Who Is Middle Class?
The American middle class, though often mentioned in political stump speeches and policy proposals, is difficult to define. President Obama pushed for “middle-class economics” during his 2015 State of the Union, but what exactly is meant by middle class? An insightful new issue of the American Enterprise Institute’s Political Report offers a glimpse into who Americans view as the middle class, and what is necessary for a middle-class economics agenda.
AEI’s Political Report is authored by senior fellow Karlyn Bowman, one of America’s leading experts on public opinion polls. Her thorough examination of what it means to be middle class cuts through the rhetoric often used by pundits.
Americans think that a family of four needs a total annual income of $70,000 to lead a middle-class lifestyle. This is nearly three times the federal poverty line for a family of four ($24,250), and a third higher than the median household income ($52,000).
Evoking the middle class is politically powerful because 88 percent of Americans identify as either working class or middle class—a rate that has held steady since the early 1970s. Only 8 percent say they are lower class, and 4 percent identify as upper class.
Education plays a role in who Americans deem to be middle class. Among those with a high school degree or less, 48 percent view themselves as middle class, upper-middle class, or upper class. This percent increases to 75 percent for college graduates and 76 percent for those with post-graduate degrees. Only two percent of college graduates view themselves as lower class.
“Having long-term financial security by staying out of debt, balancing spending with income, and saving for the future” was chosen as the best indicator of whether a person falls into the middle class. This was a slightly more popular response than having the money to buy traditional middle-class staples such as a home, car, or education.
Though 86 percent of people say a secure job is necessary to be middle class, only 28 percent believe the same about owning stocks or other investments. Since financial security is such as high priority for the middle class, it is puzzling that so few place value in investing. Perhaps people do not realize that they own stocks through employer pension or retirement plans. If middle-class financial security is going to continue into retirement years, much higher saving and investment rates are necessary.
When polled, 36 percent of Americans think President Obama is making things better for the middle class. While this may seem low, it is much higher than the 8 percent of people who say the same about Congress.
Only 23 percent of people agree with the statement that life for middle-class Americans has got better—and 71 percent say it has got worse. This does not bode well for our elected leaders. Americans believe the middle class is in poor shape, and they are placing the heaviest blame on politicians. Even major financial institutions and CEOs of large corporations are viewed as having a better effect on the middle class than is Congress.
The middle class is difficult to define, but the concerns shared by its members echo those of the country at large. Bowman's work shows that a large middle class is still alive and well in the United States, but its members are increasingly disillusioned with the government that says it is trying to help them. Let us hope that Congress takes note.
Source: American Enterprise Institute.
Jared Meyer is a fellow at Economics21 at the Manhattan Institute for Policy Research. You can follow him on Twitter @JaredMeyer10.
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