Who Are You Calling Upper Class?

Inspired by a Seattle Times article entitled "Gap between rich and poor widening in troubled economy" I started to write a brilliant attack on the Bush Administration's tax policies, which in my mind seemed to invariably favor the rich.

Before beginning, though, I decided I needed to clarify some terms, beginning with the term "middle class," which is a term both parties seem to use rather loosely, perhaps not too surprising when you realize how many people claim that they are "middle class" or aspire to be "middle class."

After searching the web for a definition, I ended up here, which seemed to offer the most comprehensive definition of this, at best, rather nebulous term.

It seemed to me that the technical definition offered, that the middle class is that part of the population that lies between the bottom 20% and the top 20%, is rather meaningless. Does that mean that in an impoverished third-world nation that someone who makes a $1000 a year is middle class? Using this definition, it's impossible to argue that the middle class is disappearing because by definition there will always be a middle class, no matter how impoverished the nation might be.

Personally, though, I was more upset by some of the ramificaitions of that definition. Here's one way of using those guidelines to define "middle class" from the article referenced above:

Another way to determine the economic middle class is to take the median household income of $40,800 and define as middle class those households that are between 80% and 120% of the median...that is households between $33,000 and $49,000.

According to that definition, I wouldn't be middle class at all. I'd be part of the upper class, by a rather considerable margin.

Another application of that definition seems even more suspect in my mind:

... using U.S. census data from 1999, the middle class is those families whose incomes are more than $17,000 and less than $76,000.

I'm extremely doubtful that $17,000 would allow a family to live what I would call a middle class lifestyle. Here in the Pacific Northwest, at least west of the mountains where I live, at least half of that income would go for housing. Half of what's left would have to go for food, and most of what's left would go for car payments and gas money. They certainly couldn't afford family health insurance or money for education. I doubtthey could even afford to outfit kids for school, except by going to charitable organizations.

This definition would, depending on the year, again put me in the upper class. It would certainly put most of my friends with two working family members in the upper class, which, again, seems like a questionable categorization to me.

Issues like this make me wish I'd taken more classes in economics or, even, read more widely in the field. I do know that I'll be thinking a lot more on what the term "middle class" really means to me and why I'm so convinced that protecting what I call the "middle class" is essential to the long-term welfare of our nation.

18 thoughts on “Who Are You Calling Upper Class?

  1. I don’t want to sound like a obsessive wikipedia fan, but have you seen its page on Middle Class? At http://en.wikipedia.org/wiki/Middle_class ? It’s really very interesting, and could provide yet more perspectives.

    My definition of middle class has more to do with opportunity than measured income. To me a family is middle class if it can afford a reasonably priced home within 25 miles of where they work (or need to or want to live)–even if they don’t to buy one; can afford to eat well, and eat out a minimum of once a month if they choose, or go to the movies on occasion, or have a membership in a museum. Can afford the necessities, and some of the more realistic luxuries. Can donate part of their income to charities or church. And doesn’t have to worry day to day about making ends meet, getting needed healthcare, losing a job, a home, or all that’s important to them.

  2. I was with you right up to the last sentence Shelley. The vast majority of Americans (Canada as well) are one paycheque away from serious financial trouble. The current job climate in the US (and Canada) is such that those same people are always at a realistic risk of losing their job. Add to this that increasingly in the US (but not in Canada) those same jobs supply an ever lessening degree of healthcare coverage, coupled with the extraordinary high cost of private medical coverage or uncovered medical expenses, and you have a situation in which virtually no-one would qualify as middle class under your definition.

  3. Right, and you probably think that a unsubstantiated, one-line statistic passes for an argument, too, Kaphar?

    Readers might want to go here: http://www.factcheck.org/article.aspx?docID=247 for a more factual look at the ad claim that you’re citing here.

    In fact, factcheck.org is one of the best sources of objective sanity in an election of false claims. They might be the only party I really endorse in this election.

  4. actually, no i don’t think that. i was just interested in the response.

    that website is a great resource. however, it explains exactly what i had already thought. does anyone really think that there were 98 separate tax increases? if they do, im sorry that they misunderstood the ad.

    the point was that Kerry has consistently voted to raise taxes. in my view, that is detrimental to a recovering economy. of course, Bush is no small spender either.

    the only misleading part of the ad is not including how much Bush has increased the size of gov’t himself.

  5. Actually, Kaphar, I’m not even attempting to make any argument here yet.

    As I pointed out, I’m having problems just defining the terms that are used to frame the argument. I guess that’s the greatest weakness of we “liberals.” We actually want our arguments to make sense, not merely serve as propoganda for one side or the other.

    As far as I’m concerned, taxes can either help or hurt the middle class.

    I would certainly argue that the taxes spent on schools and colleges have helped the middle class, not to mention society as a whole, to prosper.

    In fact, I would go so far as to argue that it’s not taxes per se that’s important, but what those taxes support that’s most important in deciding whether they’re good or not for the “middle class.”

  6. I couldn’t find it by Googling, but somewhere in a blog comment section someone defined class boundaries as the number of months you could go without working before it became a catastrophe, thus the ‘upper class’ would be those who would still be secure in terms of accomodation and healthcare for 12+ months (without having to sell major assets) if they lost their jobs, and so on down to those for whom a few weeks would be a disaster. If this puts, say, 80% of people in the middle, the issue becomes how steep the drop is from one end of that scale to other. This is the ‘hollowing out’ which makes those at the upper end seek to differentiate, segregate themsleves from, and eventually cease to have common cause with those at the lower end, which is particularly the case in big cities. “Fear of Falling: The Inner Life of the Middle Class” by Barbara Ehrenreich is a really good survey of the issue.

  7. This may seem really off topic, but I think it fits, as Loren’s original post began to ponder tax policies. I have an idea that is sure to gain me some harsh responses, but, I want to feel the water out with this one. I ask myself, what do most rich people do with their tax incentives/tax breaks? I see them piling up their money into stocks or bank accounts. They spend their money on Lear Jets and yachts. Things that will turn a pretty penny upon resale. I say, give the tax breaks to us young college students. You know what I do when I get a tax return check in the mail? I do the same thing everyone else my age/mode-of-life does, I blow it on cds, stuff for my car, clothes, books, computer gadgets. The money gets pumped right back into the system. I try to save my money, but when a nice fat check rolls around, and you haven’t spent your money on anything but college bills, you tend to spluge that little bonus. Don’t take the money from the rich and give it to the poor…. take the money from the rich, and give it to the teenagers. That money will pump right back into the economy before you can say “bull market”.

  8. In my 3 years at SUNY Brockport, I have yet to meet a college student that has taken out private loans for college. That also holds true for my encounters with students at the Rochester Institute of Technology, as well as for the University of Rochester. Everyone either takes out the college offered loans, or, the Stafford loan (a State offered loan). So, I disagree.

  9. Personally, I’d reject both the previous suggestions and increase the tax deductions for college so that more parents could afford to send their kids to college, or so that students who are working to put themselves through college could better afford to continue.

    I’d even go so far as to insure that the credit not disappear for those who are “rich” so that they, too, would gain a tax benefit for sending children to college.

    Since society as a whole, not just the person going to college benefits from an educated workforce, this is one of those tax breaks that ends up paying for itself in a rather short amount of time.

    It’s the kind of investment society can’t afford not to make.

  10. My point is that private loans are taken out of banks all the time, whether that be for college or something else. So when money is saved it goes back into the economy, unless people are saving cash in there house, which is doubtful.

    Society as a whole would benefit from more skilled workers but not necessarily from more workers with a college degree. I think I understand your statement to say that society as a whole would benefit from more college degrees. If that is what you meant, then what’s the basis for your assertion, Loren?

  11. Actually, I’m a firm believer that all work is valuable and workers deserve to be fairly rewarded for that work. In fact, I’m one of those crazy liberals who argue that minimum wages should be higher.

    I’m also a great believer in technical colleges and junior colleges; so I wouldn’t disagree with that part of your argument.

    I guess the most obvious proof that college graduates are valuable to society is that businesses generally pay them higher wages than they pay high school graduates. I assume that businesses are doing that because they feel they are getting a greater return on their investment, not out of the goodness of their heart.

    And here’s a site that offers statistical evidence to support that hunch:

    http://nces.ed.gov/pubs97/web/97939.asp

  12. I’d have to say if the worker was anyone but your son who was mowing the lawn that I’d have to fire him if he was only worth $3.00 an hour.

    The minimum wage here in Washington is $7.16 and if an employee is not worth that then they’re probably a liability to you organization.

  13. Then what’s the point of having a minimum wage?

    Furthermore, if that someone, who you would fire, is worth $3 an hour to another business, where they’re not a liability, then they should be able to work there for $3 an hour.

    What’s the alternative for someone in that situation?

  14. Well, part of the problem with arguing here is that I simply don’t accept your premise that someone is only worth $3.00 per hour, Reinhold.

    This hypothetical worker would make around $6,000 per year if he worked full time all year. And according to statistics, the poverty level in America is $25,000 per year and below.

    So, are you arguing that this hypothetical person doesn’t deserve to live if he happens to work in America? Or are you arguing that even though he works full time he should have to live in a shelter or under a viaduct and make do with the cheapest food he can buy in fast-food restaurants or quick shops because he sure as heck isn’t going to be able to rent a place with a kitchen with those kinds of wages.

    Seems to me that you’re asking for the kind of unstable society that haunts South America and other third world countries, the kind where people finally rise up and take everything away from the rich who’ve exploited them for too long.

What do you think?