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Are You in the Middle-Class?

Are You in the Middle-Class?

| October 18, 2018
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Pew Research recently came out with its analysis of the middle-class in the U.S. Middle-income households are defined as those with an income that is two-thirds to double the U.S. median household income. In light of the political and media discussions about the shrinking middle-class, some of the results from the study may be surprising. The key findings include:

  • The middle-class is not shrinking. The share of the adults who live in middle-income households has remained relatively stable since 2011, which marks a shift from a decades-long downward trend. 
  • But middle-class income hasn't changed. The median income of middle-class households in 2016 was about the same as in 2000, while higher income households are doing better comparatively causing the income disparity to widen.
  • Cost of living means the middle-class varies widely. After adjusting for cost-of-living in each area, middle-income households had incomes ranging from about $45,200 to $135,600 in 2016.
  • New York metropolitan area results vary somewhat. In this area, there are slightly more higher- and lower-income households and slightly less middle-income households compared to the rest of the U.S.
  • The racial gap still exists. Among lower-income families, the gap between white households and their black and Hispanic counterparts shrank by about half from 2007 to 2016. But among middle-class families, it increased.

The question this report doesn't answer is how people view their own income level and class. Although New York has a high cost of living which is taken into account by Pew, many people here still think of themselves as middle-income even though they wouldn't fall into the definition. Despite higher salaries, it can still be a struggle to save money for a house, college for the kids, or retirement. A big problem is that all over the US, more people than ever are finding themselves in serious debt and can't seem to find a way out, which is the topic of our next post.

Are you in the middle-class? If you want to look at where your income level fits in, check out the Pew interactive Income Calculator which lets you plug in your demographic information to find out how you compare to others in your area.

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