Back To Career News

Who Are the Shrinking Middle Class?

The PEW Charitable Trusts defines middle class households as "those making between 67 percent and 200 percent of the state's median income." There is a lot riding on that definition, however. If the state's median income is low and the cost of living is high, many families who fit the definition of "middle class" may not have access to things we often associate with being middle class, including education, owning a home, or even just a savings account. The bad news is that, by various measurements, the middle class in every state is shrinking.

The PEW Charitable Trusts defines middle class households as “those making between 67 percent and 200 percent of the state’s median income.” There is a lot riding on that definition, however. If the state’s median income is low and the cost of living is high, many families who fit the definition of “middle class” may not have access to things we often associate with being middle class, including education, owning a home, or even just a savings account. The bad news is that, by various measurements, the middle class in every state is shrinking.

(Photo Credit: krystal.pritchett/Flickr)

Do You Know What You're Worth?

How We Measure the Shrinking Middle Class

PEW Charitable Trusts looked at three measures in each state: 

1. What is the median income?

2. What percentage of households in the state qualify as middle class?

3. What percentage of households in the state spend more than 30 percent of their monthly income on housing?

They compared answers to these three questions in the year 2000 and 2013. Consistently, the median income went down, the percentage of people qualifying as middle class went down, and more people are spending over 30 percent of their monthly income on their housing payment.

This data does not include number of people living in the household. Therefore, a single adult in California in 2013 making $42,000 qualifies as middle class. His studio apartment likely costs him less money than the two-bedroom apartment rented by a family of four bringing in the same amount of money.

While the family of four also meets the above definition of “middle class,” they have a higher cost of living. They purchase more food, have a higher rent payment, and if both parents are working they are likely paying child care costs. The single adult may have disposable income, while the family of four is struggling.

The point here is that the numbers offered in this compilation of data do not tell the whole story.

Middle Class Values

If we define “middle class” by values, then the definition is fluid and constantly changing. Jesse Klein writing for the Michigan Daily insists that she is middle class. She lives in a $2 million home (with no pool!) and comes from a family with a $250,000 annual income. Yes, wealth and class are relative.

Whether you agree or disagree with Henry Dampier’s opinions, his reporting of the historical attitudes of the middle class are accurate. Thrift and hard work that led to ownership were the core of middle class values in a bygone era. Today, we see members of the middle class sinking in debt in order to pay for things that they can not afford.

Perhaps the best definition of middle class status is members of the middle class have to work for what they have. The idea is that their hard work pays off and they can afford to own more than the “lower” classes. Unfortunately, as incomes fall and costs rise, the middle class is no longer able to move up the economic ladder.

Tell Us What You Think

How would you define “middle class?” We want to hear from you! Leave a comment or join the discussion on Twitter.


Leave a Reply

2 Comments on "Who Are the Shrinking Middle Class?"

Notify of
avatar
Sort by:   newest | oldest | most voted
Linda
Guest

Middle class to me is defined as: having an income the surpass your expenses. Having access to health insurance and other fringe benefits and also being able to take a vacation at least once a year.

bryan taylor
Guest

If the ranks of middle income families has declined, where did all those people go? The long term trend actually shows the loss in middle income households has been offset by an increase in upper income households. Middle class families becoming upper income families….this is a good thing. I’ve plotted household income data from the U.S. Census which shows the growth in the numbers of upper income families. See the link: http://unrepentantcapitalist.blogspot.com/2013/12/middle-class-problem-what-data-says.html?utm_source=BP_recent

wpDiscuz
What Am I Worth?

What your skills are worth in the job market is constantly changing.