This undefined group of citizens seems to be a favorite of politicians on both ends of the political spectrum. Reagan and Bush cut their taxes. Bill Clinton and Obama did too (or so they claim).
Hillary Clinton has proposed cutting their taxes as has every Republican candidate. Even the socialist Bernie Sanders has said he’d lower taxes on the middle class (by raising taxes on the “rich”, naturally).
What they rarely ever explain, though, is who exactly they consider to be “middle class.” Most people use the term as a means of emotion-based self-categorization (“I don’t feel rich or poor so I must be middle class”). Ask the janitor sweeping your company’s floors and he’ll likely tell you he’s middle class. Query the vice-president of marketing and he will give you the same answer. The single girls down in accounts payable and the married attorneys in the legal department will give the same response.
In the land of equal opportunity, it appears, we’re all middle class.
But for the term is to be of any use it has to be clearly defined. When the presidential candidates offer to give money back to the “working poor” while promising to “soak the rich” how do we know they aren’t talking about us?
The reason the question is so difficult to answer is there is no consensus standard on what constitutes middle class.
Using the strict definition of “middle” we could use the median household income; in 2014, that was $53,657. If your family brings in $53,657 a year then let me be the first to congratulate you— you, my friend, are indisputably the middle of the middle class (at least as measured by income).
But how far above and below do we stretch the boundaries?
The Pew Research Center define middle-income households as those whose annual household income is two-thirds to double the U.S. median household income after incomes have been adjusted for household size. According to Pew, “This amounts to about $42,000 to $126,000 annually, in 2014 dollars and for a household of three. Lower-income households have incomes less than two-thirds of the median, while upper-income households have incomes that are more than double the median.”
Oddly, this metric seems both too broad and too narrow. If your family earns $42,000 a year and you triple your income you’d still be middle class. Yet if you earn $126,000 a year and earn an additional $1,000 you are suddenly in the bracket with the wealthy. That’s a problem with any numbers based bracket, of course, since there has to be a cutoff somewhere.
Yet doesn’t that show the terms like “working poor,” “middle class,” and “rich” are too broad to be useful in our fluid and varied economy?
In East Texas, where I was raised, earning $126,000 a year will put you in the upper stratus of society. With the same income in San Francisco, however, you would be lucky to meet the mortgage requirements to buy a home. If the determination of whether you are rich or poor depends on your zip code then income shouldn’t be the only standard used.
(Perhaps rather than income levels we should consider levels of consumption. One measure of consumption used by Notre Dame Professor James X. Sullivan that includes spending on food, transportation, entertainment, housing and other items and excludes health care expenses and education (which Sullivan says might be considered investments) defines the middle class as those in the middle fifth of spending: between $38,200 and $49,900.)
Since we live in a country where the value of an income is a relative matter, why do politicians speak about it in such absolute terms? Because it let’s them make claims in which voters assume they aren’t talking about them personally (“They won’t be raising my taxes, I’m middle class.).
Don’t let them get away with that obfuscation. Never let a politician use the term “middle class” without finding out what they mean (income, consumption, etc.) and what number they have in mind. Otherwise, you may be surprised at tax time to find that you aren’t middle class after all.
Note: Pew has a calculator that let’s you determine whether you are upper, middle, or lower class based on your household income and number of people in your household.