What is 'middle-class'? - 5/12/2023
Per the Pew Research Center, in 2023 the middle class earns $47,000-$141,000 per year. That amount means different things depending on age, family size, and location. Even so, that definition is just a dollar range.
The concept of determining who is the middle class uses the various mathematical terms we learned in school such as mean, median, and mode or the center area of the bell curve. These may be a convenient benchmark, but they are not a useful measurement in real terms.
If we use the thought of 'the middle class can purchase everything they need and some of what they want' it gets more complex. There is a range of housing that some 'poor' can afford or that some 'rich' can't afford. The same with cars and other life needs. Who determines what 'need' is?
Others describe middle class as a mindset, that sees opportunity for upward mobility. That definition broadly expands the middle class. Many wealthy people, in terms of both income and net worth, see themselves as middle class since they know people with more wealth than they have, and many poor people feel positively (rightly so!) that their opportunities are within reach. People want to be included in the middle class; it feels emotionally comfortable to be in this particular crowd.
We hear in the news that the middle class is shrinking, and politicians talk about helping the middle class. The good and the bad of this is that the ill-defined middle class is the focus of a lot of attention.
What does this really mean for us regarding the middle class? Our views on where we are located financially may not match up to any particular definition. Whether you fit into any definition of middle class or not doesn't matter. Your financial situation, your opinions, your votes, your planning, should all be determined by what is the best practice for you to reach your financial goals. Don't worry about the label.
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