What is the middle class?

September 16, 2012

What makes someone middle class? According to Mitt Romney, it's as simple as making less than $200,000 or $250,000 a year. But as Derek Thompson notes, that implies that 96 percent of Americans are middle-class:


Source: Derek Thompson

In fairness, this is the same cutoff for "middle income" that Barack Obama has used in talking about the Bush tax cuts. $200,000 is also the cutoff that the Tax Policy Center used in finding that Romney's tax plan will raise taxes for the vast majority of Americans. Economists who have criticized the TPC study, such as Harvard's Martin Feldstein and Princeton's Harvey Rosen, focus on this element, with Feldstein arguing that $100,000 is a more appropriate cutoff and Rosen admitting that it becomes much harder for Romney's plan to work without raising taxes on middle-income people if $200,000 is the cutoff than if $100,000 is. But what does a more reasonable definition of "middle class" include, and what does that class look like? And what does the tiny portion of the population that isn't middle-class under Romney's definition look like?

One plausible definition of "middle-class" is those households in the middle quintile of the income distribution, or between the 40th and 60th percentiles. Under this view, 0-20th percentile is lower class, 20th-40th is lower-middle class, 40th-60th is middle class, 60th-80th is upper middle class, and 80th to 99th is upper class. The lower classes make under $20,262, in this view, and the upper classes above $101,582, according to the latest Census data. How do the classes compare, then? Let's compare the five classes, as well as what we'll call the Romney/Obama upper class, defined as those making over $200,000 a year. Here's how much each group makes, on average:

People not in the middle class, under Romney and Obama's definition, make a mean of $426,271; the top quintile makes, on average, less than half that. The lower and RO upper classes are likelier to live in cities than the middle class, but in general the richer a quintile is, the more suburban and less urban or rural it is as well (RO upper class is over $200,000 here):

The RO upper classes are much more Northeastern and Western than the country as a whole:

And as you'd suspect, the RO upper classes are a whole lot whiter than the rest of the country:

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