Understanding where you fall in the American economic class system isn't as simple as pulling out a calculator or looking at a pay stub.
Myriad forces shape individuals' economic class and their views on where they rank alongside other Americans.
When asked how they identify their social class, 62% of Americans said they belonged to the upper-middle or middle classes, according to a 2017 survey from Gallup. In determining their social class, people often don't just think about income, experts say, but about other factors, including education, location and family history.
Larger economic trends may also impact how people view their class rank.
On one hand, experts note, the American middle class is shrinking, with individuals moving toward the higher- and lower-income brackets. "There's a loss of jobs in the middle and growth at the top and bottom," says Robert J. Gordon, professor of economics at Northwestern University. "In that sense, the middle class has been hollowed out."
Much of today's political rhetoric focuses on the challenges facing the middle class. And although household incomes have risen over the past 45 years or so, they've actually fallen since 2000 and haven't fully recovered from the Great Recession, says Richard Fry, senior researcher for Pew Research. "As of 2015, most American households had not recovered to where they were back in 1998," he says. That short-term decline may lead to feelings of stagnation and frustration, he says. Plus, Fry notes, while most American households are doing better than they were 45 years ago, "the gains have not been equal," he says. "Everybody’s better off, but it’s particularly the well-off who are better off."
On the other hand, experts say today's economy is strong. The unemployment rate was 3.5% in September 2019, and employers are hiring. "Household incomes are supported now in a way they weren't before, both by (the) decline of unemployment and people coming back into employment," Gordon says.
So what does this mean in terms of where you fall in the American economic class system? Here's what to know.
Breaking down economic class by income
One objective way some researchers divide individuals into economic classes is by looking at their income. From that data, they split earners into different classes and often into five groups: poor, lower-middle class, middle class, upper-middle class and wealthy. The income cutoffs that divide those income ranges can change from year to year and between methodologies, but here's a sense of where they stand, according to recent data.
What is a middle-class income?
Pew Research defines middle-income Americans as those whose annual household income is two-thirds to double the national median. For a family of three, that ranges from $42,000 to $126,000 in 2014 dollars.
The lowest-income group earned $31,000 or less for a family of three while the lower-middle group earned between $31,000 and $42,000 in 2014, according to Pew Research. At the most affluent levels, upper-middle-income, three-person households earned between $126,000 and $188,000, with the highest-income households topping $188,000 in 2014 earnings.
If those numbers have your head spinning, here's a breakdown of income and class for a family of three, based on Pew Research's data:
Pew has developed a calculator to determine income class, into which you can plug relevant financial, geographic and household information for a take on where you rank.
According to research from Stephen Rose, a nonresident fellow in the Income and Benefits Policy Center at the Urban Institute, the range for a middle-class family of three was an income of $50,000 to $100,000 in 2014, he says. That same three-person family with an income between $0 and $30,000 per year was considered poor or near-poor. A family earning between $30,000 and $50,000 was considered lower-middle class.
For high earners, a three-person family needed an income between $100,000 and $350,000 to be considered upper-middle class, Rose says. Those who earn more than $350,000 are rich. "In my mind, there's a big divide today between the upper-middle class and the middle class," he says.
Here's a breakdown on income class for 2014 incomes for a family a three, according to Rose's analysis:
Am I middle class?
Whether you're considered middle class depends on more than just your income or the balance of your bank account. Where you fall in the American economic class system may not stay consistent throughout your life, or even from year to year, experts say.
"Many people are holding onto their middle-class status precariously," Gordon says. For example, he says, a middle-class breadwinner who's lost a solid job in manufacturing may fall from the middle-income class to the low-income class. At the same time, his family may continue to own several cars, a boat on a nearby lake – all the trappings of middle-class life – while bringing home the paycheck of a low-income or poor family.
On the flip side, a law student may earn a modest graduate student stipend of $20,000 per year, currently placing her in the low-income class, but her educational attainment and future earnings will most likely catapult her income and class placement to a higher level down the road. "People really need to understand that whatever's happening (with their class rank) today is part of a trajectory, part of their life," Rose says.
Other factors helping define the middle class
Class identity extends beyond what your W-2 income form claims you earn, experts say.
A factor that individuals may use to determine class is educational attainment, with people who have postsecondary degrees linking their class placement to those degrees. "There's a big class divide based on education and also on marriage," Gordon says. "What you have is an upper class based on couples where the husband and wife went to college and can provide intangible benefits to their children such as a better vocabulary."
Your location also has a major impact on how you feel you stack up class-wise. "Making $120,000 per year is a lot different in small-town Indiana than it is in New York City," says Frank Newport, senior scientist at Gallup.
So where do you place in the American economic class system? You can look at income, education, marital status, location, family history, gut instinct and a host of other factors to find out where you fall. But the bottom line is this: Finding the answer is more complex than just looking at a number.
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