That’s very much the plight of HENRY’s (high earner, not rich yet) that I guess I would be categorized as. We’d be on the street in a few weeks if we lost our jobs and couldn’t work, but we’re lumped in with people with vast amounts of wealth we don’t have. seems completely unfair.
I guess that touches on why lumping people by yearly income is idiotic, we should measure and tax wealth, not wages, but that’s a feature, not a bug - I think the system very much wants most people working til the day they keel over from preventable disease.
Yeah, I think Trevor Noah’s recent bit about how Musk could buy Twitter with accumulated wealth he wasn’t taxed on, because somehow it isn’t real wealth accumulation when it comes to taxes but it is when you want to buy something, was illustrative to your point. We should at least be able to tax wealth if you’re borrowing against it.
Just wait at the collective rage Millennial/Gen Z HENRY’s are going to have when they realize they are actually just HENR’s. woo boy.
The promise we were all sold doesn’t exist anymore, IMO. It seems to me like the USA for whatever reason has collectively decided we’d all rather live miserable, short, brutal lives as long as we have the slim to nearly zero chance of becoming fabulously, disgustingly wealthy someday, rather than a somewhat reasonable, modest life with few hassles but also zero chance of becoming a billionaire.
It’s funny you mention that because I’m such a clueless naive fool that I didn’t know it didn’t work that way until i saw that bit you just referenced. I always thought “of course it would work that way” and now that I’m far enough along in life to bump into it again, I’m like wait what the fuck?
That’s stuff qualifies as privilege for the majority of the world’s population. It’s not all Scandinavia out there. But you right that here, it really shouldn’t be.
I knew someone would point this out and it is true. The thing I don’t like about it though is it ignores kind of an uncomfortable truth - you’d expect a place like Somalia to suck. It has almost no natural resources to speak of and something like only 1% of its land can produce agriculture. Then you got western powers being a big piece of shit for centuries and welp, here you go, you got a shitty place where those things would be a privilege. Somalia is like what Saudi Arabia would be if there was no oil there.
But then you look at a country like the United States and we have EVERYTHING. We have an embarrassment of riches each and every way you look at it. what the fuck is our excuse, really? we could feed and clothe and house nations 4x the size of us, easily. that number came out of my ass but it could be even bigger.
I’m routinely shocked at looking at California’s economic output. We’re like the 5th largest in the world or some shit. that’s nuts.
The overall statistics on household income distribution aren’t very useful for making distinctions like “middle class” vs. “upper middle class” because the statistics combine information from households at different points in the earnings cycle. In general, earnings are low when workers enter the labor market, increase as workers gain experience, and then decline after workers retire or exit the labor market for other reasons. Here’s what median household income in the U.S. looks like by age group:
By comparison, the median household income across all age groups was $67,500 (source), which is lower than the median for any of the age groups with high labor force participation rates.
Lifecycle effects are even more pronounced for the typical “upper middle class” household because these households tend to have higher educational attainment, which means that their earnings stay low for longer, but are higher during the period that they are actually working. These higher earnings also allow them to retire earlier.
I haven’t found easily available statistics on household income distribution (other than the median) by age, so I have to do a little guesswork about what that looks like. But it doesn’t seem out of the realm of possibility to say that someone in a professional/managerial career track with household income of ~$200k during their peak earning years is upper middle class. And I think someone with this profile could send their kids to private college if they make that a priority, meaning they save for it over time, potentially at the expense of other things.
Spoke too soon. I should have looked at my own data analysis in another thread.
Based on that, I think it wouldn’t be crazy to say household income from $150k to $250k in the 46-55 age group (roughly the 75th to 90th percentiles) is upper middle class.
75th to 90th percentile seems about right to me, but in the end upper middle class is a completely subjective thing and I think some people get highly offended if they make 400k and hear they’re rich rather than upper middle class.
When I hear “Upper Middle Class” I think of it immediately as a 9 category breakdown with all categories being roughly equal, and that being the 6th of 9 categories, but I don’t think it actually works that way.
I could see with how it’s more likely that what we think of as an “Upper Middle Class” lifestyle is probably in the 80th-90th percentile of income earners. So people that are comfortable with money and their place, but are neither wealthy nor building wealth quickly.
138k household income is usually 2 earners with normal jobs. Those people aren’t upper middle class. If it’s one earner and the other partner stays at home that’s actually a very different picture and probably is upper middle class.
138k + an entire person’s worth of unpaid labor that qualitatively improves both people’s lifestyle while saving a quantifiable amount of money on goods and services is SIGNIFICANTLY better than 138k with two people working 40+ hours a week.
Again, it all depends. In major cities/suburbs $138k a year for dual earners is nowhere near upper middle class.
In a city like where I’m from where a 10 year old 3k square foot house runs you $200k, $138k would absolutely qualify.
I agree with you that families with 1 earner are better off than dual earner families at the same income level. Not having to pay for child care being a huge factor there, but the free labor point is fair too.
I like the general definition for me of Upper Middle Class being “Comfortable with money, able to afford some bucket of nicer things (vacation, good cars etc) without going into debt, but also isn’t building towards significant wealth”.
I think we were right when we put the minimum earnings for that basket of goods at 200-250k ITT. You can say that it’s cheaper in lower cost of living places, but it’s a lot harder to find a job paying that kind of money in lower cost of living places. There are a lot more jobs paying 250k in Austin where I live now than there are in Louisville where I moved from.
I guess to me the main difference between buckets to me would be “Upper Middle Class” and “Rich but not wealthy”
People who are in the 2nd category can afford to consume everything that people in the 1st category can, plus have plenty left over to amass as wealth through savings, investments, etc. They can also choose to be dumber about their money and consume it all through nicer purchases, bigger homes, etc. Things that would be simply out of reach for UMC people unless those UMC people took on mountains of debt.
To me it’s more that upper middle class can choose to do one or two of the things rich but not wealthy people do but not all of them. Like upper middle class family could have a boat or a golf club membership and still save for their kids college or they could drive high end cars and take overseas vacations or fancy ski trips but probably only one or two of those things, where rich families can do all of them.
Student debt load also factors in highly. For a couple making 150k, if both are still paying down student loans their lifestyle is going to resemble middle class more than other upper middle class, but they do have a higher level of financial security due to higher expected future earnings.
A few of my friends are in households that make over twice what my wife and I make, but they have 2 or 3 kids and my wife and I have none. I’d say we are in nearly identical class baskets.
Starting from scratch and or negative has to have an impact on status as well. A household making $200k that started with nothing or less than needs time to grow a nest egg that I think is necessary to be upper middle class.
Fair enough, mine is definitely more of a traditional 90’s definition, although needing to throw in a ‘gentry’ class definitely feels like a California thing! I know literally zero people who’d be considered the gentry
