Experts Explain How They Define Middle Class Today

aerial of middle class neighborhood
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The middle class contains about half of America, according to the Pew Research Center — 52%, to be exact. Another 19% fall into the upper class and 29% are in the lower class. But what is the middle class, exactly, and who gets to decide who’s a member?

Certainly not the 48% that Pew categorizes as something else.

“Ninety percent of people interviewed say they consider themselves to be in the middle class,” said Jeff Webb, author of “American Restoration: How to Unshackle the Great Middle Class.”

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So, if nine out of 10 people consider themselves to be middle class, but only half truly are, perhaps the definition of the demographic has changed.

GOBankingRates talked to several experts who think that’s precisely the case.

Middle-Class Money: What Are the Income Requirements?

Money — and the security it brings — is at the heart of what it means to be middle class, but the concept also includes intangibles that are harder to quantify.

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“It should be mentioned that the middle class is defined not only by income but also by occupation, education and social status,” said Bill Ryze, certified chartered financial consultant and board advisor at Fiona.

In an age where more than 40% of the country’s six-figure earners live paycheck to paycheck, it’s getting harder to tell the haves from the have-nots. But in its simplest form, the middle class is neither poor nor rich, so what are the income parameters?

“When consulting my clients, I always refer to Pew Research Center’s classification,” said Ryze. “$30,000-$90,000 per year is considered the middle class. For a family of two, this range is $42,431-$127,293 and for a family of three, it’s $51,967-$155,902.”

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It’s Not How Much You Have, It’s How Much You Can Buy

The problem with specific dollar amounts, of course, is that a dollar buys a whole lot more or less depending on where you spend it.

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“For example, a person who lives in New York City and earns $60,000 is considered lower-middle class,” said Ryze. “The same individual would be upper-middle class if they lived in Wichita, Kansas.”

A more accurate accounting would probably be to measure against the earner in the middle.

“In the United States, the term ‘middle class’ is used to refer to households with incomes between two-thirds and twice the median income in their area,” said Jensen Lee, founder and managing member of BidetsPLUS.

The Rich Have Grown in Wealth and Numbers at the Expense of the Middle Class

The American middle class emerged as a force after World War II, but about 30 years later, it began contracting and continues to shrink to this day.

“While the middle class is declining — from 61% in 1971 to 50% in 2021 — it is still alive and attainable, despite challenges,” said Lilian Chenco, founder and chief operating officer of Bar None Games. 

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Those challenges are not insignificant.

Pew backs up Chenco’s numbers. It also points out that as the middle class has steadily contracted over the last half-century, the ranks of the rich have swelled and the wealth gap has widened.

In 1983, upper-income households owned 60% of the country’s wealth. By 2016, their share had grown to 79% — that’s four dollars out of five for the rich with everyone else left to divvy up the scraps. The wealthiest Americans now have 12-figure fortunes and it’s plausible that one of them will become the world’s first trillionaire in the near future.

For middle-class Americans, the fortunes have been flowing in the other direction.

“The problem is that many people are now finding it harder to maintain the same level of financial success as their parents or grandparents did,” said Ryze. “Wages have been stagnant for decades, the cost of living has increased and the ability to save money has diminished. The issue gets even thornier as we are on the verge of a global financial recession. I believe that the middle class still exists but the entry barrier got steeper — and it got more difficult to stay within the middle class.”

The Middle Class Is the American Dream — Or, It Used To Be

In the abstract, the middle class has always represented the American dream — economic security, a safe and comfortable life and a future for your children. But is the dream becoming a fantasy? For many, it already has.

“While middle-class Americans have always been generally optimistic about their economic security and future, the COVID pandemic and today’s brutal inflation are taking their toll,” said Webb.

“Attaining those things that are generally associated with being in the middle class — like homeownership, some level of savings, a retirement fund and job security — are now seen less as certainties. What’s worse, Americans are feeling abandoned by big business, the wealthy professional class and their government. And while the perception that working hard, getting an education and being a good citizen were always seen as the path to economic security and a relatively comfortable lifestyle, today’s economic challenges are rocking the foundation of middle-class confidence and optimism.”

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About the Author

Andrew Lisa has been writing professionally since 2001. An award-winning writer, Andrew was formerly one of the youngest nationally distributed columnists for the largest newspaper syndicate in the country, the Gannett News Service. He worked as the business section editor for amNewYork, the most widely distributed newspaper in Manhattan, and worked as a copy editor for TheStreet.com, a financial publication in the heart of Wall Street's investment community in New York City.

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