We have all heard the grim news. The middle class is shrinking. Income inequality is rising. It raises the question: What does it really mean to be middle class in 2018? Well, that depends on who you ask. And also where you live.
According to an updated income calculator created by the Pew Research Center, a before-tax salary of $37,106 for a three-person household is considered middle class in Jackson, Tenn., the lowest threshold in the country.
But in the San Jose-Sunnyvale-Santa Clara metro area of California, it takes about $20,000 more; households of that size must earn at least $57,443 a year to attain middle-income status, the most money required of any area in the United States.
“Our determination of whether or not you’re in the middle class is based on income alone,” said Rakesh Kochhar, a senior researcher at Pew.
[Read how the recovery threw the middle-class dream under a Benz.]
Pew defines the middle class as a wide range that is two-thirds to double the median household income in the United States. Those numbers are then adjusted to account for location and household size. By this standard, about half of American adults live in middle-class households.
That is why the calculator, which is based on government data from 2016, says a household of three in the New York-Newark-Jersey City metro area that earns between $55,138 and $165,413, before taxes, is considered middle income. A household earning more than $165,413 is upper income and anything below $55,183 is lower income.
“There’s nothing magical about twice the median,” Elliot B. Weininger, a sociology professor at SUNY Brockport, said. “There’s no consensus about this.”
Although income typically correlates with education, job security, the ability to own a home and saving money, it is only one of many measures that has been used to define class. That is one of the reasons research by Pew and others often refers to “middle income” instead of “middle class.”
“I think intuitively in people’s minds, when people use class terminology it doesn’t just refer to purchasing power,” Dr. Weininger said. It often relates to the type of work someone does, he added. “They definitely don’t imagine blue-collar work.”
When Pew asked Americans in 2015 what was needed to be considered middle class, they said it was necessary to have a secure job and the ability to save money.
There was less agreement as to whether it was important to own a home or take vacations. And in 2015 a college education was seen as less relevant to middle-class status than it was in 2012.
After the Great Recession, there was a big increase in the number of people who identified as being lower class, said Tom W. Smith of NORC at the University of Chicago, a public opinion research center.
“This measure is at 9 percent, the highest ever,” said Dr. Smith, who runs the organization’s Center for the Study of Politics and Society.
That may have to do with political rhetoric, he added, in particular Donald J. Trump’s slogan, “Make America Great Again,” which suggests that typical Americans are not well off.
[Read more: The Great Recession knocked them down. Only some got up again.]
The size of the nation’s middle class has remained fairly stable since 2011, according to Pew. Even so, the income gap between upper-income households and middle- and lower-income households has widened, and the median wealth of middle-income Americans fell by 28 percent from 2001 to 2013, Pew reported.
Painting an even darker picture, in 2016, the most recent data available, the median income of middle-class households was about the same as in 2000, Pew said, in part because of the Great Recession and an earlier recession in 2001. In addition, “the wealth gaps between upper-income families and lower- and middle-income families in 2016 were at the highest levels recorded,” Pew said.
Wealth, which is not part of the Pew income calculator, is yet another measure of class.
“If you really want to capture someone’s class position you need multiple measures of resources at their disposal,” said Daniel Laurison, an assistant professor of sociology at Swarthmore College who has studied class and social inequality.
It is natural to be curious about one’s social class, in part because “we use these class terms in the U.S. all the time,” he added. “And there’s no agreed-upon term or definition of those terms in any arena.”
When Pew introduced its income calculator in 2015, “it steadily drew traffic,” Mr. Kochhar said, receiving 4.6 million visitors since its debut. “That is one reason we updated the calculator, and the background research, using 2016 income data.”
[Crisis and Consequences: A decade ago this week, Wall Street imploded. Read our special coverage.]
Whether you are living paycheck-to-paycheck, or saving 20 percent of your income, it is tempting to wonder how your situation compares with that of your peers. Especially because money tends to be a taboo topic.
“It gives you some sense of where you are relative to other people,” Dr. Laurison said of the income calculator. “I think that is useful.”
