Daily Archives: February 7, 2015

middle class

There has been a lot of discussion in the US lately about the middle class and who is part of it.  A lot of people seem to be confused about constitutes the middle class and think it is actually the people in the middle financially – perhaps the 25th to the 75th percentile, or the 10th to the 90th percentile.  This may not be completely ridiculous in the US, but it doesn’t make any sense in general.  Some countries have no middle class with the majority of their citizens living in poverty.  Other countries have a small, relatively new but growing middle class, like India.  Other countries have a large middle class.  In fact, I would argue that the size of the middle class is an excellent indicator of how well off a country is.

Here’s what wikipedia has to say about it:

The modern usage of the term “middle class”, however, dates to the 1913 UK Registrar-General’s report, in which the statistician T.H.C. Stevenson identified the middle class as that falling between the upper class and the working class.  Included as belonging to the middle class are professionals, managers, and senior civil servants. The chief defining characteristic of membership in the middle class is possession of significant human capital.

The following factors are often ascribed in modern usage to a “middle class”:

  • Achievement of tertiary education.
  • Holding professional qualifications, including academics, lawyers, chartered engineers, politicians, and doctors, regardless of leisure or wealth.
  • Belief in bourgeois values, such as high rates of house ownership and jobs which are perceived to be secure.
  • Lifestyle. In the United Kingdom, social status has historically been linked less directly to wealth than in the United States,[4] and has also been judged by signifiers such as accent, manners, place of education, occupation, and the class of a person’s family, circle of friends and acquaintances.[5][6]
  • Cultural identification. Often in the United States, the middle class are the most eager participants in pop culture whereas the reverse is true in Britain.[7] The second generation of new immigrants will often enthusiastically forsake their traditional folk culture as a sign of having arrived in the middle class.

From the article specifically discussing American middle classes:

Later sociologists such asDennis Gilbert of Hamilton College commonly divide the middle class into two sub-groups. Constituting roughly 15% to 20% of households is the upper or professional middle class consisting of highly educated, salaried professionals and managers. Constituting roughly one third of households is the lower middle class consisting mostly of semi-professionals, skilled craftsmen and lower-level management.[2][4] Middle-class persons commonly have a comfortable standard of living, significant economic security, considerable work autonomy and rely on their expertise to sustain themselves.[5]

Members of the middle class belong to diverse groups which overlap with each other. Overall, middle-class persons, especially upper-middle-class individuals, are characterized by conceptualizing, creating and consulting. Thus, college education is one of the main indicators of middle-class status.

Anyway, I just think it’s interesting to ponder these points.  Talking heads are always referring to working class voters and how they don’t like to vote for Obama.  Obama himself will never refer to working class voters.  He is instead always reaching out to the “middle class” by which I think he actually means the working class – the people who apparently don’t vote for him.  The people meant to pay for his various plans are the “rich” or the “super rich” – apparently people who own 529s, for example.  Somehow the rich always seem to be, for example, people who earn about what two engineers working full time would earn.  Meanwhile, the truly super-rich – my boss for example – rarely seem to be affected.  The reason for this, I suppose is obvious.  There aren’t very many truly super-rich, and unless you tax their assets (as opposed to income) you actually can’t make that much money off them.  You have to tax the middle class.  But this is politically unpalatable, so you relabel the middle class “affluent” or “very affluent” or “the most affluent.”

I grew up in a household that was unambiguously middle class.  Interestingly, when I stay home with the kids, our current household is also probably not too controversially middle class.  When, however, I go to work full-time, Obama might call us rich.  I find this a little ironic, because after taxes and child care, I earn about the same as our nanny.  However, because our pre-tax, pre-childcare income becomes much higher, we cross his threshold.  (Admittedly, we could have found cheaper childcare for L, but now that we have two, there is no such thing as cheap childcare until L goes to school.)

For what it’s worth, I think you are rich if, among other things:

  • You have a vacation house or a country house
  • You can afford to pay for private college out of your salary, as opposed to saving for it for one or two decades
  • You can afford to fly first class (getting bump for being a frequent flyer obviously doesn’t count)
  • You have a full-time servant or house manager or assistant