The middle class is a description given to individuals and households who typically fall between the working class and the upper class within a socio-economic hierarchy. In Western cultures, persons in the middle class tend to have a higher proportion of college degrees than those in the working class, have more income available for consumption, and may own property. Those in the middle class often are employed as professionals, managers, and civil servants.
Key Takeaways
- The middle class is a socio-economic strata that falls in between the working class and the upper class.
- The middle class constitutes about half of the U.S. population, but it has shrunk over nearly half a century.
- Those in the middle class have enough disposable income to afford minor luxuries like vacations or restaurants but also rely on borrowing for big-ticket items like homes and cars.
Understanding the Term "Middle Class"
The word "middle" may be misleadingin thatit suggests that those in the middle class have earnings within the middle of the population's income distribution, which may not be the case. Middle class families tend to own their own home (although with a mortgage), own a car (although with a loan or lease), send their kids to college (although with student loans or scholarships), are saving for retirement, and have enough disposable savings to afford certain luxuries like dining out and vacations.
Karl Marx referred to the middle class as part of the bourgeoisie (i.e. the "petit bourgeoisie:, or small business owners) when he described the way in which capitalism operates, in opposition to the working class, which he termed the "proletariat". The term "middle class" itself has shifted in meaning over time, having once referred to persons who had the means to rival nobles to the contemporary meaning that is more akin to the upper end of the working class.
Recently, there has been talk of a "disappearing middle class" in modern society, as income inequality has tended to "hollow out the middle" and largely benefit the top (e.g. the top 1%). At the same time, the term has shifted to include upper-middle and lower-middle classes to account for the increased stratification.
50%
The number of Americans who belong to the middle class as of 2021, according to the Pew Research Center.
What Constitutes the Middle Class
The birth of the middle class, in some respects, has been linked to federal funding and support through programs such as the G.I. Bill, which offered funds for education and the start of businesses created by veterans who were discharged. The combination of incentives and salary increases helped elevate working class citizens into the newly forming middle class.
The income parameters that define the middle class continue to change and not solely based on the rate of inflation. Regional disparities in income and the cost of living mean that salary-based measures of the middle class can vary greatly. Different income barometers describe the middle class as having income from $50,000 to $150,000 or, in some instances, $42,000 to $125,000. Other measures of middle class set the upper-income mark at $250,000.
A 20$ Minimum Wage
If wages increased at the same rate as labor productivity since 1968, the hourly minimum wage would now be over $21, according to the Center for Economic and Policy Research.
Characteristics of the Middle Class
The concept of middle-class society may include a presumption of earning a salary that supports owning a resident in a suburban or comparable neighborhood in rural or urban settings, along with discretionary income that allows for access to entertainment and other flexible expenses such as travel or dining out. While it is assumed that middle-class households generate sufficient income for retirement savings along with standard expenses, an increasing segment of this portion of the American population is also living paycheck to paycheck.
An ideal commonly held among the middle class is that it is possible to increase their income to higher economic strata through career advancement and salary upgrades. The pace of such upward mobility aspirations, however, has changed over the decades with the costs of goods and services, in some cases outpacing the growth of salaries.
What Income Is Considered Middle Class?
The Pew Research Center defines "middle class" as an income that ranges between two-thirds and double the median income. The exact boundaries of a middle-class income vary by family size and location, due to the geographical differences in cost of living. That works out to an annual income between $52,000 and $156,000 for a three-person household, as of 2020.
How Large Is the Middle Class?
According to a 2022 analysis by the Pew Research Center, about 50% of Americans were in the middle class as of 2021. That represents a sharp decline from 61% in 1971.
How Much Should the Average Middle-Class Person Save for Retirement?
As a rule of thumb, many financial advisors recommend saving at least three times your annual income by the end of your thirties. Since the median income for a 35-year-old is $63,000, that means saving around $189,000.
The Bottom Line
The middle class is the economic stratum between the working class and the wealthy. In the United States, the middle class occupies about half of the population, mainly consisting of people who work in white-collar professions, small businesses, or skilled trades. The middle class has declined since the 1970s, due to the loss of highly-paid manufacturing jobs and increasing economic inequality.
FAQs
The Pew Research Center defines "middle class" as an income that ranges between two-thirds and double the median income. The exact boundaries of a middle-class income vary by family size and location, due to the geographical differences in cost of living.
What are middle class traits? ›
The following factors are often ascribed in the literature on this topic to a "middle class:" Achievement of tertiary education. Holding professional qualifications, including academics, lawyers, chartered engineers, politicians, and doctors, regardless of leisure or wealth.
What defines a middle class person? ›
a social group that consists of well-educated people, such as doctors, lawyers, and teachers, who have good jobs and are not poor, but are not very rich: The upper middle class tend to go into business or the professions, becoming, for example, lawyers, doctors, or accountants. Compare. lower class old-fashioned.
How do Americans define middle class? ›
One commonly used definition from the Pew Research Center sets a middle-class income between two-thirds and twice the national median income, or $67,819 to $203,458 for a family of four in 2022. Most Americans consider the lower end of that range, $75,000 and $100,000, to be middle class, according to the Post poll.
What income is considered middle class? ›
In California, the middle class income range for 2022 was $61,270 to $183,810. Compare that to the average in 2012, which was $40,933 to $122,800. That's a 10-year change of 49.68%.
What are the 3 characteristics of lower middle class? ›
In developed nations across the world, the lower-middle class is a sub-division of the middle class that refers to households and individuals who are somewhat educated and usually stably employed, but who have not attained the education, occupational prestige, or income of the upper-middle class.
What are the five socioeconomic classes? ›
Gallup has, for a number of years, asked Americans to place themselves -- without any guidance -- into five social classes: upper, upper-middle, middle, working and lower. These five class labels are representative of the general approach used in popular language and by researchers.
How to tell if someone is middle class? ›
In Western cultures, persons in the middle class tend to have a higher proportion of college degrees than those in the working class, have more income available for consumption, and may own property. Those in the middle class often are employed as professionals, managers, and civil servants.
What does a middle class lifestyle look like? ›
The Bottom Line
There is no official financial standard for what constitutes middle class. For most it's more about a standard of living—including owning a home, being able to afford to pay for a college education for your kids, and having enough disposable income to take a family vacation.
What professions does the middle class work in? ›
Here are the 10 occupations with the largest shares of middle class workers, according to Pew:
- Armed forces: 65%
- Maintenance, repair and production: 64%
- Protective and building maintenance services: 62%
- Office and administrative support: 62%
- Education: 61%
- Transportation and material moving: 59%
“The middle class is typically characterized by having a stable income and some level of financial security. They tend to value education, homeownership and health insurance. The upper-middle class is distinguished by having a higher level of income and wealth compared to the middle class.
What makes you upper middle class? ›
Many have graduate degrees with educational attainment serving as the main distinguishing feature of this class. Household incomes commonly exceed $100,000, with some smaller one-income earners household having incomes in the high 5-figure range. "The upper middle class has grown...and its composition has changed.
What does the middle class struggle with? ›
A growing number of middle-class families are struggling to afford the basics of housing, childcare, food, transportation, and healthcare. Many in America's middle class are feeling less prosperous than in generations past.
What is the difference between working class and middle class? ›
What qualifies as working or middle class varies from region to region, but country-wide, a salary of $30,000–$90,000 qualifies a single individual as middle class, with incomes below that range falling into the working class. Homer Simpson is working class.
How much income is considered rich? ›
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
What income is upper class? ›
Upper-middle class: $94,001 – $153,000. Upper class: greater than $153,000.
What salary is considered middle class in 2024? ›
What is the average middle class income? In 2024, a large U.S. city's middle-class income averages between $52,000 and $155,000, with the median household income across all 345 cities at $77,345, making middle-class income limits fall between $51,558 and $154,590, SmartAsset noted.
What is a good salary in 2024? ›
Decent Salary
| Annual Salary | Monthly Pay |
|---|
| Top Earners | $86,000 | $7,166 |
| 75th Percentile | $68,500 | $5,708 |
| Average | $44,910 | $3,742 |
| 25th Percentile | $24,500 | $2,041 |
The lower middle class is often made up of less educated people with lower incomes, such as managers, small business owners, teachers, and secretaries. The upper middle class is often made up of highly educated business and professional people with high incomes, such as doctors, lawyers, stockbrokers, and CEOs.
How much money is considered middle class? ›
In a large U.S. city, a middle-class income averages between $52,000 and $155,000. The median household income across all 345 cities is $77,345, making middle-class income limits fall between $51,558 and $154,590.
But generally, doctors are what you'd consider upper middle class.
Am I middle or upper class? ›
In 2020, according to Pew Research Center analysis, the median for upper income households was around $220,000 and the median for middle income households was slightly above $90,000.
How to identify your social class? ›
By comparing their wealth, education, occupation, aesthetic tastes, and behaviour with those of others, individuals can determine where they stand in the social hierarchy, and this subjective social rank then shapes other aspects of their social behaviour. More recent research has confirmed these findings.
How do you tell what class you are? ›
How a person perceives their own social class extends beyond what a W-2 income form claims they earn, experts say. You can look at income, education, marital status, location, family history, gut instinct and a host of other factors to find out where you fall.
What are 3 characteristics of the upper middle class? ›
In the United States, the upper middle class is defined as consisting of white-collar professionals who have above-average personal incomes, advanced educational degrees and a high degree of autonomy in their work, leading to higher job satisfaction.
What is the difference between high class and middle class? ›
Middle class: Those in the 40th to 60th percentile of household income, ranging from $55,001 to $89,744. Upper middle class: Households in the 60th to 80th percentile, with incomes between $89,745 and $149,131. Upper class: The top 20% of earners, with household incomes of $149,132 or more.
How do middle class people think? ›
Middle class people tend to operate with a scarcity mindset: They believe there will never be enough of something. As a result, they're extremely conservative with their finances; they fear that if they lose money, they won't be able to make it back.
