What is the Middle Class and is it in Trouble?

copenhagen2
Middle Class in Copenhagen?

Ok, sooo as it turns out everyone thinks they know what the middle class is, and everyone defines it differently. 90% of Americans say they are in the middle class, and very few want to be filthy rich or dirt poor. We all just want to be the same and no one wants to be special. This seems crazy to me in our ego driven society of Youtubers, instagramers, twitter famous people, America’s Got Talent watching, country of citizens. So, you mean to tell me we are moving toward communism, because we all want to be equal and just middle class.

I’m not sure about you, but I feel like I am living an upper middle class life because of great money management, budgeting, and frugal living. I do rich things all the time, such as not looking at the prices when I go on a date with the wife to Applebee’s (using gift cards), world traveling (when there is a great sale), I have my own private lake fully stocked, my dog is so pure breed he has papers (and he was free), I wear mostly Nike clothing and shoes (bought by my school with school logos on them), my basketball hoop in the driveway is the $1,000 Goalrilla ( I think of it as an investment for my children), and my wife and son are international models (it was a diaper box, but it counts). With our double salary as teachers we are making six figures together, and we save or put into our mortgage 65% of our pay every month. We are rich people!

So, why do I feel lower middle class some days? Well I drive cars that are 5 and 9 years old and valued at about $12,000 together. My house is 2,100 sq. ft. in Texas for a family of five. I camp for over half my vacations, and still use budget hotels, using points for the rest. I use coupons from newspaper flyers at A&W for root beer floats, gift cards for Chili’s and any dine in restaurant, and shop around for socks between Wal-Mart and Target. I still pick up any coin that is silver on the ground as a walk around, and only buy donuts when I have collected enough loose change to buy them ($2.25 every 2 weeks on average). Ci-Ci’s Pizza is my kid’s favorite restaurant to eat at, nothing beats the $1 cones at Braum’s between 2:30pm- 4:30pm, and Taco Tuesday is great, followed by kid’s eat free Wednesday at Luby’s. I use the gas buddy app to find gas before I leave the house if I know Costco is closed, and I always wait for a sale at Hobby Lobby for picture frames. I keep my A/C on 80-82 degrees all summer, and 62-64 degrees all winter, and keep it off during the spring and summer.  I try to never pay full price for anything, and that is what allows me to feel lower middle class, but I can afford to be upper middle class because of being frugal.  We joke, based on the country song, that we are, “White Trash with Money.”

Let’s look at what some other people have said on what middle class is to them from the RockstarFinance Forums. (Click to read the whole discussion it’s still going on!)

Aaahhrealmarcus said this on how we label ourselves:

IMO no one wants to think of themselves as “poor,” “lower class,” “impoverished,” etc. I know lots of people who are living paycheck to paycheck, barely scraping by, but most of them would consider themselves “middle class.”

ChiefMomOfficer said this about what is middle class:

I don’t think people really know. That’s how you get people earning hundreds of thousands a year considering themselves middle class. They’re comparing themselves and what they can/cannot afford to people earning millions a year. And people earning $30k a year might feel middle class depending on where they live. Usually when I see middle class defined it’s between $50k-$100k per year for a family (including kids). Enough to have a home, cars, not struggle to put food on the table, and afford some extras, but not enough to have a luxurious lifestyle.

Moneybeagle said this simple explanation I liked:

I’ve always looked at it that if you’re able to survive and fulfill all needs, you’re upper class. If you cannot support your even basic needs, you’re lower class. If you’re in between those two, you’re middle class.

The_Vigilante said this that I loved:

You’ve heard of the “working poor.” Well, the middle class is the “working rich.” Those who can afford a lot of the luxuries in life (vacations, cable packages, A/C, smart phone, car) but have to work to do so. Kind of like how wealth was defined on the Cosby Show: Rich is when your money works for you. When you have to work for your money but you’re comfortable that there will always be food on the table, you’re middle class.

I loved the idea of having a “Working Rich,” because I have met a ton of people making almost twice as much money as me, and they don’t own anything, have bills up to their eyeballs, and are just struggling all the time.  I loved that concept from The_Vigilante.

Teacherinvestor added a great video (at the end) on wealth distribution and wealth inequality in America. he also wrote a blog entry that is well spoken on the subject below for you to read.

https://www.teacherinvestor.com/single-post/Invisible-Working-Poor-Wealth-Inequality-in-America-and-Our-Responsibility

Feature Creature added this to the conversation:

I think it’s psychology at work. Most people look at their communities and see some better off than them and see they’re doing better than others. But that is a selection bias of the sample when determining one’s fit.

I like the percentile idea for defining a middle class, and I just assume the $ based off median household income per the census data, which I believe was $56,500 as of 2015.

Budgetonastick found a great article at “Life and My Finances” on income class and I really enjoy the infographic in the article, so be sure to play with that to see who is the top group and their occupations.  Cool stuff.

http://lifeandmyfinances.com/2017/05/income-class-how-do-you-rank/

TheFrugalGene stated:

I hate to go with the easy answer but it’s not the number. It’s more our behavior that dictates class. I’m middle class, my husband is middle class, we live​ in a quiet middle class neighborhood. We’re in the top percent taken our age into account but all of that is just speculative wealth. I know we can pay off the mortgage, we have a rainy day fund, and we have no debt. And that’s the most money can buy me in terms of happiness.

Sorry to rant off topic but yeah middle class is more a mindset.

I loved the happiness scale and the mindset here from TheFrugalGene.

Sooo, since we are all over the place on the definition of middle class and everyone is a part of the middle class in some way, I have to come to the conclusion that the middle class can’t be in trouble. It’s 90% of Americans including you! The middle class seems to be ever expanding, and some days we feel richer then others, based on our buying power.  I have had my account saying $34 at the end of the month, and I am fine with taking that challenge and spending no money until payday.

We are adaptable people with many job skills that are in need. We help one another when storms threaten our communities or band together to make sure local politics are done right. The middle class is strong, versatile, and I feel if necessary can take care of itself. I’m not worried about wealth gaps, because we control the profits with our purchases. I’m not worried about us being priced out of homes, healthcare, or anything else, because without our money, they can’t profit. We as the middle class just have to be smarter with our purchasing power and we will be fine. We are the place everyone wants to be, in the middle.  I’m a fan of capitalism and laissez-faire economics and I believe if the gap increases too much people will stop spending, and that it will correct itself.  I’m preaching now, but I believe in us and I do think it will all work out over time if we stick together and trust the system that got us here.

 

*Below are some videos that I found interesting.  I haven’t read the book Dream Hoarders yet from the first video, but it is on my to do list after watching this.  I also have a bad habit of watching too many VICE TV videos, so enjoy the attitude filled second video, but it is entertaining.  The last one is the one that Teacherinvestor recommended (mentioned above) that is the shortest and is filled with thought provoking information.  I had technical difficulties and had to place the video at the bottom.

 

3 thoughts on “What is the Middle Class and is it in Trouble?

  1. I love the term “working rich,” but I also love what my cardiologist friend has to say: “People think I’m rich. I’m not rich. Rich people don’t have to be on-call, or mess around with other people’s blood and guts.” It’s all about perspective.

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    1. That is one job I would never want. “On Call” is definitely “working rich.” I also think working 90 plus hours a week is “working rich.” I have a few friends that do this and I only see them a few times a year.

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  2. Thank you for including me in this beautiful post Josh!! WordPress has a function call ‘pings’ so when you link someone’s blog that blog’s suppose to be told about it. It doesn’t always work but I know it’s doable and it’s better than tagging everybody one by one. I’m still trying to figure out that one myself.
    Thanks for the videos too! I love listening to YouTube when I’m working! Keeps me focused on money. Which reminds me…so I think hub and I are in the 1% but we live at the edge of town in a “working class neighborhood.” <- A neighbor told me that during a block party. I have never heard of the term "working class" before. I'm still not totally sure what it is but I don't think labels matter.

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