Define middle class

Marketplace Staff Dec 1, 2006


KAI RYSSDAL: Score one for the middle class. The incoming Democratic majority in Congress has staked a claim to be your champion. Payoffs for lots of political promises are coming your way, but exactly what does it mean to be a member of the middle class? We sent our Washington bureau chief John Dimsdale to find out.

JOHN DIMSDALE: By a vast majority, Americans claim to be middle class. Eighty percent in most polls.

Democrats campaigned to shield the middle class from tax hikes like the ballooning Alternative Minimum Tax. And to protect middle class benefits like student loans. To afford their agenda and lower the deficit, Democrats promised to roll back Republican tax cuts for the wealthy.

So what separates the rich from the middle class? Texas Democrat Lloyd Doggett had this definition during House floor debate on a Republican measure to get rid of estate taxes.

LLOYD DOGGETT: Will you benefit from these new tax breaks today? Well, take this quiz: Do you play Yahtzee or maintain a fleet of yachts? Do you wear a hard hat or a silk top hat? Do you drive a pickup or own a gallery of Picassos? Do you pump gas by the gallon or sell it by the barrel?

But Americans have a more nuanced view of what it means to be middle class. We randomly sampled people on the streets of Los Angeles, Kansas City and New York, all of whom put themselves in the middle class.

WOMAN IN LA: The average person. Someone that makes an income of $50,000 to $70,000 a year. Has a car, has a house or an apartment.

MAN IN KANSAS CITY: I live the way I want to live, but not extravagantly. I got an undergraduate degree and a masters and I don’t live the high life. But I live the way I want to. Comfortably.

WOMAN IN KANSAS CITY: Someone who is able to at least pay their bills every month and have a little left over. Save a little bit og money. Be able to appreciate things that are finer quality like art and music.

MAN IN NYC: It’s harder to be in the middle class in New York because the middle class here seems to be priced out, especially in housing. I am part of the middle class but I can’t imagine how what used to be the middle class afford to live in this city any more.

According to our random sample, middle class membership is earned with an annual household salary between $40,000 to $80,000, higher in New York, lower in Kansas City.

Karlyn Bowman, an expert on demographics and public opinion at the American Enterprise Institute, says historically Americans have had a good sense of what a middle class income means.

KARLYN BOWMAN: I’ve been struck by a question the Roper organization started asking many years ago when they asked people what would it take just to get by. What would it take to live in reasonable comfort? And what would it take to fulfill all of your dreams? And to live in reasonable comfort for most people seems to be the median income. It comes out that way in poll after poll after poll.

The Census Bureau reports the annual median household income in 2005 was $46,326. That’s up 30 percent over the last 48 years.

There’s no official government definition of the middle class. However, the Census does divide the nation’s income earners into fifths. While the top fifth’s share of total income has grown, the middle three fifths’ piece of the pie has steadily declined.

Newsweek columnist Robert Samuelson says middle income earners are feeling squeezed.

ROBERT SAMUELSON: There’s more insecurity about jobs, there’s more insecurity about the nature and extent of your fringe benefits. How much will your employer pay of your health care costs? How generous or ungenerous will your pension be? And I think that one of the hallmarks of the middle class is being secure. So to the extent that insecurity now is part of the normal landscape, it seems like an assault on the middle class.

Which brings us to our last defining characteristic of the middle class: If you’re feeling anxious about your future financial well-being, welcome to the club.

In Washington, I’m John Dimsdale for Marketplace Money.

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