Middle
class is more
than income--it's a value system that recognizes the necessity of sacrifice,
frugality, capital and long-term planning. If high-income households squander all
the income on eating out, lavish vacations, matching luxury-brand autos, etc.,
they aren't middle class: their values do not support investing in their
children's future, their own retirement (so they won't be a burden to their
adult kids) and on building wealth that won't vanish when the current asset
bubble bursts.
By my calculation (admittedly coarse, given the huge range of
living expenses from lower-cost regions to sky-high locales on the Left and
Right Coasts), around $100,000 for state/corporate employed adults (i.e. jobs
that provide healthcare and retirement/401K benefits) and $130,000+ for
self-employed people (who have to pay their own healthcare and retirement
costs) is more or less the minimum required to fund the qualities described
above.
It's remarkably easy to earn this income and have very little to
show for it by year-end, so this is (at least in many areas) bare-bones.
As you can in this chart of nominal (not adjusted for inflation)
median household income, this is roughly double median household income of
$52,000 annually.
The Pew report places households with incomes from from $42,000
to $126,000 as middle class. Judging by my estimates, it would very difficult
to meet these qualitative standards on $52,000 household income unless housing
was nearly free (for example, the family house was owned free and clear and
property taxes were low).
In many Left and Right Coast cities, $52,000 is essentially
poverty level. Even in lower-cost areas, it would take at least 50% above
median household income to fund a middle class life.
Meanwhile, the Federal Reserve's policy of inflating bubbles in
assets that were once stable places to build lasting equity (for example,
housing) has devastated middle class wealth. Adjusted for inflation (which is
likely under-stated, since big-ticket items such as college tuition and
healthcare are under-represented in official inflation), household wealth has gone
nowhere for over 20 years.
