those of the working class but lower than those of the upper class.
The middle class can be characterized in a variety of ways. According to Pew Research Center, it refers to households with yearly incomes that are between two-thirds and two times higher than the national average.
It takes more than just income to qualify as middle class. Your household’s size, location, and other factors also play a role.
It is possible to be categorized as middle class in one nation but lower class or upper class in another. The same is true for your middle-class status, which might change as you advance or regress in your profession.
The average middle-class person has adequate spare income for things like eating out, travel, and entertainment. To buy a car, a house, or to put your kids through college, you frequently need to take out loans.
Examples of the Middle Class and Their Definition
The middle class cannot be firmly defined in any one way. But the three most typical definitions are as follows:
- The middle class is defined by Pew Research Center as adults with annual household incomes between two-thirds and 200% of the national median (adjusted for household size and local cost of living).
The median household income in the United States for 2020 was $67,521.
This meant that if you earned between $45,014 and $135,042, you were regarded as middle class.
- The middle class, according to the Brookings Institute, is comprised of the middle 60% of households (or middle three quintiles) in terms of income.
The range for middle class status for 2020 was $39,479 to $109,732, which was a little different from the range provided by the Pew Research Center.
- According to the Urban Institute, a middle-class adult is one whose annual household income is between 150% and 500% over the federal poverty line.
The federal poverty line for a household of three in 2020 was $21,720.
Accordingly, if your total yearly income was between $32,580 and $108,600 and your home size was three, you were deemed middle class.
- Other name: middle class
The Workings of the Middle Class
Families in the middle class aren’t just defined by their yearly income. They can also be identified by their goals, career, and level of education.
For instance, the so-called American Dream is something that many middle-class families aspire to. They aspire to purchase a home, have a comfortable retirement, and have the iconic white picket fence. They often hold white-collar positions like managers, administrators, lawyers, and accountants and have higher college education than lower income classes.
Even though members of the middle class sometimes struggle to make ends meet, they frequently have enough money to spend on amusement and the occasional trip.
Due to property, people in the middle class may have a positive net worth and equity built up. To buy a car or send their children to college, however, many middle-class families cannot afford to do so without first taking out a loan.
Families in the middle class are likewise susceptible to the time vs. money dilemma. Either they put in longer hours to earn more money, which leaves them with less free time, or they forgo earning more money in order to spend more time with their families, which reduces their lifetime earnings and decreases their chances of achieving adequate financial stability.
How Middle Class Are You?
Your level of middle class status isn’t solely based on your money. It also depends on where you live and how big your household is. For instance, $80,000 goes a lot further in a little Georgian town than it would in San Francisco. Additionally, that sum would go a lot further for a single person than it would for a family with five dependents.
You should be aware that your middle-class position could change annually. Nothing is ever certain.
Consider that you are now a graduate student making do with a $15,000 annual stipend. You would be categorized as a low-income class. As you progress in your profession after graduating, your education may propel you into the middle class or even the upper class.
You may determine whether you are middle class by using one of the many household income calculators available. The salary calculator from Pew Research is one well-liked choice.
Where you live can also affect your socioeconomic standing. In another country, you might be considered middle class or upper class even though you are considered to be a member of the lower economic class by American standards. The same goes for being middle class in another nation but belonging to a lower income class in the United States.
For the first time since 2011, the median household income in the United States fell in 2020, falling from $69,560 to $67,521. The epidemic and the accompanying recession were the direct causes of this 2.9% decline.
In 2020, the poverty rate rose by 1 percentage point as well, after a steady five-year drop. More than 37.2 million Americans live in poverty today, which is 3.3 million more than in 2019.
However, the effects on the middle class were adverse outside of the United States. According to a Pew Research report, the global middle class shrank by 54 million individuals in 2020. At the same time, 131 million more people joined the lower income and poorer groups. The increase in poverty in South Asia, East Asia, and the Pacific was a major factor in this dramatic transition.