Changing definitions of middle class

So I came across this article the other day which talks about the cost of living on one of the coasts currently.

In this article, the author makes the claim that it now requires an income of $300k/year to be middle class and support a family of four.

They're not saying that it's not possible to support yourself on less, but only that that's the minimum for a decent lifestyle. In the article, they break down expenses, taxes, budgets, and so on. It includes things like an annual vacation, a weekly date night, child care, mid tier clothing, a modest (1800 sqft, no yard) home, a single vehicle (SUV), minimal retirement savings (max IRA contribution and nothing more), and so on.

By some standards, those are luxuries, but the argument is that this should be middle class. It also puts forward the argument that approximately $150k would be the same lifestyle in the midwest rather than a coast.

I find this really interesting because I read quite a few websites and everyone who thinks they're doing well and claims to be middle class, is making considerably less than that. For some examples:

I read here, many, many, many vocal posters make the claim that they're doing well, most of those claim at or near 6 figures, but very few claim $300k household. In fact only one does that comes to mind and that particular poster is in investment banking and has a well paid spouse as well, making the claim perfectly believable. Most of the others claim around $100k, but then also claim to be working their job, and doing side gigs for additional income. And they consider themselves wealthy.

Since when did we as a society decide that working 12+ hours a day for a lower middle class wage (by midwest standards) should be the ideal? Why did we romanticize that? Why is that a virtue? To me that reads as the person is getting completely and totally screwed.

On the coasts (any ocean bordering state, excluding the Gulf) $100k does not go far. It is essentially working class. I pay a lot of attention to career blogs/forums for my sector which is Computer Science. $100k is pretty much the average offer for a new grad on the coasts, and you can't do much with that. In fact, at my companies Bay Area sites, which involves some of these positions, our CS new grads make about $110k to start, and are given heavily discounted corporate housing because it would be impossible to support themselves without it. I know people aren't going to believe this, but $110k is half of what a janitor makes in that area.

Here's some salaries from that article:
Bay Area Rapid Transit Janitor - $270k
Bay Area Elevator Technician - $290k
Facebook/Google new grad developer - $135k
Banking associate - $210k
Airbnb - $250k
Startup director level - $150k
College professor - $250k
Doctor - $350k
Teacher - $55k
VP of marketing - $250k

These are the salries in an area where a family of four requires $350k for a middle class lifestyle.

Why are we still calling $50k middle class? It's a complete delusion, you're not in poverty at that wage, but you don't have any wealth either. It's instead what I would call comfortably poor.

Now, since I know many won't read that article, I want to add a little exercise for the readers here as ATS does have a lot of rural folks that operate on a totally different monetary scale.

Here's the expense sheet, go ahead and fill it out. I'll fill one out for myself too.
finance.yahoo.com...

In the income section, make note to only give yourself the child credit if you have children. And if you're single, remember the single deduction is only $12000

Here's mine, for reference I live in one of the lowest cost of living areas in the US, meaning my money goes very far (I lived in this area for a decade on an income of $9000 or less annually)
Net (after taxes/401k) income - $70,000

Annual Expenses:
Childcare - $0
Food for 1 - $15,000
Rent - $10,000
Insurance - $2,000
Health Care - $5200
Children - $0
Vacation - $10,000
Car payment - I buy cars in cash, no payments... we'll amortize a $15,000 car over 5 years though - $3000
Car insurance - $1200
Car maintenance - $2000
Utilities - $3000
Clothes - $4000 (might be high, but I'm in the process of renovating my wardrobe)
529 Plan - $0 (realistically, I should start one of these, I'm never going to have children, but if I somehow adopt or even just want to help someone out I need it set aside)
Entertainment - $7200

That's my lifestyle. That puts me at total expenses of $53,000 with the remaining $17,000 sitting unused for whatever else I want.

Given where I live right now, I feel pretty good about this. I eat very well, I'm dressing nice, I have a reasonable car, and can easily afford housing, with several luxuries. That to me says middle class, but I'm still below the $150 mark.

How about others? Fill it out and see if you can match the middle class lifestyle based on your expenses and budget?

I personally think we're seeing way too many people slide out of middle class and into something else, but still defend that lifestyle as middle class as there's ample people worse off than them.

a reply to: Aazadan

Lol the average wage in the UK is 28K.
Most people I know have comfortable lives, decent cars, party on weekends and go on foreign holidays a couple of times a year.
Sounds expensive to live comfortably in the land of the free.
300? Pmsl! That's way above middle class in the UK, but saying that, most people here only work 37 hour weeks and have 6 weeks paid holiday a year.

a reply to: CornishCeltGuy

In the US, the East/West coasts are highly inflated, the land in the middle is essentially a very depressed third world country. The difference in what a job pays between the two, can vary by as much as a factor of 10.

a reply to: Aazadan

Wow, I forget how big the US is, similar EU example would be comparing wages in the UK to say Romania I guess.

The barefoot child is then new "its me" in America.

So I live in an expensive area on the east cost. And I looked through the expense sheet at your link and a few things struck me as off.

1) The sheet puts child care at $2,000 a month. It even goes into saying they came up with this by saying $20h for 25 hours of Babby sitting. For that to make mathematical sense they think it costs $20h x 25h x 4 = $2000. So first this family of 4 is really a family of 6. But it goes further than that. When you get a babby sister you pay the $20 bucks an hour to watch all four; not $20 per kid per hour. Further once you start needing a babby sister for 25 hours a week you stop using a baby sister and start using something a bit more formal; Day care or in home nanny. Now while these options are net more expensive then a normal $20 to the 16 year old next door for an hour; there per hour costs drop the more kids you have and the more you use them. I have two kids; WHEN they where in day care (run out of a house on the block over from my house) it was under $1500 a month for 40hrs+ a week of service....
Now I capitalized the word WHEN in that last part for a reason; it's a temporary experience. And with a family of 4 kids it is unlikely that all 4 will need care all at the same time.

2) just like the child care expense all the line items are jiggered to be on the high end. Not crazy high if you look at each item alone; but it starts to add up to crazy as you consider more and more lines at the same time. Example:

This person is making the Maximum contribution to his 401K at the same time he's paying for child care (temporary experience) at the same time he's taking three weeks of vacation at the same time he's paying for one expensive date night a week.... As a person who is living this east cost existence and had parents who did ... you never do all of those things at the same time nor do you do them year over year. Its like the perfect storm of expenses, sure it can happen but not very often.

I live on the east cost and truthfully you can live a comfortable middle class life on 2/3rds of what this article states. Your doing upper middle if your making $300k, your not living pay check to pay check like this artical states.

Also sure there are more expensive places to live than where I do. But if your buying a 1800sq foot home in the middle of Manhattan you aren't middle class just because your finding it hard to live on your $300k a year. Your just being silly.

a reply to: Aazadan


One major difference between rural and more populated areas is property taxes. You'd s*** if I told you mine.

a reply to: Aazadan

Most people are unable to accurately identify the classes except for those immediately above and below them. The lower classes thinks 500,000 per year is rich and having a billion is super rich but can't distinguish much of anything beyond that. What they believe is middle class is really upper lower class. The rich can distinguish among themselves but only working class and trash class at the lower end of the spectrum. It's only the middle class that has the most accurate idea.

The middle classes are traditionally the merchants and maybe some professionals. They might own some grocery or clothing stores or they could be much bigger. They might make quite a lot of money but otherwise lack some type of status quality that prevents them from being in the upper class.

Class designation depends on which study you look at. There are more characteristics that describe the middle class, than just singularly income. If this were the case, the middle class would be significantly diminished, such as in the OP's description, which omits other factors.

Other factors, and the most significant one, is having a college education. If you have a college degree, you are middle class, like it or not, or so they teach in universities. The middle class share a work ethic and values. For the most part they are not criminals. Their children are taught to be clean and dressed in clothing of good repair. They have a social network, though work or church, and above average communication skills. There are also personal attributes associated with the middle class.
They don't speak in a very loud voice. They don't call attention to themselves in large groups, they don't scream and carry-on at funerals, but grieve in private. They don't give a lot of personal information except to close friends.

These are facts. There is a behavior, values, and many other characteristics that go along with being middle-class other than just annual income.

Of course, if that is all you are interested in, then, too bad for you.

Class is determined by attitude;

In fact, in a sociology course I once took, it was broken down like this

Upper upper class
Middle upper class
Lower upper class

Upper middle class
Middle middle class
Lower Middle class

Upper lower class
middle lower class
lower lower class

And there were characteristics for all of them, and of course income designations, although those would be moot now because that was a while back.

You also need to take into consideration - location. There are micro-climates for how much money it takes to be middle class. It is ludicrous to compare wages in Manhattan or San Francisco, the two most expensive cities in the country,
to smaller towns in other states. It's not simply a matter of you win the lottery or obtain 250,000 and BOOM- you are middle class. Not so.

Of course, you are talking solely about the East and West coast.

If you want to be middle class in those areas, then you are going to need a lot more. Try living a middle class lifestyle in other areas of the country and those amounts you talk about are considered upper middle to wealthy.

Also, what is the definition of "decent"? That can vary from person to person too.

The only way it takes $300k to be middle class is if you live in a bloated overtaxed mega city. I'm raising a family of 4 quite comfortably in Indiana on $100k.

$300k is the lower upper class in major cities . Don't get me wrong, it is good money but it doesn't really go that far in major cities due to high cost of living, especially real estate. I don't think I'd call it "middle class" but it certainly isn't rich how most people envision rich people.

The thing to keep in mind is that to make that kind of money, you generally need to be located in a major city. Most of the people who make that kind of money tend to be BigLaw attorneys, bankers, doctors, corporate execs, administrators, and business owners. Those jobs are largely found in large metro areas. Also people who make that kind of money usually are at the apex of their careers in their 40s & 50s, not in their 20s. As such, the expenses and family commitments in your 40s/50s are vastly different. You are stacking chips to save for retirement if you are responsible, not pissing money away on luxury goods.

This is one of the reasons I typically have issue with federal tax policy is that they don't account for cost of living. People in that $250-$500k income bracket get screwed by tax policy. The get treated the same as someone making say $10 million but the reality is they have more in common with the guy making $75k. They mostly live in high cost of living areas, however, no one has any sympathy for them so they carry most of the tax burden.

I was born into a poor family but we were happy, loved, and had what we needed.

During my adult life I struggled to get to that place where I was led to believe was my goal. I rode the gravy train for a while and found that it too rich for my tastes and not really worth the ride.

I am now old and content with the little that I have, and trying to have less. I guess you can say that I have morphed into being a minimalist. I have no desire to collect things that will eventually end up in a landfill. I never eat fast food and a rarely eat from a commercial restaurant. My vacations are almost always to be with family and friends home and abroad.

I don't make anywhere near $300K and don't have the time, energy, or desire to run that rat race. A simple meal from my pond and my garden is good enough for me.

originally posted by: NightSkyeB4Dawn
I was born into a poor family but we were happy, loved, and had what we needed.

During my adult life I struggled to get to that place where I was led to believe was my goal. I rode the gravy train for a while and found that it too rich for my tastes and not really worth the ride.

I am now old and content with the little that I have, and trying to have less. I guess you can say that I have morphed into being a minimalist. I have no desire to collect things that will eventually end up in a landfill. I never eat fast food and a rarely eat from a commercial restaurant. My vacations are almost always to be with family and friends home and abroad.

I don't make anywhere near $300K and don't have the time, energy, or desire to run that rat race. A simple meal from my pond and my garden is good enough for me.

It is a rat race. I sometimes wish I never got in it. I'd be perfectly happy out in the middle of nowhere living lowkey and off the land.

originally posted by: DanDanDat
1) The sheet puts child care at $2,000 a month. It even goes into saying they came up with this by saying $20h for 25 hours of Babby sitting. For that to make mathematical sense they think it costs $20h x 25h x 4 = $2000. So first this family of 4 is really a family of 6. But it goes further than that. When you get a babby sister you pay the $20 bucks an hour to watch all four; not $20 per kid per hour. Further once you start needing a babby sister for 25 hours a week you stop using a baby sister and start using something a bit more formal; Day care or in home nanny. Now while these options are net more expensive then a normal $20 to the 16 year old next door for an hour; there per hour costs drop the more kids you have and the more you use them. I have two kids; WHEN they where in day care (run out of a house on the block over from my house) it was under $1500 a month for 40hrs+ a week of service....

$20/hour*25 hours/week*4 weeks per month*12 months/year is $24,000. It's not increased for additional children, they're lumping in both kids at the same time. If you wanted to be pedantic and make it more accurate though you should label it as $20*25*49 weeks (the other 3 are vacation)/12 to get the monthly price of $2041.67 per month. $20 is also close to the minimum.

You also forgot that they also stipulated that this is for young children, if you want private school for your kids, as many do, you'll be paying this while they're in school too. And it assumed no after school care.

This person is making the Maximum contribution to his 401K at the same time he's paying for child care (temporary experience) at the same time he's taking three weeks of vacation at the same time he's paying for one expensive date night a week.... As a person who is living this east cost existence and had parents who did ... you never do all of those things at the same time nor do you do them year over year. Its like the perfect storm of expenses, sure it can happen but not very often.

Why is this not a reasonable thing to do? Should middle class not mean a date night while saving? Maximum 401k contributions are just a given that you should always be doing.

originally posted by: AugustusMasonicus
a reply to: Aazadan


One major difference between rural and more populated areas is property taxes. You'd s*** if I told you mine.

Property taxes are a big factor, but even in areas where taxes are less and we can significantly cut down on the expenses in that sheet the argument is still made that you need $150k for that lifestyle. I live in one of the lowest COL areas in the US (if not the lowest), our median income is $12,000/year. Even with that cheap living, I filled the sheet out for myself and while I did hit the middle class threshold with some room to spare, that was with no kids, and while being in the top 5% in income for the area. That's not what it should take to be middle class.

a reply to: angeldoll

What good is a college education if it doesn't get you anywhere? If it doesn't increase your earnings potential it's a liability (and I say that as someone who has 5 and nearly 6 degrees).

I totally disagree about work ethic and values. My work ethic is that I'm going to put in 8 hours a day, and some days less. I've been working 4 hours a day for the past 9 months. I see others who put in 12+ per day who get less done.

originally posted by: ketsuko
Of course, you are talking solely about the East and West coast.

If you want to be middle class in those areas, then you are going to need a lot more. Try living a middle class lifestyle in other areas of the country and those amounts you talk about are considered upper middle to wealthy.

Also, what is the definition of "decent"? That can vary from person to person too.

That's why I included that sheet for people to fill out and compare. I filled it out for my area and situation, and I barely made middle class in one of the cheapest areas to live in the US and that was without kids.