Understanding where you fall in the American economic class system isn’t as simple as pulling out a calculator or looking at a pay stub. Various forces shape individuals’ economic classes and their views on where they rank among other Americans.
Read on to find out more about how Americans view themselves economically and the ever-changing definition of the middle class.
How Americans Identify Their Social Classes
Among Americans, 73% say they belong to the middle or working class, according to an April 2022 survey from Gallup.
Additionally, 14% identify themselves as upper-middle class and 2% categorize themselves as upper class. In determining their social classes, people often don’t think only about income, experts say, but about other factors like education, location and family history.
When it comes to defining the middle class, says Jeffery M. Jones, senior editor at Gallup, “It’s more of a feeling. It’s about economic security, being able to afford what you need but then also maybe a bit beyond the basics. Maybe vacations, something extra recreational, a third car, money to do things beyond what you need to live.”
Economic Trends May Impact How People View Their Class Rankings
Recent economic trends such as high rates of inflation, waves of employee layoffs, fears of an impending recession and other ripple effects from COVID-19 have impacted the financial health of households and businesses.
After a year with the highest inflation rates since 1982, declining stock market values and steadily rising interest rates, 50% of Americans say they are “financially worse off” than the previous year, according to a January 2023 Gallup poll.
Since Gallup introduced the poll in 1976, half or more Americans have reported being worse off only twice — in 2008 and 2009.
Further, 61% of Americans say recent price increases have caused financial hardship for their households, up from 55% in November 2022, according to an April 2023 Gallup poll.
Time will tell how the past year’s events impact the way Americans view their economic class rankings.
Middle-Class Trends Over the Last 50 Years
In general, much of today’s political rhetoric focuses on the challenges facing the middle class. Although household incomes have risen over the past 50 years or so, it took more than 15 years for them to regain their 2000-level incomes and recover from the short-lived 2001 recession and longer Great Recession, says Richard Fry, senior researcher for the Pew Research Center.
“The 15-year period of stagnation was an episode of unprecedented duration in the past five decades,” he says.
According to Fry, meager income gains likely have contributed to feelings of frustration and downward mobility. And while most American households are doing better than they were 50 years ago, the gains have not been equal, he says.
“Everybody’s better off, but it’s particularly the well-off who are better off,” he says.
Breaking Down the Middle-Class Class by Income
One way some researchers divide individuals into economic classes is by looking at their incomes. From that data, they split earners into different classes: poor, lower-middle class, middle class, upper-middle class and wealthy.
The income cutoffs that divide those income ranges can change from year to year and among methodologies, but here’s a sense of where they stand, according to recent data.
The Pew Research Center defines middle-income Americans as those whose annual household incomes are two-thirds to double the national median (adjusted for local cost of living and household size).
In the second quarter of 2023, the median weekly earnings for full-time American workers was $1,100, according to the U.S. Bureau of Labor Statistics. That puts the median annual income at about $57,200.
|Lower income||Middle income||Upper income|
|2023 Middle-Class Salary||$38,133||$57,200||$114,400|
According to the Pew Research Center’s guidelines (two-thirds to double the national media), middle-income Americans would thus have annual incomes between $38,133 and $114,400 in 2023, before adjusting for local cost of living and household size.
[Read: How to Calculate Your Net Worth.]
Am I Middle Class?
How a person perceives their own social class extends beyond what a W-2 income form claims they earn, experts say.
You can look at income, education, marital status, location, family history, gut instinct and a host of other factors to find out where you fall. But the bottom line is this: Finding the answer is more complex than just looking at a number.
Where you fall in the American economic class system also may not stay consistent throughout your life — or even from year to year.
For example, a law student may earn a modest graduate student stipend of $20,000 per year, which would put them in the low-income class. But education and future earnings will most likely catapult their income and class placement to a higher level down the road.
“People really need to understand that whatever’s happening (with their class rank) today is part of a trajectory, part of their life,” says Stephen Rose, nonresident fellow at the Urban Institute and research professor at George Washington Institute of Public Policy.
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Where Do I Fall in the American Economic Class System? originally appeared on usnews.com
Update 07/31/23: This story was previously published at an earlier date and has been updated with new information.