Middle Class a Matter of Income, Attitude

9:53 AM, Apr 14, 2013   |    comments
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Dan Horn, The Cincinnati Enquirer

Everybody loves the middle class.

President Obama mentioned it a half-dozen times in his State of the Union address this year, and House Speaker John Boehner recently told Obama to "stand up for middle-class jobs."

Pundits cheer the middle class. Politicians praise its virtues. Google says it has been called the "backbone of the country" at least 2.3 million times.

From gridlocked Washington to cities and town everywhere, the middle class is far and away America's favorite socioeconomic group.

Yet no one can agree on what, exactly, the middle class is.

Economists and sociologists say that's a big deal. Decisions are made, laws are written and elections are won or lost based on people's beliefs about the middle class and what it means to the country.

A nation that so values the middle class, they say, really should be better at defining it.

"It's a strange thing," said Jim Brock, a Miami University economist. "There's a large difference between what our perception of a middle-class lifestyle is and what the statistics tell us the middle is."

Strictly speaking, the median, or middle, household income in the United States today is $50,054. That's easy. The hard part is figuring out how far above or below the middle someone's income can go and still be considered middle class.

Plenty of smart people have taken a stab at that question. In the past few years, the "middle class" income range has been described as between $32,900 and $64,000 a year (a Pew Charitable Trusts study), between $50,800 and $122,000 (a U.S. Department of Commerce study), and between $20,600 and $102,000 (the U.S. Census Bureau's middle 60% of incomes).

Psychologist Ken Eisold, a contributor to Psychology Today, said, though, that the way people describe their social status has more to do with what's going on in their heads than their wallets.

"It's really more about identity," he said. Even families making six figures are "much more comfortable calling themselves 'upper middle class.' They might have a lot of money, but they don't want to feel different."

When Pew pollsters gave people a choice between lower, middle or upper class, 17% described themselves as upper class and 32% as lower class. When Gallup gave people more options, such as "working class" and "upper middle class," only 2% said they were upper class and 10% chose lower.

"Saying 'We're a middle-class family' has more than financial connotations to it," said Julie Heath, director of the University of Cincinnati's Economics Center. "It has a salt-of-the-earth feel to it. That's the bedrock."

Income matters, but so does 'attitude'

A 2008 Pew poll found that 40% of Americans with incomes below $20,000 - roughly equivalent to the poverty line - described themselves as middle class. And about one-third with incomes above $150,000 said they're middle class, too.

Given a choice, people tend to lean to the middle. Donna Palmatary and Katherine Stillwell are examples.

Palmatary, 49, lives with her husband in suburban Cincinnati. He's an engineer and she works part time from home. With a daughter in college, she said, it takes $75,000 to $125,000 for a family to live comfortably.

Stillwell, 60, lives alone in Dayton, Ky., and relies on help from her grown children to get by. She is disabled after years of work as a truck driver and lives on a fraction of the income she once did.

Both women say they're part of the middle class.

"I always considered myself middle class, not just because of finances but because of the way we lived," Stillwell said. "I still do. It's mostly attitude."

Lifestyle also matters to Palmatary. She said frugality, a focus on family and a desire to see your children do better than you all are middle-class traits.

Income matters, too, she said. Middle-class families must earn enough to maintain a house, own a car and provide a comfortable life for children.

"You have to work for what you have," Palmatary said. "I don't think anybody in the middle class would call themselves wealthy. That's Donald Trump or Martha Stewart or Warren Buffett."

So if Trump is at the top of the heap, where is the middle?

Economists often start with the middle 20% of the country - people earning between $39,000 and $63,000 a year - and work their way out. Some then stretch the definition to include the middle 60%, which has an income range of $20,600 to $102,000. Because that's a wide range, other factors come into play: home ownership, savings, a college education.

None of those calculations, however, generates a concrete description of what is - or is not - a middle-class household.

"There really isn't a definition," Heath said.

Work, family changes test the middle class

The popular vision of the middle class is rooted in the 1950s, when post-war America gave birth to a generation that found solid jobs, bought houses in the suburbs and took modest family vacations.

It's still a powerful, iconic image. But whatever the middle class is today, Heath said, it's being tested by profound changes.

Few workers today expect to finish their careers where they start. Layoffs and buyouts are now part of corporate culture. Family life is complicated by more single and working parents.

At first blush, things don't look so bad. 84% of Americans have higher family incomes than their parents did, according to Pew. Dig deeper, though, and the picture gets murky.

Many of those families have higher incomes only because both parents are now working, and Pew found that about one-third of people born into its definition of the middle class fall out of it by adulthood.

Erin Currier, director of the Pew Economic Mobility Project, said stability is one of the biggest threats to the middle class today.

"Income can't be the only metric for measuring if someone is OK," she said. "Are we able to prepare for retirement? Do we have emergency savings if the car breaks down?"

Insecurity plays into the national conversation about the middle class and how it should be defined. Politicians seize on it in their rhetoric, if not always in their policies.

Obama, for example, made hay by portraying Romney as an out-of-touch rich guy. Romney joined in later in the campaign, repeatedly mentioning the middle class in speeches, as did his fellow Republicans.

In one speech last year, according to Slate.com, U.S. Sen. Marco Rubio of Florida used the term "middle class" at least 35 times.

"People, by and large, like to consider themselves middle class," said Gene Beaupre, a Xavier University political scientist. "So if you're trying to deliver a message and reach as broad an audience as possible, that's the term of art."

He said that's likely to continue because, whatever else it may be, the middle class remains popular.

"It's a feeling, a touchstone. It defies numbers," Beaupre said. "It's a mind-set that says, 'I'm part of the working fabric of American culture.' "

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