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Who is In the Middle Class?

Politicians Not Really Sure

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Politicians woo the middle class.

Politicians woo the middle class.

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What do politician who do not promise to protect the middle class do during the day? Look for a job. Yes, the middle class has long been the darling of politicians. However, nowhere does the U.S. government actually define "the middle class."

Frankly, the determination of who occupies the middle class is subjective and can cover lots of people. To some members of Congress, for example, the middle class seems to be everybody who makes less than they do, but too much to qualify for Food Stamps. (Also See: Salaries and Benefits in the U.S. Congress)

In fact, according to the November 2012 Congressional Research Service (CRS) report, The Distribution of Household Income and the Middle Class, along with income levels, "middle class" can simply be a state of mind.

"Most people likely have decided views as to whether they are middle class, and those who refer to the middle class have a rough idea of whom they have in mind," the report continues. "How closely these definitions correspond is another matter."

Money and Class

So, the "middle class" could be a group of people who share a common point of view regardless of their income, or a group of people with similar incomes, but differing social and political beliefs. But when most Americans talk about social classes - like the middle class - they are really talking money, not philosophy.

It's hard to define the middle class, unless we can define the "upper class.' Fortunately, that's a bit easier. In the great "fiscal cliff" debate of 2012, President Obama proposed increasing the income tax paid by who he declared "the rich" -- households with incomes above $250,000. According to the U.S. Census Bureau, only 2.3% of the 121,084,000 households with income in 2011 made $250,000 or more. However, as the CRS report notes, Census data also shows that most income in the U.S. is concentrated among the high-income households. In 2011, for example, households in the top 20% of income got 51.5% of all income in the United States.

Politics and ideology aside, the CRS report suggests that membership in the "middle class" depends largely on two strictly financial criteria: absolute income and relative income.

Absolute Income

Absolute income is an individual's or family's total disposable income from all sources after paying taxes, but according to the CRS, it only partly determines who belongs to the middle class. In creating its report, CRS compared income data from the Census Bureau's 2011 Current Population Survey Annual Social and Economic Supplement with the results of surveys that asked people to identify their perceived social class. The results indicated that, based in incomes in 2011, "middle class" incomes ranged from $38,521 to $101,583 or more. Just over 50% of all U.S. households with income in 2011 reported incomes in this range. The nationwide median income in 2011 was $50,054.

In addition, CRS found that some households with incomes over $200,000 self-identified themselves as being "middle class" households.

Note: The Census Bureau considers absolute income to include salary or wages, interest, dividends, pensions, child support, and government benefits like Social Security, unemployment compensation and veterans' benefit payments. Means-tested federal benefits, like Food Stamps and housing assistance, and employer-provided fringe benefits, and capital gains are not included.
Also See: Top Federal Benefit and Assistance Programs
Relative Income

Relative income is basically how much money an individual or family makes compared to others. According to the CRS, relative income determines our perceived ability to "keep up with the Joneses and stay ahead of the Smiths." In other words, relative income determines how "well off" people feel, and thus, where they fit in the social class ladder.

"Specifically, having incomes far above those at the lower end of the income distribution appears to be a source of satisfaction to the middle class," states the CRS report, "but when those at the upper end of the distribution fare much better than they do, it can be a source of consternation to the middle class."

According to the CRS, this outlook based on relative income might partly explain the disgust expressed by many people who consider themselves to be "middle class" for the salaries of top executives "at some of the nation's largest corporations generally and firms in the financial services industry specifically."

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