From politics and census stats to memes and activist resources, you’ve probably heard the term “middle class” before. But what exactly does middle class really mean? It depends on context.
It turns out, categorizing the middle class isn’t so straightforward. There are a lot of nuances, like income, cost of living, and consumption, that have changed the middle class’ definition over time.
Here, we’ll consider the variables that define the middle class, talk about what middle-class income looks like, and discuss the new ways we define class in the US today. Read on for an in-depth overview, or use the links below to skip to the section that best answers your question.
- What is Middle Class?
- What is Middle Class Income?
- What Does The Middle Class Consume?
- What Class am I in?
- New Ways to Define Class in The US
- Wrapping Up
What is Middle Class?
Being “middle class” means something different to everyone and a quick Google search for “middle-class definition” will show you what we mean.
The Oxford English Dictionary says the middle class is “the economic group between the upper and lower classes, including professional and business workers and their families.” But a closer look demonstrates that the definition is not that simple.
Because the term has so many connotations, like income, social currency, and education, people tend to define it differently, especially as economic and societal contexts have changed. With that said, the Brookings Institute says the middle class can usually be categorized into three definitions: cash, credentials, and culture.
- Cash: Economic assets such as gross income and property that help insulate them from poverty
- Credentials: Educational and occupational status, achievements, and qualifications
- Culture: Social capital, mindset
While society usually looks at the middle class and its counterparts in a more holistic lens, it’s worth noting that economists typically associate class with cash exclusively. We’ll explain middle class incomes a little later on in this post.
Categorizing the middle class: breaking down cash, credentials, and culture
Now that you’re familiar with the complexities of defining the middle class, let’s take a closer look at the Brookings Institute definition. Here, we’ll consider how cash, credentials, and culture contribute to the upper, lower, and middle-class definitions.
Cash definitions of the middle class are usually based on one or more of the following factors:
- Distance from the median income: This metric is commonly used to distinguish upper, middle, and lower-class income brackets. If you were to look at income on a scale, median income would be the middle earnings between the highest and lowest numbers. Using this reasoning, the closer to the median you are, the more likely you’re considered middle class. However, this logic can be problematic if lower or upper classes change disproportionately.
- The range of income distribution: This definition looks at the middle class as a fixed population broken down into several segments, like “lower-income middle class” and “upper-income middle class.”
- Distance from the poverty line: This approach uses the federal poverty line as a benchmark to decide who is middle class. The minimum taxable income used is about 150% of the federal poverty level.
- Purchasing power: This definition uses a household’s purchasing power to determine whether they fall into the middle-class category. According to the Brookings Institute, economists break this down into amounts of dollars per family member, per day.
- Wealth and consumption: The final income-based approach looks at a household’s economic stability in the event they experience some sort of financial turbulence. Access to cash assets, such as stocks, retirement, property, and bank accounts would be considered in this definition.
When evaluating the middle class in terms of credentials, the Brookings Institute says occupation and education are the primary variables considered.
- Occupation: What a person does for work and how much they earn is another characteristic used to define the middle class. The primary problem with this definition is that occupation applies to individuals and class is typically assessed on a household basis.
- Education: Level of education is another way economists look at the middle class. The issue with this definition is that over time, the value of higher education degrees has changed and continues to do so.
In addition to tangible data, like occupation and income, the Brookings Institute says class can also be evaluated in a more conceptual context. Because culture itself can be defined in so many ways, there are four categories that are used to define the middle class in a cultural lens:
- Aspirations: In this approach, the middle class is defined by their goals and attitude. According to this idea, goals such as owning a home, affording college for their children, owning at least one vehicle per adult, having adequate healthcare, and taking an annual vacation are all examples of middle-class goals.
- Self-perception: This definition relies on an individual’s own perception of the middle class. The self-perception approach can be evaluated by conducting surveys.
- Cultural norms, preferences, and taste: Considering how an individual lives their day to day life is another way of looking at the middle class. According to the Brookings Institute publication, this definition is used in the UK where scholars consider an individual’s engagement in “highbrow” vs. “emerging” cultural activities.
- Class and race: Lastly, the middle class can be looked at through the lens of class and race. Because of the historically racist economic and social structures in the United States, the middle class has been and continues to be mostly made up of white Americans. According to the Brookings Institute and supporting surveys, black Americans are less likely to perceive themselves as part of the middle class, even if they belong to the same income brackets as other middle-class households — though this is starting to change.
So, what is the middle class? It often depends on context. Depending on who is evaluating it and why, cash, credentials, and culture may all be considered.
What is Middle Class Income?
Now that we’ve discussed some of the characteristics we use to categorize the lower, middle, and upper class, you’re probably wondering, “what income is middle class?”. Again, it’s not necessarily an easy answer.
According to the Pew Research Center, middle-class income is based on your earnings and the size of your household. To qualify as middle class, Pew says you must earn between two-thirds and two times the median income for the size of your household.
With the Pew Research Center’s definition in mind, middle-class income can range between $46,960 and $140,900 per year.
What Does The Middle-Class Consume?
What Class am I in?
It depends on context and what definition you apply. You may consider yourself middle class because your annual income falls within the range of $46,960 and $140,900. Or, you may consider yourself middle class because of your education, occupation, self-perception, or personal goals.
New Ways to Define Class in The US
Now that we’ve covered the not-so-straightforward definition of the middle class, it’s time to explore how the class narrative has shifted in more recent years. Let’s take a look at two new ways to consider the question, “what is middle class?”.
- Top 20, bottom 80: Though we often hear about the separation between upper, middle, and lower class, as well as the divide between the upper 1% and the lower 99%, some say these terms no longer apply. Instead, Senior Fellow at the Brookings Institute, Richard V. Reeves, suggests we look at the American class system as the top 20 and bottom 80. This is increasingly more accurate as wealth and income continue to be more unevenly distributed in the US.
- Economic mobility: Whether you and your family have or expect to move up in class level describes your economic mobility. While the US often highlights its culture of opportunity, and economic idea called intergenerational earnings elasticity (IGE) challenges this statement. IGE measures how much a parent’s income impacts their child’s income and opportunity for economic mobility. As it turns out, the relationship is strong, especially in the US where IGE is higher than most other developed economies in the world.
As you can see, defining the middle class isn’t a one-size-fits-all kind of approach. There’s a lot to consider based on economic security, history, economic and opportunistic access, cultural contexts, and more.