3778

I don’t think so. My numbers were from 2018, but the change would not be that significant.

Bear in mind the 200k that Juan is citing is a HOUSEHOLD income, that’s why it’s higher.

Source on individual income:

|2018 Annual Wages|
|Group|Wages|
|Top 0.1% of Earners|$2,808,104|
|Top 1% of Earners|$737,697|
|Top 5% of Earners|$309,348|
|Top 10% of Earners|$158,002|

150k is a very comfortable living, but I’d still consider that upper middle class.

3779

Lol, are you me?

Not that I’ve been particularly comfortable until just now, heh. I’m currently working through some amount of identity confusion because we’re finally well and truly past being hand-to-mouth working-class despite our “professional” careers (thanks, 15 years of frugal debt-retirement!). I dunno, it’s weird.

3780

Sure, but keep in mind that the article we are talking about put all of those people up there, except for the 0.1%, in the upper middle class.

3781

Household income is what matters, particularly given that housing is the biggest single expense for most households, and households pool income to pay for it.

3782

That’s good. Just be aware most economists don’t. That’s 3 times the national median individual income, so if you want to use individual income (although you really shouldn’t), you are 50% over the usual threshold, way out of the grey zone. It’s a matter of strict definitions versus subjective bias.

Also, there’s a reason why people normally use household income. It’s a better metric.

3783

Sure, though this is obviously subjective. But then “upper middle class” is probably always subjective. We need better definitions. Even “twice median income” doesn’t capture the nitty-gritty of what income means. Income enables things. I’d say something like:

Poor - Can’t afford basic expenses without sacrifice and/or subsidies.
Lower middle class - not enough income to accrue savings. Lives paycheck-to-paycheck.
Middle class - Can build a nest egg. Has enough to cover unexpected expenses. Still frugal.
Upper middle class - Doesn’t really have to budget. Has substantial savings. Can afford luxuries like international vacations and expensive cars.
Rich - Doesn’t have to work. Can live off of wealth alone (even if they choose not to or are too profligate to.)

3784

Why are we ignoring the working upper class. Historically a large percentage of the upper class has had to work (mostly managing businesses and landholdings, but still working) to manage an income that kept them being upper class. Historically the middle class were the bank clerks, not the branch directors.

Your definition of upper middle class is literally the traditional definition of the upper class (not having to really budget for day to day and long term basic needs).

The idea that the upper class doesn’t work is a weird, and very American, I think, subversión of class identity. It’s redefining an economic class in a way that camouflages inequality so everybody can feel more “comfortable”.

3785

That’s fine with me. Those were just off-the-cuff definitions. I just think definitions like that capture the reality better than something like “twice median income.” You’d also have to calibrate those definitions for standard-of-living. A person living paycheck-to-paycheck in a low-income studio apartment is in a different situation than someone living paycheck-to-paycheck in a beachside mansion.

3786

It’s because we recently crossed the Rubicon in the US where income from capital and investments has surpassed income from labor as a share of the national income. E.g. there is more money to be made from owning stock, investments, or capital assets than there is from working.

So yes, literally there no way to reach the top and stay there if your income is earned through labor, unless you are a movie star or athlete (even then long term you need to transition to asset income to maintain that post prime career).

3787

Well by Juan’s definition of upper class: not having to really budget for day to day and long term basic needs, I’m upper class, and I make almost all of my income through labor, not investment. And that’s fine. I’m rich by any definition I would have given growing up, even though I make less than Timex’s $150k.

3788

The cutoff point is always going to be blurry, but twice the median makes economic sense.

A well adjusted society (jury is still out whether the US is one) is going to have an economy adjusted so that median income is livable without big wants, but without real saving opportunity. In such an equilibrium, earning twice that base income will start to put households into the position were additional expenses start to become luxuries.

3789

Exactly. Upper class is not necessarily incredibly wealthy. It’s not worrying about budgeting as long as you can keep your income. And of course there are levels within it.

3790

Like I said, rentier bullshit all the way down ;)

Seriously though rent (the economic concept) is the root of so much evil, and our society doesn’t just not punish or recapture rent income, it actively rewards and incentivizes rent income over labor income.

“Schwick schwack,” says the whetstone.

3791

Ok, so we’re using Pew’s definition of middle class, as being twice the median household income?

And it’s fine to use the household income.

Although along those lines, then we’re talking about what for upper class? 140k household income puts you in the upper class?

3792

Yes, think of it the other way. If half the households in the country earn less than $70k, doesn’t earning twice that put you in a stress free eco financial situation as long as you don’t want to enjoy luxuries outside the price range of those median households?

Not being able to afford luxuries does not mean a household is middle class. It just means you can’t easily afford luxuries. Historically a preoccupation of the lower upper class.

3793

I don’t think so?

I mean, even without those extra luxuries, given the generally high stress levels felt by the median, even earning twice that does not necessarily mean your stress levels have been reduced to zero.

Your stress would be lower, but you wouldn’t be pulling in so much money as to guarantee financial security moving forward. Especially given that you’d be paying a decent amount of money in taxes, so your take-home pay isn’t going to be twice that of the median income.

3794

If you want to argue that the US economy has destabilized and the median income does not represent a living point of equilibrium, that’s I think a worthy argument. But there are solid economic theory reasons for the 2x median cutoff.

But if $150-160k is still squarely middle class, then surely $45k per household is squarely not (under the standard definition that’s about the threshold) so the economy now resembles more a developing country’s than a fully developed one.

Again, surely within the realm of possibility, but that’s the implication. That class in the US is utterly broken and close to 50% or even more are under working class conditions. Back to the 19th century.

But given that NYC’s median household income is $63k, it’s as well as likely that lower upper class folks and folks close to those income levels have lost perspective of how a middle class lifestyle truly feels and the difference between economic stress on basic needs and economic stress on optional needs.

3795

I think this is definitely likely, even for myself, who often says exactly that.

It is perhaps hard to fully appreciate what it’s like for folks outside our own economic bubble. Like, for instance, I make good money, but I also tend to not spend much money… I save it, assuming that at some indeterminant point in the future I will need it. I’m also the kind of person who never uses potions in a game, and has my inventory full of them at the end.

So at some level, I tend to live a lifestyle that is similar to those around me… while I likely make more money than other folks in my neighborhood, I live side by side with them, in a lifestyle that is similar.

But it’s true that I could buy a bunch more stuff if I wanted, so that is a choice that I’m making, and it’s foolish of me to ignore that fact.

3796

Yeah, I feel many here (myself included) fall in that category. Somewhat upper class income but lifestyles and values more aligned to a middle class they belonged to in a not too distant past. But class is not about your lifestyle, necessarily, but about your options.

I’ve met a couple crazily wealthy people that live pretty “middle class” or “lower upper class” lifestyles (good apartment, but nothing crazy, goes to good restaurants here and there, but otherwise no extravagant expenses). But they have millions and their lifestyle is a personal choice.

For the middle and lower class there’s no real choice, their economies are truly stressed.

But as you say it’s easy to lose perspective.

3797

I think this is fair, and not something I had really thought about in that way before.