What Is Considered Middle Class?

The nature of middle-class households and values are changing, but in the broadest sense, the middle class is the economic group between the rich and the poor. This designation varies from state to state and even city to city.

The definition of the middle class continues to evolve, but income distribution has played a constant role in determining what constitutes this financial demographic throughout history. According to the Pew Research Center, the income of middle-class households is two-thirds to double the country’s median household income.

The middle class once made up the majority of people in the US, but economic shifts continue to affect this classification. Consider the following waves of the American middle class:

• The bourgeoisie: After the Industrial Revolution, the middle class got labeled the bourgeoisie, the class of people who worked to live but had disposable income to spend on materialistic goods.
• Post-war: These ideas extended into post-war America, where the 1950s saw an increase in middle-income households, with men returning from war buying homes, reentering the workforce, and starting families. These US households had savings accounts, class status, and money to spend on home goods, cars, and other products that defined the economic boom of much of the late twentieth century.
• Suburbia: The suburban sprawl and creation of areas like Levittown, New York, helped forward the middle class. At this time, the middle class was both a financial and a social class. Middle-class families often shared values such as being able to pave their professional path, afford college educations for children, and build families in suburban neighborhoods filled with like-minded individuals.
• Shifting classifications: Today, rising health care, inflation prices, and more significant economic inequalities polarize the financial classifications. While annual household incomes still define the middle class that approximates this median, America’s middle class is also shrinking as homes get radically more expensive (pricing many millennials out of homeownership), and the country’s top earners continue to make more money faster than those closer to the bottom.

Annual household income is a major determining factor of class status. There are three main categories of economic strata, which may also comprise subcategories:

1. 1. Lower class: The lower class represents those who are financially unstable or live at or below the poverty line. Racial discrimination and the criminal justice system play outsize roles in determining who is a member of the lower class.
2. 2. Middle class: The middle class sits beneath the upper class and comprises a few groups. The upper-middle class enjoys more financial privileges and will make above the country’s median income. The working class is the lower-middle class, the group that has enough to get by but labors to stay afloat and may live paycheck to paycheck.
3. 3. Upper class: The upper class holds the most wealth; at the tip-top is the 1%, the highest-earning group of Americans, owning a third of the nation’s wealth. The upper class comprises business leaders and those with extreme generational wealth and net worth. Recent years have seen politicians and activists trying to tax this class more strongly.

Many factors influence economic classes, including:

1. 1. Education level: Economists can often predict one’s income based on their education level, with those who have received higher education (college, graduate school) making more money than those who did not complete high school.
2. 2. Family size: Household size will dictate how much money the home’s workers need to generate to pay for food and utilities in the immediate sense and vacations and college education in the long term.
3. 3. Gender: Gender further determines economic classes as there is still a pay gap between men and women across various industries, from business to entertainment.
4. 4. Income levels: Income gains can help people jump economic classes, give them more buying power, and lead to more comfortable lives.
5. 5. Location: The average income varies from state to state, and some areas have a higher cost of living than others. For example, metropolitan areas in New York will be more expensive than rural ones in Indiana. Median middle-class income may get you further outside of cities.
6. 6. Race: Race is also a significant factor in determining wealth. In capitalist America, because of its long history of slavery and racial discrimination, white people hold more wealth than any other racial group.

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