Personal Finance

Does Your Income Level Put You in the Middle Class?

BY Mike Valles TIMEAugust 29, 2022 PRINT

A question almost everyone will ask at some point in their life is what class is their income level. While few people like to think that they are living below the poverty line, not many are going to be able to become what is considered upper class. Most people, it seems, like to know that at least they are middle class.

Every so often reports come out from the Pew Research Center that reveal the changing numbers that determine which income class you are in. Inflation rates and issues such as COVID-19 are now affecting these numbers every year.

The consequences of the pandemic have resulted in more people dropping from the middle class to the lower class than in recent years. At the same time, more people have also gone from the middle class into the upper class since COVID-19 began—causing a shrinking of the middle class from both ends.

The Term “Middle Class” Can Have Multiple Definitions

Although the most common factor determining which class someone is in is usually based on income, it certainly is not the only factor. Different researchers have come up with their own list of factors, and the experts often do not agree, reports USAToday.

Some researchers also like to factor in certain aspects to determine an income class, such as having your own home and car, the ability to take occasional vacations and trips, putting money away in retirement accounts, and having the ability to pay for your children’s college education. These are important factors to be considered middle class.

A few researchers like to consider additional factors, such as having a college education, a white-collar job, and some may throw in having certain values, whether social or political.

There also are some negative factors that, when considered in the equation of your income status, may cause others to think differently. NextAdvisor mentions three of them: your personal savings rate, your investments, and debt.

Someone with a lot of debt, for instance, may not be able to do much else but meet their bills or have much money left at the end of the month. Compare this with someone who has the same income and little debt, and they can put money in savings or investments and take vacations.

Where People Consider Themselves to Be

Most people do not want to think of themselves as being in the lower class. PewResearch comments that most people are not willing to identify themselves as being in the lower class—so they tell others (and maybe themselves) that they are in the middle class.

The Income Factors

So this brings up the question: what is middle-class income?

The most common method—and fastest way of determining what is considered middle class—is to look at traditional income measurements. PewResearch sets the financial ranges for a family of three as follows:

  • Low income makes less than $52,200.
  • Middle income ranges from $52,200 to $156,600.
  • Upper income makes more than $156,000.

Income Status Depends on Where You Live

The numbers above are general and give people a rough idea of their income class. It might surprise you to know that the numbers vary depending on where you live—the state and city will produce a more accurate level. GoBankingRates offers a state-by-state list of the three income levels.

Because of the difference in financial status among states, it means that what is considered middle class in one state is not necessarily middle class in another. If you are not middle class in one state, you could move to another one and become middle class there. The state with the lowest income level to be considered middle class, according to GoBankingRates, is Mississippi, where you only need to make $34,818 to be middle class. The state with the highest entry level into the middle class is Maryland, where you will need to make $60,487.

The same two states with the lowest and highest entry levels into the middle class also have the lowest and highest entry levels into the upper-class ranks. Mississippi only requires a family of two to earn $103,934 to enter the upper class, and Maryland requires them to earn $180,558.

You can break this number down more accurately according to your closest city. PewResearch has an income calculator that helps you determine the numbers by the nearest major city.

Your Age and Race May Have Affected Your Status

During the pandemic, some groups were affected more than others with regard to their economic status. For example, people without a college degree, PewResearch reports, suffered the most in terms of loss of income. Others that showed a gain—but are most likely to remain in the lower class—include older Americans and blacks.

The Middle Class Is Shrinking

According to Fortune, there are now fewer people that are considered middle class than there were before COVID-19. In 1971, for example, about 61 percent of people were in the middle class in America. By 2021, only about 50 percent of Americans were in the middle class.

The pandemic helped reduce the number of people in the middle class. Many people in the middle class temporarily lost their jobs and income, but some fortunates also went from middle class to upper class.

One problem that may yet change the status of a lot of people is inflation. Fortune reports that many Americans’ income is not keeping up with inflation.

An important thing to know about who is middle class, who is upper class, and who is not, is that people can learn to be happy with what they have. Trying to always keep up with the Joneses makes for dissatisfaction with life—and often leads to unnecessary debt. If someone can increase their net worth and better themselves without ceasing to show a caring spirit for others at the same time—then they should go after it.

America is still the country of opportunity—allowing people to pursue happiness. It also must be remembered that it takes more than just money to be happy.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.

Mike Valles
Mike Valles has been a freelance writer for many years and focuses on personal finance articles. He writes articles and blog posts for companies and lenders of all sizes and seeks to provide quality information that is up-to-date and easy to understand.
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