How Much the Definition of Upper Middle Class Has Changed In California

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If you’ve lived in California for a while, you’ve probably noticed that what once felt “comfortable” financially doesn’t quite stretch as far as it used to. Prices for housing, groceries and even a simple cup of coffee have steadily climbed, and with them, the bar for what counts as “upper middle class” has shifted, too.

For example, the lowest end of upper-middle class income back in 2022 equated to $142,964, according to GOBankingRates.

Once upon a time, a household income that comfortably landed you in the upper middle class category might have meant a bigger home, savings for the future and some wiggle room for vacations. These days, though, that same income can feel like it’s just covering the basics — especially in high-cost areas like the Bay Area or Los Angeles.

So how exactly has the definition of “upper middle class” evolved in California? And what does it take today to be considered part of that group? 

Here’s a closer look at how the numbers have changed, and what they reveal about living standards in the Golden State.

Housing Prices Have Sky-Rocketed in California Over This Past Decade

According to Jimmy Fuentes, consultant at California Hard Money Lender, a standard middle-class house that could have been affordable two decades ago is now too expensive as many citizens cannot afford it. 

“The median home price in California has risen steadily and far faster than inflation with some areas experiencing a rise in prices up to 50% in less than five years.” 

He observed an example of this is seen in the Bay Area where the median price of a house in 2023 projected to be $1.3 million, making it extremely difficult to find a home at this price range. 

“When the median income of all of the people in the state of California is an estimated $80,000,” Fuentes added.

Purchasing Power of Various Families Has Been Depreciated Due to Inflation

What was previously regarded as a comfortable income for an upper-middle-class family can no longer be used to obtain the same standard of living because groceries, health care and day care costs more.

As an effort in minimum wage, Fuentes said California may have succeeded in raising the wage but it remains low in most areas. 

“Despite the rise, a good percentage of workers still cannot keep pace with the rising prices of living in such cities as Los Angeles, San Francisco and San Diego, where the cost of living has been soaring faster than the wage,” he explained.

The Bottom Line: Think Beyond Regular Employment

According to experts, the upper middle-class indicators that were once symbols of success such as homeownership, secure employment and comfortable living standard, are becoming harder to achieve –making Californians feel compressed. 

Fuentes believes the best way to handle this is to be proactive as an individual and family. Having alternative investment, like property, or multiple sources of income has also become vital to security. 

“In my opinion, people considering themselves in need of maintaining an upper-middle-class lifestyle should ponder beyond the patterns of regular employment and consider something like real estate investment, which can be used as a hedge against inflation,” the consultant said.

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