Middle Class

Middle Class

The middle class is a the group of people who fall into the middle income range in a country.

  • About 50% of american are considered middle class in 1998
    • Falling from roughly 61% in 1971 (according to the Pew Research Center)

There are multiple definitions for the "middle class"
  • Mathematically this refers to the group of people who are in the middle % range of income
    • This might be the middle 20% (middle quintile) of incomes
    • Could also be broader (middle 40%)
    • Even though these people fall in the middle mathematically, they may not feel like they are in the middle class (see below)
  • Anecdotally the middle class refers to those who are not rich and not poor, but secure and comfortable
    • The middle class does not live lavishly, but does not generally worry about basic finances
    • Owns a home, cars, can take a few vacations a year, etc.
    • Good job security, schools for kids, retirement savings, healthcare, etc.
    • Overall few financial-related worries
    • This definition of middle class is related to The American Dream
    • Optimistic about their future
    • Assume that their kids will have a better future than they did

2018 Concerns
  • There has been a growing sentiment that the US middle class is shrinking
    • Jobs are less secure (automation, technology)
    • Savings are lower
    • Cost of living have increased
    • Cost of healthcare have increased
    • Costs of education have increased
    • Debt levels have increased
    • Real wages have stagnated
  • Although average incomes seem to be increasing, the Tyranny of Averages suggests this data might be misleading (the typical person is actually not better off - averages are being skewed by the super wealthy