middle class income?

[rflorek]

I'm sure the OP would be stunned to hear that the non-forclosed, just "for sale" house behind me - three bedrooms, two baths, decent sized lot - is for sale for $80k.

WOW! In my area, a house like that goes for high $200ks at a minimum - and those usually need work and don't have a large lot.

 

[angierae]

WOW! In my area, a house like that goes for high $200ks at a minimum - and those usually need work and don't have a large lot.

A lot of that is the economy - we bought our house in 2007 for $180k, houses in our neighborhood are now going for half that. Makes me wish we hadn't bought when we did, but you roll the dice when you buy real estate.

 

[SandrA9810]

I can't answer for everyone, but I'm guessing in many cases it has to do with cost of living.

Our income is almost 2X the median for our city and at least 2.5X the median for the state, but we can't even afford a decent SFR in our area, at least not using any traditionally accepted, sound, financial metric.

Why? We moved to a location that experienced a huge house price bubble, not to mention the effects of prop 13, which protects a specific demographic, but punishes any and all future home owners. I know, I know, blasphemy in the state of California, but it's true.

I recently pulled sales numbers and tax records on 2 identical tract houses in our neighborhood (where we rent because we can't afford to buy)

House 1
Sold for $320,000 in 1998
Yearly property tax $7,634

House 2
Sold for $1,040,500 in 2008
Yearly property tax $15,322

Prices are down from that 2008 number now, but not much. So how does that even make sense? A neighborhood that was originally targeted to, and affordable for, middle income households now requires an income solidly in the top 5th percentile, if not higher, for the numbers to make sense.

Yet every politician out there is pandering to the masses about putting a floor under housing prices. Umm, why? More money would be pumped into the economy if housing was actually affordable given actual incomes.

Anyway, very long post just to say that while I think every chart quoted in this thread puts us solidly upper middle if not higher, we certainly don't feel like it, and we wouldn't classify ourselves as such... especially since we're just renters.

California is crazy with the cost of living. And it varies even more than Florida. San Fran/San Jose/LA, those are places you can't make less than like $25-$30 an hour, just to have a tiny little roof.

Yet there's so many major retailers out there giving the same wages across the board. So what if you can live comfortably in a small po-dunk town on $8 an hour, the majority of cities across the US don't allow for an income that low. Those are the same people having to collect food stamps to put food on the table just because all their income goes to paying rent and gas.

Disney is another joke and a half. They say they pay comparable wages, but to what? They're the largest employer in Orlando, other companies are going to look to them to see what they're paying. So when Disney pays low, so do all the other companies in Orlando (not just the tourist industry either).

 

[Waybuloo]

Wow, that's a lot. Our debt load is 2X income and that's pretty much the house. I would be very uncomfortable with anything over 3X.

Oh yeah ours is all house - house prices in Australia are pretty horrible. Seeing all the posts with houses under $200k makes me sigh; that was what my parent's bought their tiny weatherboard house 20 years ago for.

 

[lisaross]

Oh my good friend lives in Australia in Brisbane - is that anywhere near u?

Oh yeah ours is all house - house prices in Australia are pretty horrible. Seeing all the posts with houses under $200k makes me sigh; that was what my parent's bought their tiny weatherboard house 20 years ago for.

 

[crisi]

One article I read implied that most Americans consider themselves "middle class" these days, ranging from high school graduates to working professionals with post graduate degrees......and everything in between.

I understand your point, but I still think it is a common phrase to say, "middle class" when referring to your economic status.

Now, if you are referring to people "with class" as defined by social graces, well, that is a whole different topic!

Dawn

The issue there however is that many people do not use the word "upper class" "rich" or "wealthy" independent of social class.

My husband and I are "well off" - we make far more than the median income. But we don't have many of the trappings or culture of the upper class. We went to public schools, as do our kids. My degree is from a State University - he was a scholarship kid at a private liberal arts school. We live in a modest middle class home. We don't have a second home at the lake, in the mountains or at the beach. We both hold professional jobs (in fact, there is a class grouping just for people like us - the "professional middle class.") We don't sit on charity boards. We have a rather ordinary middle class life, with less budget stretching and more vacations (and not as many vacations as some people on this board).

A friend of mine has a household income far below the median. And he is upper class. The product of private schools through grad school (surprise, my husband met him at that small liberal arts school). Family owns a set of "summer homes." Sits on charity boards. Has a trust fund. Can reach a U.S. Senator with one phone call. Vacations at private villas owned by family or friends in Italy, Greece, Thailand and Mexico (he's shared with us - its great. But it quickly convinces you that there is a LOT of money out there - these places are well beyond my reach).

 

[Colleen27]

Yet every politician out there is pandering to the masses about putting a floor under housing prices. Umm, why? More money would be pumped into the economy if housing was actually affordable given actual incomes.

That's the problem with any action taken at the federal level, though - it is never going to fit each and every set of local conditions. I totally understand the rush to put a floor under housing prices, because in my area abandoned properties were becoming a huge problem in many communities.

The house we live in was a foreclosure that sat on the market for over a year with an asking price that started at 35K and dropped to 25K before we made our offer. We got this place for 25K but with 13% of the sales price in incentives from the seller (3% towards closing costs and 10% in a repair escrow because we couldn't get approval to turn on the water for a complete inspection). So the bank recouped 21K (before listing agent fees) on a house that was foreclosed on over a 150K mortgage.

Many banks chose simply to hold onto homes until prices rebound, creating issues of blight and vacancy for communities rather than take the massive loss of selling under those conditions, and while letting prices fall a while longer would certainly be good for over-inflated markets like yours it would potentially be disastrous for communities like mine.

 

[bettymae1121]

Because cost of living varies so widely (and wildly) in this country, I've always thought of the different classes are defined by what one can afford in life. By "afford" I mean at most taking on modest amounts of debt relative to their income for the traditional things like student loans, car loans, and mortgages. I'm also not talking about people that are sustatining a higher standard of living by putting high dollar amounts on credit cards for things that are purely wants. I'm talking about people that for the most part, live within whatever means they have.

Lower Class/Working Class/Working Poor can only afford their basic needs and none of their wants. At best they can afford the occasional treat. At worst they can't always make ends meet every month. Most cannot afford to own their home unless they live in an extreme low cost of living area or inherited their home from a parent/grandparent (and only need to cover the taxes). Generally they cannot put anything in savings and live paycheck-to-paycheck. They cannot fund retirement/college savings. However they usually make too much to be on much, if any, government assistance.

Middle Class can afford all of their needs and at least some of their wants. Depending on the cost of living in their area, they may be able to own their own home, however renting due to either personal preference or high cost of living (like say living in NYC) doesn't preclude someone from being middle class. They are able to put money away into savings and usually can fund a retirement account and maybe even a college fund for their kids.

Upper middle class can afford all of their needs and most or all of their wants. They absolutely can put money into savings and investments. Even in a high COL area, they can probably afford to own their own home. However they still need to work for an income, they are not independantly wealthy.

The wealthy...well they can do whatever they dang well please and don't need to work, though of course they may choose to.

 

[crisi]

Good summary, bettymae

Lower Class/Working Class/Working Poor can only afford their basic needs and none of their wants. At best they can afford the occasional treat. At worst they can't always make ends meet every month. Most cannot afford to own their home unless they live in an extreme low cost of living area or inherited their home from a parent/grandparent (and only need to cover the taxes). Generally they cannot put anything in savings and live paycheck-to-paycheck. They cannot fund retirement/college savings. However they usually make too much to be on much, if any, government assistance.

We tend to give these people help in terms of tax credits - they are the people that are being attacked when we say "50% of Americans don't pay taxes!!!" Often, they'll end up getting credits in excess of what they put into the system. (This isn't a complaint from me, just that they tend to get government assistance, but its from a different direction than someone getting foodstamps, housing assistance, or a check. After all, as you said, they are usually only covering their needs as it is).

 

[bettymae1121]

Good summary, bettymae



We tend to give these people help in terms of tax credits - they are the people that are being attacked when we say "50% of Americans don't pay taxes!!!" Often, they'll end up getting credits in excess of what they put into the system. (This isn't a complaint from me, just that they tend to get government assistance, but its from a different direction than someone getting foodstamps, housing assistance, or a check. After all, as you said, they are usually only covering their needs as it is).

True, I didn't consider EIC. I supose it could be considered government assistance, it just through the tax code rather than a state welfare benifit.

 

[trip]

It is almost impossible to define middle class. Too many apples and oranges.

Not only does it depend on cost of living for an area but life style choices. Two income/ single income family. Family size. New cars every 3 or so years/ keeping cars til they die. Expensive vacations/more modest ones or none other that visiting and staying with relatives. Public school/private schools. Using credit cards to keep up with the Joneses/ trying to be debt free. Labled clothing/ less expensive options. Designer purses/plain janes. These are just some of choices we all make. Everyones needs vs. wants are so different.

 

[cats mom]

That's the problem with any action taken at the federal level, though - it is never going to fit each and every set of local conditions. I totally understand the rush to put a floor under housing prices, because in my area abandoned properties were becoming a huge problem in many communities.

The house we live in was a foreclosure that sat on the market for over a year with an asking price that started at 35K and dropped to 25K before we made our offer. We got this place for 25K but with 13% of the sales price in incentives from the seller (3% towards closing costs and 10% in a repair escrow because we couldn't get approval to turn on the water for a complete inspection). So the bank recouped 21K (before listing agent fees) on a house that was foreclosed on over a 150K mortgage.

Many banks chose simply to hold onto homes until prices rebound, creating issues of blight and vacancy for communities rather than take the massive loss of selling under those conditions, and while letting prices fall a while longer would certainly be good for over-inflated markets like yours it would potentially be disastrous for communities like mine.

Lenders are definitely playing the amend, extend, pretend game with delinquent homeowners here and the desirable properties they have taken possession of are being metered out very slowly so as not to crush prices.

I'm sure they're choosing that plan of action (or non action would be a better description) because their losses would be staggering if they didn't resort to creative accounting practices (largely due to how crazy high numbers were here in the first place) So far it seems to be working relatively well for them.

It's interesting how the process has played out so differently depending on location though.

I saw some detailed numbers from Las Vegas the other day and I was shocked at how quickly houses are being foreclosed on, how quickly lenders are dumping those properties back on the market, and how low prices have gone as a result. But if my source was correct, investors are starting to scoop up the deals there, in a big way as a matter of fact. That's exactly what would be expected if a market correction is allowed to take place without government intervention.

But I do understand that housing prices have fallen far below the norm in select areas and how damaging that has been to some people.

And so I don't stray too far OT... I think this all goes back to my original point that cost of living numbers should be in line with income numbers for an area. Double digit year over year increases, whether in the cost of housing (saw it consistently from approx 2000-2007 here) or goods, or services, etc. only work if wages are also increasing at that rate or better. Can anyone point me to any place where that has been happening?

Consistent price increases coupled with consistent wage decreases certainly doesn't bode well for future generations and their class level expectations. But I guess that's a whole other topic.

 

[Crystal0608]

The NY Times quiz ranked me at 48% average. I'd say we are on the lower end of middle class. My city average household income is $36044 and State is $43674 and I make in-between those.

I work in a salaried professional job and dh has stayed home with the kids for 8 years, which puts us in the lower income bracket for a family of four. By dh staying home, I don't have to pay for daycare and we do get EIC which kinda balances out.

I bought a new house last year, 3 br, 3 ba, 2 car garage with a 4% subsidized interest rate in a nice rural subdivision with a 1 acre lot. I own two cars, a Neon & a Camry, one paid for I bought new as a teenager and still ticking, one will be paid off in 10 months, then Disney time . I do have credit card debt, most of which will be paid off at tax refund time as usual. My kids go to public school, one is in band and both dance and play seasonal sports. We have gone on vacation to the beach in April for a long weekend, to Carowinds once this summer, and we had season passes to a water park this summer. I don't have 401K, a substantial savings, or college funds. My hobbies are couponing and yard saling, which helps me keep the fridge & pantry stocked and the kids dressed nicely just on my income.

 

[A Mickeyfan]

Because cost of living varies so widely (and wildly) in this country, I've always thought of the different classes are defined by what one can afford in life. By "afford" I mean at most taking on modest amounts of debt relative to their income for the traditional things like student loans, car loans, and mortgages. I'm also not talking about people that are sustatining a higher standard of living by putting high dollar amounts on credit cards for things that are purely wants. I'm talking about people that for the most part, live within whatever means they have.

Lower Class/Working Class/Working Poor can only afford their basic needs and none of their wants. At best they can afford the occasional treat. At worst they can't always make ends meet every month. Most cannot afford to own their home unless they live in an extreme low cost of living area or inherited their home from a parent/grandparent (and only need to cover the taxes). Generally they cannot put anything in savings and live paycheck-to-paycheck. They cannot fund retirement/college savings. However they usually make too much to be on much, if any, government assistance.

Middle Class can afford all of their needs and at least some of their wants. Depending on the cost of living in their area, they may be able to own their own home, however renting due to either personal preference or high cost of living (like say living in NYC) doesn't preclude someone from being middle class. They are able to put money away into savings and usually can fund a retirement account and maybe even a college fund for their kids.

Upper middle class can afford all of their needs and most or all of their wants. They absolutely can put money into savings and investments. Even in a high COL area, they can probably afford to own their own home. However they still need to work for an income, they are not independantly wealthy.

The wealthy...well they can do whatever they dang well please and don't need to work, though of course they may choose to.

Why do you only classify the working class with the low and poor.. do the middle income (class) and upper income (class) not have to work? They too are part of the working class.. the only that are not are the wealthy.. they do not necessarily "have to" work... but do most of the time.

 

[mrodgers]

Why do you only classify the working class with the low and poor.. do the middle income (class) and upper income (class) not have to work? They too are part of the working class.. the only that are not are the wealthy.. they do not necessarily "have to" work... but do most of the time.

Because according to wikipedia, the working class is indeed the lower class. Work meaning labor. The middle class jobs are not typically out there shoveling the slag from the floor. They look at the slag, then look around to order someone else to shovel it up.

Working class (or lower class, labouring class) is a term used in the social sciences and in ordinary conversation to describe those employed in lower tier jobs (as measured by skill, education and lower incomes), often extending to those in unemployment or otherwise possessing below-average incomes.

 

[DawnM]

I am not arguing any of that.

I was just saying that, according to actual dictionary definitions, "class" is an appropriate term.

Dawn

The issue there however is that many people do not use the word "upper class" "rich" or "wealthy" independent of social class.

My husband and I are "well off" - we make far more than the median income. But we don't have many of the trappings or culture of the upper class. We went to public schools, as do our kids. My degree is from a State University - he was a scholarship kid at a private liberal arts school. We live in a modest middle class home. We don't have a second home at the lake, in the mountains or at the beach. We both hold professional jobs (in fact, there is a class grouping just for people like us - the "professional middle class.") We don't sit on charity boards. We have a rather ordinary middle class life, with less budget stretching and more vacations (and not as many vacations as some people on this board).

A friend of mine has a household income far below the median. And he is upper class. The product of private schools through grad school (surprise, my husband met him at that small liberal arts school). Family owns a set of "summer homes." Sits on charity boards. Has a trust fund. Can reach a U.S. Senator with one phone call. Vacations at private villas owned by family or friends in Italy, Greece, Thailand and Mexico (he's shared with us - its great. But it quickly convinces you that there is a LOT of money out there - these places are well beyond my reach).

 

[marie1203]

As many said there is no way to pin point to a middle class base on income alone. There are many variables to it. I think we are middle class. DH works and I am a full time student. The only debt we have is our mortgage and 1 car (very low interest in both under 3%). We have 2 cars and a boat. We do not qualify for fafsa. We have retirement plans and savings accounts. We do not have kids but have 7 furry ones that get anything they need. We are able to put 1/4 of DH salary in savings after everything every month. We are able to take at least 2 vacations a year but we do budget and prepare for things like that.

I grew up in the upper middle class and went to private school. Every holiday (even 3 day weekends) we went somewhere and got out of the country once a year. My family own beach apartment and 2 other vacations homes.

I would say middle class is able to afford all their needs and some of their wants. Working class/lower class pay check to pay check and no wants just afford their needs. Upper middle class can afford all their wants and needs but still have to work to keep it going. If you don't have to work and have enough to live then you are rich.

 

[DawnM]

How do you have a mortgage interest rate under 3%?

Dawn

As many said there is no way to pin point to a middle class base on income alone. There are many variables to it. I think we are middle class. DH works and I am a full time student. The only debt we have is our mortgage and 1 car (very low interest in both under 3%). We have 2 cars and a boat. We do not qualify for fafsa. We have retirement plans and savings accounts. We do not have kids but have 7 furry ones that get anything they need. We are able to put 1/4 of DH salary in savings after everything every month. We are able to take at least 2 vacations a year but we do budget and prepare for things like that.

I grew up in the upper middle class and went to private school. Every holiday (even 3 day weekends) we went somewhere and got out of the country once a year. My family own beach apartment and 2 other vacations homes.

I would say middle class is able to afford all their needs and some of their wants. Working class/lower class pay check to pay check and no wants just afford their needs. Upper middle class can afford all their wants and needs but still have to work to keep it going. If you don't have to work and have enough to live then you are rich.

 

[A Mickeyfan]

Because according to wikipedia, the working class is indeed the lower class. Work meaning labor. The middle class jobs are not typically out there shoveling the slag from the floor. They look at the slag, then look around to order someone else to shovel it up.

also from Wikipedia....

http://en.wikipedia.org/wiki/American_working_class#Working_class_majority

Working class majority
Seen from a sociological perspective based on class-cleavages, the majority of Americans can be described as members of the working class.[26


so based on that description, does that mean the majority of Americans are lower class/poor/low income ???

again, comes from the same Wikipedia you got your description from...

 

[disneyofcourse]

This is the way I've always looked at it-

Low- Barely getting buy, living on credit, living on gov't assistance, paycheck to paycheck. Maybe has some substantial debt. No savings

Middle-Low Getting by, living on credit when needed, has some debt or no debt but pinches pennies, pretty much paycheck to paycheck. Clips coupons, finds deals etc to cut costs. Hard to go on vacation due to money issues. Little or no savings

Middle-High/Middle Not living paycheck to paycheck, lower debt compared to income levels, affords yearly vacations without hassle, able to buy a vehicle and pay for it without much trouble. Able to get "wants" without much issue. Has savings. Has to work to keep the money coming

High - Makes comfortable salary, spends money on whatever and whenever, has savings, just a comfortable living situation. Income from investments and working.

I don't really know, you can't really figure it out by how much people make since costs are so different for everything in different parts.



I consider myself middle since I have no debt (Just a mortgage), able to put a lot into savings, can go on vacation often. I don't really budget for things but, I know my limits so I don't go over that. (I guess that IS my budget) Like I wouldn't go out and spend 1k on clothing each month. But I have to keep on working to keep it going.