What Is Considered Middle Class Income?

Is Your Household Part of It?

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Middle-class income is between 67 percent and 200 percent of the average median income. In 2016, middle-income households earned between $45,200 and $135,600 a year. That's according to the Pew Research Center. There's no official U.S. government definition of middle-class income.

The average median income is exactly in the middle of the range of incomes. Half of Americans make more and the other half make less.

The U.S. Census Bureau reported that the average median income was $61,372 per household in 2017. A household is any group of people who live together. 

Using the Pew Research percentages, households making less than $45,200 are low income. Households earning at least $135,600 are high income. 

Current Middle-Class Income Range

How many people in the United States are middle class?  The Census Bureau provides part of the answer and the Pew Research Center provides the other part. You must look at both to get the answer.

The Census estimated there were 127.6 million U.S. households in 2017. In the table below, they are divided into six income groups. The first two columns show the number and percent of households in each income range.

The Census ranges don't coincide exactly with the Pew definitions, but the table gives you a general idea. Pew defines 2016 middle income as between $45,200 and $135,600 a year.

Update that to 2017 dollars and the range becomes $46,153 to $138,460.

The Census ranges that are closest are between $45,000 and $139,999 a year. There are 57.7 million household in that range or 45 percent of the total.  

For the sake of comparison, there are some other income levels worth taking a look at.

The federal poverty level is $21,330 for an average household of three people. That's roughly the 15 percent of households that earn less than $20,000 a year.

The Census Bureau considers those earning $150,000 or more to be high income. That's 15 percent of total households. Both President Obama and President Trump said high-income households earn $200,000 or more and used that minimum for their high-income tax rates. These households paid more in Obamacare taxes. They pay a 33 percent tax rate under Trump's tax plan.

Household Income RangeMillions of HouseholdsPercent of TotalComments
Less than $20,000  19.7  15%Federal poverty level of $21,330
$20,000 - $44,999  28.7  23%Low income
$45,000 - $139,999  57.7  45%Middle class is from $46,153 to $138,460
$140,000 - $149,999    2.6    2%Upper middle class
$150,000 - $199,999    9.0    7%High income
$200,000+    9.9    8%Obama, Trump high income
TOTAL127.5100% 

 

How the Pew Research Center Measures Middle-Class Income

How does Pew determine middle class? It starts with the U.S. Census data on median income per household. It defines a household as any group of people living together. Most reports on income also use this measurement.

Pew then created different middle-class standards for each "metropolitan statistical area." These are Census Bureau areas that correspond to cities.

The Pew reports use 229 of them that add up to 76 percent of the nation's population.

Why does Pew break the national income averages down by city? This is because the cost of living varies so much throughout the nation. 

For example, housing costs in San Francisco are very high. If you live there, a $250,000 household income isn’t upper class. About $65,000 goes toward taxes alone. It costs $1.5 million to get a house in a decent neighborhood. As a result, a middle-class income in San Francisco is much higher than the national median.

The Middle Class

You were in a middle-class household if annual 2017 household income was between $46,153 and $138,460. However, keep in mind that is a national average. It is important to look at both national and local income levels before determining if you are middle class.

This CNN middle-class income calculator will tell you how you rank in your city. It's based on the Pew Research Center's analysis. The Center also developed its own calculator.

According to a Pew survey, people think they are poorer than they are. Forty percent said they were lower middle-class or poor. Only 32 percent actually are. Forty-four percent of Americans thought they were middle class. Only 16 percent admit to being rich, whereas 26 percent are. 

The Pew survey said Americans feel less affluent than they did before the Great Recession. In 2008, more than half, specifically 53 percent, said they were middle class. Only 25 percent said they were poor. Reports of living standards in other parts of the world also make Americans feel less rich in comparison. Europeans enjoy six-week vacations. Canadians have free health care. Swedes receive paid time off to care for newborns.

Americans have had fewer raises than in these other countries. In fact, U.S. income inequality has gotten worse since the 2008 financial crisis. Most of the income gains since 2000 have gone to the upper class.

Other Definitions of Middle-Class Income

Robert Reich is a professor of Public Policy at the University of California-Berkeley. He is also the former Secretary of Labor. He has suggested that the middle class be defined as households making 50 percent higher and lower than the median. He suggests that the middle-class should fall within the $25,000 to $75,000 income range. About 50 million families earn within this range.

Aaron Pacitti, an associate professor of economics at Siena College in Loudonville, N.Y., had a different calculation. He said the middle of the middle class earns between $39,764 and $64,582 a year.  

President Obama said that the middle class is comprised of individuals who make less than $200,000 and couples who make less than $250,000.

In 2013, Congress quoted its own definition of a middle-class income during the fiscal cliff compromise. It said the middle class is anyone making less $400,000 or couples making less than $450,000. 

The Census provides median income data for individuals and families as well as households. The income per capita is the U.S. median income divided by the U.S. population. In 2017, it was $31,786. The mean income per capita was $48,150. 

Real median household income was $61,372. At first glance, it was a new record. But the Census warns that it modified its questions. As a result, the household income was about the same as in 2007 and 1999. 

Should We Even Use Income?

Many experts warn that income is not the best way to determine if you are in the middle class. For example, many people don't have a high income but they still can afford a high standard of living. These include retirees and others who live off of their wealth. To define a class based on wealth, the middle class is the middle three-fifths of the wealth spectrum. Those with zero wealth or less are in debt. Those in the highest fifth are wealthy. New York University Professor Edward Wolff developed the wealth definition. His research determined that those whose net worth is more than $400,000 are wealthy. 

What about those who don't earn a high income but spend a lot? They appear to have a middle-class way of life. They may be living off savings, alimony, or government payments that aren't measured as income. The consumption measure defines middle class as those who spend between $38,200 and $49,900 a year. Professor James Sullivan from the University of Notre Dame proposed a consumption-based measure. He included housing, transportation, and entertainment.

Some experts define the middle class by a set of values rather than financial measures. There’s a certain lifestyle that “feels” middle class to many. It includes the ability to buy a home and at least one car. The middle class should be able to afford college for their children and vacations. They can pay for a decent retirement and health care expenses

The Good Old Days

Many members of the middle class are nostalgic for the good old days of the 1950s and 1960s. In reality, the middle class was worse off then than it is today. On average, their homes were 1,200 square feet. They had one car instead of two. There was one television and it was black and white. There was one phone. People still felt pressure to keep up with the Joneses, but everyone's standard of living then was lower than it is today. 

Source

"Table HINC-01, 2018 Household Income Survey, " U.S. Census.