Thursday, September 06, 2018

Here Is a Definition of the Middle Class

If you're middle class in in the United States, then your household income is between $37,000 and $147,000 for a household of three people, reports Brookings. This is how it will define the middle class in its Future of the Middle Class Initiative, which aims "to improve the quality of life of America's middle class and to increase the number of people rising to join its ranks." Brookings is defining the middle class as the middle 60 percent of households—the 30 percent with incomes above and below the all-household median.

Brookings has acknowledged that there are many ways to define the middle class. Each falls into one of three broad categories—economic resources, education/occupation, and culture/mindset. Brookings has undertaken an examination of the many definitions of the middle class and finds most insufficient for its purposes. Take the educational attainment definition, for example. Having a bachelor's degree could be used as a minimum threshold for the middle-class. Brookings rejects this concept because it wants to understand what level of education leads to the middle class, and "we can't do that if we've set the answer into our definition."

Defining the middle class by culture or mindset, says Brookings, doesn't work because it is too inclusive. It encompasses not only those already in the middle class but also many who are working to get there. "This very inclusiveness gives the definition less bite," says Brookings. "Many people might aspire to a middle-class lifestyle, and work toward it, but not make it." The goal of Brookings' Initiative is to determine why some do not make it into the middle class, and an overly inclusive definition of the middle class does not allow for that.

This leaves Brookings with an economic resources model of the middle class. It has chosen to define the middle class as the 60 percent of households in the middle of the income distribution. One criticism of this approach is that the middle class can neither grow nor shrink. "For us, this is a feature rather than a bug," says Brookings. "We are able to evaluate changes in the share of income or wealth going to the middle class independently of changes in the share of households in the middle class." Brookings did just such an evaluation, finding that the share of income going to the middle class fell from half in 1979 to 40 percent in 2014. More to come.

Source: Brookings, There are Many Definitions of "Middle Class"—Here's Ours

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