4 hours ago
Friday, December 01, 2017
What's Middle-Class?
On another blog, I saw a naive blogger making the claim that $160,000/year was "middle-class," and that she didn't understand this claim that "people like her" weren't middle class. After all, her family only took a few "very modest" vacations* a year, and only ate out a few times a week. The claim, she said, that people making $40,000/year were middle class had to be nonsense. That was abject poverty! (For the record, up until a few years ago, I made just over $50,000/year. Since I became a full professor I make somewhat more than that.)
So I'm sharing this link, which gives the range considered middle-class in each state. And yeah, someone making $160,000/year is not middle-class, not anywhere in this country, in case you were confused. (Apparently a lot of rich people are confused, which is one problem with America. "But we're just middle class!" they cry, no matter how much money they have. "We can barely struggle by with our two million a year!")
Though I do agree, for what it's worth, that trying to raise a kid on $40,000 a year means something close to abject poverty. But half the people in the town I live in are raising kids on less than that. So, you know, I'm not spending a lot of time worrying about someone making four times that much, who can only afford a few "modest" vacations a year.
*Like most people who are actually middle-class, my family has taken one vacation in the past decade. We couldn't really even afford that one. And boy, was it modest. We drove to Kansas City, five hours away, stayed overnight in a hotel, and visited a free museum.
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8 comments:
I've been very open about my financial situation on my blog, as you probably know. I think our gross income last year was about 130,000-ish. In our state, that's above middle class. But I think in our case it's fairly deceiving, considering the incredible amount of debt we had to accumulate in student loans, credit card debt, and other personal loans (not like mortgages or car loans) in order to get to that kind of salary. Our membership fee to the middle class (or whatever) means that even though we make a lot of money on paper, we are only just now to a point at which we can afford to pay the monthly payments for our entry fee into the middle class. It's only really been within the last few years -- maybe 4? -- that we haven't been on the verge of financial collapse, despite, on paper, seeming "rich."
And yes, I do a lot of traveling, but it is all completely subsidized by my university. If I weren't presenting at a conference in Hawaii, for instance, we never would have gone. And in fact, in order for the kids and hubby to go, we had to borrow money from my mother, which will take a long time to pay back.
I'm not saying that we're poor. But I am saying that we aren't rich. Our debt far, far, far outstrips our income, and I'd say at least 260,000 of that (our student loan debt) was 100% necessary to get to where we are today. The vast majority of the credit card debt was gained when I was an adjunct in California and didn't even make enough to pay for daycare, really. We're in credit counseling, and hopefully that debt will be paid off in a few years. But if we borrowed no more money and only had the debts we have today for the rest of our lives, it would still take at least 20 years to pay all of it off. And we pay so much of our income into our debt that we don't have money to save for retirement. So maybe we'll never retire. We'll see.
Yes, debt does make a huge difference. I make about twice the average income for our town, but I'm still dirt poor -- I'll never own a house, we have one car, we have to think carefully before we buy a pair of jeans -- because of our enormous medical debt. (I did have that paid over, but then this year we had two big medical expenses, my surgery and the kid's medical scare.)
It's good your university pays for your travel! Ours used to. Now it pays some, but only some, and I can't afford to make up the difference. :(
Sometimes I read blogs where people make about what we did until recently and think, why can't I have all these nice things that they're buying? And then I remember that we would be in debt if we'd bought a house in those circumstances, renovated it a ton, went on all those vacations, had nicer cars, etc. etc. etc.
This is the first year that I feel like we could afford to go to on a "real" vacation. Instead, our concession to the higher income is flying to my in-laws in the rural midwest instead of driving 13 hours straight to get there.
Anyhow. We are definitely well-off right now and I am so worried about the future with all these programs being cut and taxes on people bettering themselves. I was able to climb up past the middle class but I sure wouldn't have been able to do that if my parents had had to pay taxes on my private college tuition waiver. My state flagship school is terrible for women (and minorities) in my field, as it is for most STEM fields (though great in #2's field). I probably would have switched to something far less lucrative.
I've seen elsewhere that the minimum amount for feeling well-off is somewhere in the range of $80,000/year -- which I haven't hit yet, nowhere close, so I wouldn't know.
But yeah, if you're overspending that, or if you have a ton of debt, or if you're getting taxed to pieces, the amount you need is going to be higher. Right now, even with my parents paying the bulk of the kid's college expenses, the amount we need is higher, because we're still paying some incidental costs (which don't feel all that incidental to us).
Not to mention medical costs. If I wasn't buried in medical expenses/costs, I'd be much better off.
An overnight hotel room? That's more than I've done. I've gone to college reunions, but I stayed in dorm rooms then.
Greyhound's Cyber Monday deals have been helpful since then; I've used them to get 75% off round trips (the catch: travel must be in January or February). Then I make sure the trip is overnight so I don't need a hotel room.
The drawback? Going to college reunions can be time-consuming. One of my classmates came in from Kazakhstan, and he spent less time traveling than I did. Granted, I spent a day in Boston on the way up, but I've got plenty of time.
I think it's more complicated than just income. Debt matters, and also being able to count on backup? (That is, most folks who feel middle class can borrow money from a parent, sibling, or other relative for the short term if they need to; I think that leads to a sense of security without most folks being really aware of it. It's just so much easier to land on your feet after a financial set back if you've got that sense of backup.)
It also seems like it's hard in our US consumer culture not to feel that you have to keep up with the Jones. And feeling like you work hard for your money, so you deserve that vacation or car or whatever, even if financially it doesn't really make logical sense.
Medical bills are a whole other hell.
"...being able to count on backup."
True! When our car broke down, and we were absolutely desperate (we only have one car, which we need to get to work -- no real public transportation here), we were able to call my parents and they were able to help us.
Not everyone is in that situation. I've got many students, for instance, whose parents are less financially secure than they are. When their cars break down, or their power gets shut off for non-payment, there is literally no one they can turn to. And these are students making far less money than I am.
Bardiac is right. Debt matters. Backup matters. It wasn't really until I was in my doctoral program that my parents had enough money to help me out at all. Of course, that comes with an emotional price tag, too. I was willing to sign up for the emotional price for Hawaii, because hubby has wanted to go there as long as I've known him. (He was born there, lived there until he was 1, and then left and never went back, but always wanted to.)
And yes to medical bills. I haven't had cancer, but I've had surgery without insurance as a grad student, and lots of medical costs associated with the kids. (Five ER visits in the last six years.) So many medical expenses! It's practically never ending.
I feel you on the one car, too. We had one car for the first nine or ten years of our relationship. It sucked. :(
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