Dean Baker: Middle Class on What Planet?

[marmar]

from The American Prospect:



Middle Class on What Planet?

The Washington Post reports on a new trend for middle class white families with children to live in cities. The fourth sentence tells us that: "In the national imagination, it was a place of artists, musicians, socialites, Wall Street bankers -- or of hustlers, runaways, addicts, murderers. But it was not on the radar of the typical white, middle-class couple as a place to raise children.

Those who read a bit further will find that the median income for a white family with children living in Manhattan was $280,000 in 2005, roughly $300,000 in today's dollars. That's enough to place this family well up into the top 2 percent of the country's income distribution.

That's not middle class by the usual meaning of the term. There may be more rich white people with children living in Manhattan today than a decade ago, but this article, which includes discussions of private school admissions advisers ($15,000 fee), 3000 square foot luxury condos, and nannies who specialize in twins, is not talking about middle class people.

--Dean Baker

Posted by Dean Baker on March 30, 2008 8:54 AM


http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=03&year=2008&base_name=middle_class_on_what_planet

[flashl]

1. Maybe its the 'new' middle-class?

In America, millions make you middle-class

NEW YORK (Reuters) - For most people around the world, earning a million dollars makes you rich. In America, it just makes you middle class.

A new book, "The Middle-Class Millionaire: The Rise of The New Rich And How They Are Changing America" ($24, Currency Doubleday), finds that 8.4 million U.S. households have a net worth of between $1 million and $10 million of money they did not inherit.

While these middle-class millionaires live in regular neighborhoods and send their kids to public schools, they behave very differently from their less-wealthy neighbors.

[Selatius]

2. If your net worth is between 1 to 10 million, don't flatter yourself by thinking you're rich.

You're just small fries compared to the real power brokers in America. Maybe if you got somewhere north of 10 million, you might get a small seat at the power table. 100 million? Sure! But don't pretend you're on equal footing with the billionaires in the lounge.

[Igel]

8. The economics wizard that wrote that article confuses

"earned income" with "net worth".

There's a large difference. My parents' net worth is far more than any single year's income. Due to concurrent grad schools, dissertation writing, post-docs, etc., etc., my immediate family's net worth is closer to our annual income, but still higher.

[Uncle Joe]

3. Does anyone know what the median income is for a family living in the United States?

Whatever it is, that's my definition of middle class.

[Hannah Bell]

5. Median household is around 50K.

Median individual I think is a bit under that, in the 40s.

If memory serves.

200K household is (again if memory serves) top 5 or 10% of households.

But the data (census/irs) doesn't do well in including/assessing the very top incomes. Census in particular, by design, excludes the super-rich.

[sicksicksick_N_tired]

6. It ain't 300K/year,...that's for dayum sure!!!

It's probably 1/4 to 1/5 of that or less. I'll see if I can get a reliable number (hard to find, these days).

[Mountainman]

4. It shows that more and more of us are falling out of the middle class but haven't realized it yet.

If the upper limit of middle class is rising then the bottom must be rising also. Now if majority of incomes do not change as fast as the movement of middle class incomes upward, then some of us are falling out of the middle class as the bottom passes us by.

[Beregond2]

7. NYC

Point taken, but in Manhattan, that probably is the middle. When I lived there, I liked to point out that the two most common jobs in Manhattan were investment banker and waiter. There is no better place to quickly realize that America is a class-structured society. Even the subway stations improve when you get into moneyed neighborhoods. In NYC, you are either rich, or you are in service to the rich. I can't understand why someone with a 300K income would live there. That would buy a middle class lifestyle there; anywhere else, it would buy luxury.

[Uncle Joe]

9. I believe this is what's skewed about our treatment of economics

in general, and this dynamic only serves to defy gravity and send money flowing upward in to the hands of the mega wealthy. The political leaders speak with great empathy about the poor people making less than 150K and to the vast majority of the rest of America, they might as well be on Mars.

I don't believe life style should determine income class, rather the other way around.