Middle-Class...what does it mean to you?

[BrianFromWA]

In keeping with my need to attempt to define the argument before arguing the argument, I pose this question to you. The term has been bandied about by the candidates, by commercials, by talking heads, by us on this forum...but what does it mean?

For instance, I don't think that if you get government assistance you're "middle-class." I don't think that if you make little enough that you don't pay federal taxes that you're "middle-class." Personally, I don't think that if you own your home outright that you're "middle-class" (or any other multi-6-figure investments).

It's not necessarily salary, for me.
Thoughts?

 

[e_blazer]

I think your government assistance criterion is in need of some work. Most of us who would consider ourselves to be middle-class have taken advantage of some form of government assistance at some point in our lives. Government grants and government-backed student loans, government-backed mortgage programs, GI-Bill education assistance... Owning your own home outright is something that a lot of folks achieve as they get close to retirement. I don't think that they would consider themselves to be out of the middle-class simply because they've lived long enough to finally pay off the mortgage. A whole bunch of very rich people pay little to no income tax and little in the way of capital gains because they simply borrow against assets rather than taking ordinary income or selling their property.

Personally, I'd say that if you've got enough income that you can put away a few dollars more than you spend, but not enough that you don't have to work to keep the wolf away from your door you're in the middle-class. You can afford to buy the necessities of life, but you have to plan for and think about big ticket and luxury items. You can plan for your retirement, but it's not likely to be in your forties or earlier. You aren't likely to accumulate sufficient assets that the "death tax" is a serious concern.

 

[DaLincolnJones]

Per capita money income in past 12 months (2010 dollars) 2006-2010 $26,171 $27,334

figure is for the state of Oregon

18540 per year is the mark to qualify for food stamps in Oregon

 

[EL PRESIDENTE]

Its different from where you live. In Alabama $100k is rich, in LA $100k is middle class.

To me, its basically means that after basic expenses, can you invest a little and save a little while at the same time having some disposible income.

 

[Eastoff]

Family income in Oregon of 40k to 150k. Individual income of 30k to 75k

 

[Eastoff]

To me, its basically means that after basic expenses, can you invest a little and save a little while at the same time having some disposible income.

I think this sounds about right. Might add in, you are making payments on a home.

 

[DaLincolnJones]

http://quickfacts.census.gov/qfd/states/41000.html
spin away

 

[EL PRESIDENTE]

those are "basic expenses".

 

[DaLincolnJones]

http://www.bls.gov/news.release/empsit.t15.htm

http://wwwwakeupamericans-spree.blogspot.com/2012/08/unemployment-rises-to-83-u6-real.html

state by state U3 to U6

 

[DaLincolnJones]

Huff Post on "middle class"

http://www.huffingtonpost.com/2012/09/01/middle-class-america-charts_n_1847211.html

NY Times on "middle class" the best one I have read in a long time

http://economix.blogs.nytimes.com/2012/09/14/defining-middle-class/

 

[maxiep]

Everyone but Mitt Romney.

 

[MARIS61]

In keeping with my need to attempt to define the argument before arguing the argument, I pose this question to you. The term has been bandied about by the candidates, by commercials, by talking heads, by us on this forum...but what does it mean?

For instance, I don't think that if you get government assistance you're "middle-class." I don't think that if you make little enough that you don't pay federal taxes that you're "middle-class." Personally, I don't think that if you own your home outright that you're "middle-class" (or any other multi-6-figure investments).

It's not necessarily salary, for me.
Thoughts?

So by your definition practically no small business owner in America is middle-class? Nearly all get government assistance at least early on.

Also, whether you pay taxes or not has little correlation to income. Tons of affluent people pay no taxes. In fact, dodging taxes through loopholes is how most build such wealth.

Not sure what you mean about owning your own home. You consider these people to be affluent? And how do you compare a 70 year old couple to a 20 year old who both own their homes? In the 50's, over half of all Americans owned their homes outright, now it's about 32%. And by "home" do you mean a 40 year-old single wide trailer in a park or a 50,000 sf mega mansion on a private island?

To me, middle-class is a measure of what the majority of Americans are paid for their labors. How they invest it or waste it or are cheated out of it is too individualized to make comparisons.

 

[Denny Crane]

http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Quintiles

Bottom 20% is our poor. Next 20% makes $18.5K to $34.7K and is lower middle class. Middle 20% makes $34.8K to $55.3K, and that would be middle class. Next 20% makes $55.3K to $88K, which would be upper middle class. Top 20% makes $88K or more, probably still upper middle class. Top 5% makes $157K or more, and is pushing being "rich" I suppose.

I think it ultimately matters where you live. $18.5K in Hawaii is not such a bad living. $100K in Silicon Valley and you might afford a mortgage on a shack.

 

[e_blazer]

http://en.wikipedia.org/wiki/Household_income_in_the_United_States#Quintiles

Bottom 20% is our poor. Next 20% makes $18.5K to $34.7K and is lower middle class. Middle 20% makes $34.8K to $55.3K, and that would be middle class. Next 20% makes $55.3K to $88K, which would be upper middle class. Top 20% makes $88K or more, probably still upper middle class. Top 5% makes $157K or more, and is pushing being "rich" I suppose.

I think it ultimately matters where you live. $18.5K in Hawaii is not such a bad living. $100K in Silicon Valley and you might afford a mortgage on a shack.

I think you may want to check real estate prices and cost of living data for Oahu and Maui, but otherwise...yeah.

 

[THE HCP]

I'm not ashamed to say that I make good money....... that said, I have a wife, 2 kids, 2 dogs, 2 car payments, have to pay for my family's healthcare and a mortgage on a house in one of the more desirable neighborhoods in town. I will admit, it is a struggle, but we have chosen the lifestyle we live. We joke around about moving out into the suburbs and getting 3X the house. I think it really depends on location and lifestyle.

15 years ago I made 1/10th what I make now and actually had more money in the bank. Weird how shit works.

 

[Denny Crane]

I think you may want to check real estate prices and cost of living data for Oahu and Maui, but otherwise...yeah.

There are plenty of habitat for humanity type homes on Maui - entire subdivisions. And once you get out of Honolulu, it's amazing how great a property you can get for about the same price as entry-level in Silicon Valley - beach front single family homes.

And condos?
http://www.adrhi.com/search/results...s&type=con&type=lnd&type=mul&sort_lowest=true

Looks like maybe 1/3rd the price of comparable Seattle property to me.

 

[BrianFromWA]

So by your definition practically no small business owner in America is middle-class? Nearly all get government assistance at least early on.

I'm a partner in a small business. What government assisatance are you talking about? Food stamps? TANF? WIC? Refund checks?

Also, whether you pay taxes or not has little correlation to income. Tons of affluent people pay no taxes. In fact, dodging taxes through loopholes is how most build such wealth.

Completely disagree. If you pay no taxes because you make <$50k, then you're not "Middle class". If you pay no taxes because you get a bunch of investment income that you factor against lots of depreciating assets, then you're not "middle class".

Not sure what you mean about owning your own home. You consider these people to be affluent? And how do you compare a 70 year old couple to a 20 year old who both own their homes? In the 50's, over half of all Americans owned their homes outright, now it's about 32%. And by "home" do you mean a 40 year-old single wide trailer in a park or a 50,000 sf mega mansion on a private island?

Yes, I think that if you have no mortgage or rent expense (and a single-wide home or a downtown condo paid off) then you're not "middle-class". And age doesn't matter. If you're 75y/o and have a paid-off home vs. an 18 y/o with a paid-off home, then you have little rent/mortgage (I understand insurance and taxes) expense and a 6-figure asset. I don't think that most Americans are worth 6 figures. And your stat of 32% home ownership outright (which I'm borrowing just b/c I don't know) means that it's not something that a majority of people have.

To me, middle-class is a measure of what the majority of Americans are paid for their labors. How they invest it or waste it or are cheated out of it is too individualized to make comparisons.

How big is the "middle-class?" Is it the 80% of the bell-curve of incomes? middle 50% of incomes? Middle 20% of net worth?

 

[BrianFromWA]

I think your government assistance criterion is in need of some work. Most of us who would consider ourselves to be middle-class have taken advantage of some form of government assistance at some point in our lives. Government grants and government-backed student loans, government-backed mortgage programs, GI-Bill education assistance...

Government grants, maybe. VA loans and GI bill are not assistance, they're conditions of employment.

Owning your own home outright is something that a lot of folks achieve as they get close to retirement. I don't think that they would consider themselves to be out of the middle-class simply because they've lived long enough to finally pay off the mortgage.

If they've lived long enough to 'finally pay off their mortgage' then they've put aside money into a valuable asset and now no longer pay ~30% of their income in rent/mortgage. Having an extra 30% of whatever income you have seems to be something that most Americans don't have.

A whole bunch of very rich people pay little to no income tax and little in the way of capital gains because they simply borrow against assets rather than taking ordinary income or selling their property.

So they're not middle-class, are they?

Personally, I'd say that if you've got enough income that you can put away a few dollars more than you spend, but not enough that you don't have to work to keep the wolf away from your door you're in the middle-class. You can afford to buy the necessities of life, but you have to plan for and think about big ticket and luxury items. You can plan for your retirement, but it's not likely to be in your forties or earlier. You aren't likely to accumulate sufficient assets that the "death tax" is a serious concern.

Fair enough.

 

[Denny Crane]

Public grade school and a hot lunch every day.

 

[tlongII]

I'm not ashamed to say that I make good money....... that said, I have a wife, 2 kids, 2 dogs, 2 car payments, have to pay for my family's healthcare and a mortgage on a house in one of the more desirable neighborhoods in town. I will admit, it is a struggle, but we have chosen the lifestyle we live. We joke around about moving out into the suburbs and getting 3X the house. I think it really depends on location and lifestyle.

15 years ago I made 1/10th what I make now and actually had more money in the bank. Weird how shit works.

Wait a minute... I thought you lived in NE Portland?

 

[maxiep]

I don't really care about economic classes. If someone makes more or less than I do, it's really no business of mine. People are people. I want every American to know they will have the basics--food, clothing, shelter--provided for them if they cannot provide for it themselves. Perhaps it's by the government, perhaps it's by their local community organizations. Every American should also have access to a quality education and quality health care if they get sick. If it means they have to sacrifice in other areas to get it, I don't have a problem with it. Neither should be "free". After that, we should be free to pursue our own goals without hinderance from the government.

 

[THE HCP]

Wait a minute... I thought you lived in NE Portland?

That's right. Alameda.