9 ms·
Are people who make $200k middle-class?
- ckastner 7y agoThere's no correct answer to this. The answer clearly depends on where people live.
- mc32 7y agoIt also depends on their lifestyle (how wisely they manage their income).
- thatfrenchguy 7y agoNo, it’s not. If you make 200k in the Bay Area you’re not middle class.
- tudelo 7y agoWhat are you?
- deleted 7y ago[deleted]
- deleted 7y ago[deleted]
- evo_9 7y ago...but if you make 200k in Detroit you're above middle class... so again, like OP said, this is all relative to where you live.
- slumming-it 7y agoI dunno why people make such a big deal about Detroit. On paper, the statistics might look bad, but if you've ever visited Detroit or spent an amount of time there, it's very much like NYC.
- PhasmaFelis 7y agoEven in the Bay Area you can get a decent apartment or home mortgage for $40-70k a year. Taxes on $200k are gonna be less than $25k. Parking and gas are a few hundred at most, food might be as high as $1000 if you've got a big family or eat out a lot. Let's guess high and say another few thousand for utilities, phones, etc. Let's also say you've got some family health crises your insurance won't cover that run to $10k out of pocket. That leaves you at least $90,000 free and clear. If you can't live comfortably and save for retirement with ninety grand a year, you either have some outstanding expenses (severe medical disability, etc.), or you're making some very bad decisions.
- cannonedhamster 7y agoI literally just looked at home prices in the bay area. I found a literal handful of homes/apartments available in that price range. One was a 300 sq foot apartment, most of the rest were unbuilt lots. I'm not sure if you're talking about auctions or foreclosures, etc. Can you elaborate on that? I can't even get a home in my much lower cost area for that price. I can tell you $1k/month for a family of three in my area is typical grocery expenses before eating out. We can certainly cut back but bargain basement is about $800/month unless we're eating nothing but ramen and cereal.
- deathanatos 7y agoI interpreted the $40-$70k/yr ($3.3-$5.8/mo) figure as the cost of the mortgage, not the home. This should correspond to a roughly $1M loan, which, with a downpayment of around $200-$300k (the cost of a house elsewhere…) gets close to $1.3M, which pretty nearly the median list for much of the Bay Area (corresponding to ~1200 sqft in SF). On the lower end ($40k/yr or $3.3k/mo), you should be able to find a studio in SF for that or for a bit more, a 1 bedroom (median 1 bed is ~$3.6k/mo in SF). (I'm not saying that's good, just that it shouldn't be as bad as you think.)
- PhasmaFelis 7y agoI'm talking about the yearly rental rate/mortgage payment. This is my main source: https://smartasset.com/mortgage/what-is-the-cost-of-living-in-san-francisco https://smartasset.com/mortgage/what-is-the-cost-of-living-i... It's possible I lowballed some things, but see my other comment. https://news.ycombinator.com/item?id=20415130 https://news.ycombinator.com/item?id=20415130
- mikestew 7y agoOne could turn it around say that no middle-class people live in, say, Medina, WA (where BillG lives). Cost-of-living determines which class or classes get to live there, not the other way around. At the extreme, in a hypothetical neighborhood of $10MM NYC penthouses are you going to say $1MM/year is "middle-class"? If so, we simply aren't going to come anywhere close to agreement.
- danans 7y agoAny statistical analysis can have nonsense results if you choose a ridiculously biased sample. The US census has various methods for establishing a sensible subdivision of space for deriving statistics like this, including metropolitan areas, micropolitan areas, and combined statistical areas [1] The examples of Medina WA and penthouses in NYC don't fit any of those. 1. https://www.census.gov/programs-surveys/economic-census/guidance-geographies/levels.html#par_textimage_5 https://www.census.gov/programs-surveys/economic-census/guid...
- charlesdm 7y agoAnd it also depends on the tax rate. Making $/€100k gross, pre tax, means something different in San Francisco vs say Barcelona.
- xienze 7y agoDo you think voters really care about that? To a huge number of them, $100K+ per year is a fantastic sum of money, and dammit, you need to pay your fair share. You're "rich", after all! Or at least, rich _from where they're standing_. Trying to make arguments about cost of living aren't going to help one bit when it comes time for a politician's promises to be paid for.
- ataturk 7y agoI'm pretty tired of re-framing this same issue. I sit here at work because although I'm nearly a multi-millionaire, I have very little actual long-term confidence that that nest egg is going to have any value over say, the next 30 years. I would retire today if I thought it would. Inflation is deadly. The constant moving of goal posts is deadly. And I'm a humble man--I don't have caviar tastes. I do want to put two kids through college. How the fuck much is that going to cost? $200K each? Is it even worth it? I should just buy each of them a business. The US has gone insane and it's time to put things back to sanity. BTW--even starting a self-storage company costs like $5M now. Again, insane.
- scilro 7y agoIn terms of economic class demarcations, I find the Marxists' definitions much easier to follow and reason about. If you own capital, you're a capitalist. If you work for a wage/salary, you're a worker. You might be an extraordinarily affluent worker but your relationship to capital is the same. Also, some might be part-time capitalists and part-time workers.
- rmbryan 7y agoThis is the only definition that matters.
- harryh 7y agoReally? A guy working at McDonalds for 10 bucks an hour is no different from a software engineer pulling down hundreds of dollars an hour? Please.
- akavi 7y agoMost engineers in tech will have the majority of their net worth growth come from returns to capital and imputed rent as they approach retirement age. Does that mean they shift from "worker" to "capitalist" over the course of their life? I'd say there's some value in having a term distinguishing those who will predictably be in that state from those who will not be, no?
- saalweachter 7y agoIs that meaningfully different than being a "pensioner"?
- wry_discontent 7y agoI haven't found it useful to think of those categories as strictly binary. You can be a capitalist and a worker, as far as I can tell. They're more like roles than essential qualities.
- scarface74 7y agoIn the Marx era “owning capital” was a means to create products that you could sell to make money. In 2019, where if you have a credit card to create an account on AWS, you can create a product that has a near zero marginal cost.
- base698 7y agoTo me the distinction between middle class and upper class is if you can pay a group of people a salary and still accumulate wealth yourself. Also, are you free yourself and do you have to work? The line between middle and upper middle has more to do with disposable income and which consumer habits they hold.
- _red 7y agoThe unspoken tragedy of this is how the IRS limits for "wealthy" were developed in 1913 when $250K as upper-limit was equivalent of several million dollars now. They seem to have zero interest in re-calibrating those high brackets into something more meaningful to account for the 100 years of continually inflation.
- eli 7y agoweird how tax cuts always seem to be indexed to inflation while tax rates aren't
- Bartweiss 7y agoIt certainly doesn't help matters that housing prices have massively outpaced inflation for many years. Cost of living still mattered when the brackets were set, of course, but there weren't the common and enormous differentials that we see now. At $250k it's perhaps less relevant, but it's basically impossible to assess how "high income" $50k/year is when rent is anywhere from <15% to >50% of that value.
- Isamu 7y agoThat is why we use the term “middle-income”, because it is defined in relatively straightforward ways. The whole reason for this discussion is the lack of sharp categories when talking about class.
- imgabe 7y agoLower-class / Middle-class / Upper-class defined as brackets of income seems to be the wrong way to divide things. There is an ownership class that receives preferential tax treatment and a labor class that doesn't. A small business owner might only net $80k/year, but their incentives in regards to policy are more aligned with a billionaire startup founder than with an $80k/year middle manager, because their income doesn't come in the form of a W-2 job. It doesn't really matter the amount of income you're getting, it matters a lot more in what form it comes. People who work for others and have a boss who determines their livelihood have more in common with each other regardless of how much they make than people who own businesses. Even movie stars have a union.
- sandworm101 7y ago>> Even movie stars have a union. There are limits. Most all celebs and sports stars are not really employees. They setup personal services companies that contract with the "boss" and then pay themselves a salary from the services company. Even thought they have a clear "job" and theoretically are paid a wage, such persons care more about taxation of dividends and the costs of offshoring money. If they choose to pay taxes, they determine for themselves where and when that money is paid. So while a working union actor may have much in common with the factory worker, the celebrity stars who earn millions do not. The breaking point between the two groups, imho, is the personal services contract. Those who work for the agreed standard or union wage are workers and arguably lower/middle class. Those who negotiate their own pay structures are not.
- imgabe 7y agoFair enough I was being somewhat tongue-in-cheek. I think we are long past the days where actors would be under contract to only work with one studio.
- shados 7y agoI think there is one line that matters in term of income though, and it is the threshold of "I no longer worry about most things". On one side you have the folks where a bad health emergency, a boiler that breaks, a forgotten debt or an issue with their car could be the end of the world. Then there's people who are sitting on the couch, notice the floor is dusty, cringe and call their maid service to come back to clean the spot they missed. there's some overlap, but generally speaking the two groups see the world VERY differently. Your priorities change a lot when your day to day is about survival vs when it's about making sure you don't lose what you have.
- gringoDan 7y agoThe problem in these types of discussions is the general conflation between income and wealth. In the US, most people are taught from a young age that they should strive for high-income, high-status jobs (engineer, doctor, lawyer). Yet that was the path to success 50 years ago, not today. As the article mentions, you can have a huge income while still having lots of debt, being unable to afford a home, etc. - especially if you live somewhere with a huge cost of living, like the Bay Area. When you are reliant on income, your money scales linearly with the effort and/or time that you put into your labor. (Actually, sub-linearly - the company you work for captures the majority of the value.) Conversely, to become wealthy, you must build ownership in something. Then, your money accumulates exponentially as a function of your labor input. One of the most successful people I know worked manual labor jobs, bought a small HVAC business, scaled it up, and now has contracts with most office buildings in one of the largest cities in the US. He is richer than 99% of FAANG engineers. https://twitter.com/naval/status/1002103360646823936 https://twitter.com/naval/status/1002103360646823936
- akavi 7y ago> you must build ownership in something You can do this by buying index funds, too. That's sorta the whole idea. > He is richer than 99% of FAANG engineers Would he be richer than 99% of FAANG engineers who lived the same lifestyle he did during those years and invested the savings in a standard diversified portfolio?
- dangus 7y agoPossibly, but remember, investing in a diversified portfolio doesn't have the same risk profile as starting an HVAC business. This is essentially an example of survivorship bias. How many people starting HVAC businesses just go out of business within 5 years instead? It's not much different than a FAANG engineer buying a bunch of Apple stock in 1998. They could have immense wealth or have gone bust if Apple had gone bankrupt as was the most likely outcome at the time. But with a diversified portfolio we know the outcome, about a 5-10% gain per year over a long-ish period.
- 7y ago
- beebmam 7y agoClass is about wealth, not income. Some people have extremely high expenses, for whatever reason: senior care, dependents, disability costs, locked into a shitty mortgage, absurd regional housing prices. I encourage everyone to stop looking at income as a class-definer :)
- cannonedhamster 7y agoYou forgot healthcare costs. Many businesses either don't offer or have really, really bad healthcare options. Why it's still considered something tied to businesses and not the individual I don't know.
- jasode 7y ago>"Are people who make $200k middle-class?' We have to distinguish what exactly we're asking. Do economists and social pundits classify $200k income as "middle class"? Clearly some don't. Some sort of meta survey would have to answer who considers them "upper class". However, do workers in America earning $200k as a salary from a job self identify themselves as "middle class"? Yes, they absolutely do. This is how many people (in America) self-identify their class: - lower class: living on welfare, food stamps, and federal subsidized housing; or including those struggling without any government assistance but working 2+ jobs to make ends meet - middle class: workers with jobs in between lower class and upper class - upper class: able to live off interest income of investments
- welfare 7y agoThis is the best definition I've seen and I really buy into the logic. Instead of defining middle-class on it's own, it makes much more sense to define it's boundaries (lower, upper) and middle is what the name implies, in between two classes.
- dustinmoris 7y agoI like this definition, but I think our society cannot be meaningfully represented in 3 classes anymore. Someone might not be able to live off interest income alone, but they might own a small internet company which makes them a few million dollars a year. These people can walk into a shop and buy a Tesla with cash without even having to think about it twice, but they wouldn't be able to buy a £45 million penthouse apartment in Singapore like the Dyson guy did recently. I would certainly classify them as upper class, but then there is probably at least two more classes above them.
- harryh 7y agoA family of 4 making 60k a year that has to carefully budget all expenditures should VERY CLEARLY not be lumped together with a single dude in his 20s pulling in 200k a year at a tech job. That guy might not have quite the fancy apartment he wants but can pretty much pay for anything else he wants (a tesla, fancy vacations, every electronic gadget he wants). This whole thread is full of rich tech people trying to lump themselves in with people in far different economic circumstances because they are uncomfortable with the fact they they are rich. It's gross.
- sct202 7y ago$200k for a single wage earner is definitely a lot (also for a lot of higher income people, aren't wage earners), but $200k for a household is like in the ~92th percentile. https://personalfinancedata.com/income-percentile-calculator/?min_age=18&max_age=100&income=200000#results https://personalfinancedata.com/income-percentile-calculator... There are a lot of definitions floating around for the middle class, but a family in the 92th percentile is probably more similar to a family at the 50th percentile than a family in the 97th+ percentile.
- rayiner 7y agoNo. One of the biggest and most destructive myths in America is that upper class folks are actually middle class. A $200,000 income puts you in the top 10% in every metro area int he country, and in the top 5% most places. That's upper class, not middle class. This myth is particularly pernicious in the area of taxes. The top 25% minus the top 1% earns half of all income. These people need to be taxed like upper income people, not middle class people. Confiscatory taxes on the "top 1%" (or people making $10,000,000 per year, or wherever the line keeps getting moved to) can't raise sufficient revenue to fund a modern welfare state. In the U.K. and Germany, the 40%+ tax bracket (both countries have a top bracket of 42-45%) kicks in around $60-70,000 of individual income, or about double the median income. In Sweden and Denmark, the top tax brackets kick in around 1.5x the median income. The second highest tax bracket doesn't kick in until 6-7x the median income. In Sweden, about 15% of people pay the highest marginal tax rate. If that was the case in the U.S., the top tax bracket would kick in above $120,000 household income. That makes total sense. These people are very well off and should be subsidizing the rest of the country.
- AzzieElbab 7y agoJust because I made 200k one year does not mean I will make the same amount next year or have earned as much a year before. Tax brackets non withstanding, it is completely illogical to group individuals into classes based in current income alone. One could be a recent refugee starting from nothing or a recent college grad with enormous student debt
- jquery 7y agoThis is absolutely true, especially in software where you’re more of an athlete, look at the ageism in our industry. We aren’t like doctors/lawyers making $XXXk in perpetuity and seniority guaranteeing job stability.
- harimau777 7y agoI think its important to consider that in the Nordic Model, people making more than $200k still benefit from social programs such as health care where in the US generally only the poor benefit from government assistance programs. I would be much more willing to have much higher taxes if I believed that I would benefit from the programs that they pay for.
- exabrial 7y agoIn San Francisco, yes... In Topeka, Kansas you have a ranch and 50 acres.
- deleted 7y ago[deleted]
- Mc_Big_G 7y agoIf you live in the bay area, first you'd need to save $200k for a downpayment on a house. That would probably take 3-5 years at that salary if you can be frugal. After purchasing a house, your mortgage is going to be something like $5k - $6k per month. You will still need to be very frugal and will not have anything left to save or invest. You will not be living "the high life" as someone from the mid-west would assume with that salary, but you would own a home that will probably appreciate.
- KaiserPro 7y agoIn the US? maybe. But then race is a large factor, as well as money. In the UK money rarely buys you class. You are born into your class, and unless you have elocution lessons, or go to a grammar school (or a sink school for the opposite direction) then you stay like that.
- plutonorm 7y agoYup. It's sickening. What's worse people seem to be comfortable with the status quo. If everyone was of my mindset there'd have been a revolution by now. But people seem to adjust there view point to give themselves a more comfortable life. Better to not think about the inequality of the world or to rationalise it as 'right' than to live your life bitter. Or guilty if you happen to fall in the upper classes.
- underbluewaters 7y agoI can see where people are coming from considering themselves middle class making 200k household income. In order to to have the things my parents had growing up in California today (own a decent home, saving for retirement and 2x college funds, go on vacation every couple years), 200k is a reasonable goal. That wouldn't make my household anywhere near median income, but it would meet a the American cultural ideal that many people are working towards. Incredibly, my Dad was able to provide these things being the sole earner in the family as a construction foreman.
- serioussecurity 7y ago:-/ I make $300k / yr. I live in a 10 x 18 room, in an apartment with 3 room mates that has an acceptable kitchen and a cramped living room. I save > 50% of my income, which is nice. But I also spend ~ 80k / yr on medical expenses. I guess I'm upper class if "hoping to retire to a remote part of the world at around 35, and live off ~20k / yr til I die" is a reasonable hope. But also that's just ... ill. I hate the "upper / lower / middle class" model because I don't think it really is a meaningful way of slicing society anymore? It's a very post-WW2 idea of how our society is organized and what's desirable. I'd tend to start slicing along a set of lines like: -- urban / rural -- race -- age -- degree of community support / culture -- type of labor (knowledge, service, manual, ...) I'm working on building long term community structures (one of my low-key goals is to buy and convert a church into a community space). Because the "I'm X class!!!" is dumb; it treats people as totally not dependent on their community. Unless you're willing to pay for community builders to do their work, you're not going to have any real community. (btw, this is why I can't stand people skeptical of affordable housing and the like: why do you think it's pleasant to live in neighborhoods with a robust variety of people? because often people that aren't working all the time can do things like maintain a community garden. Which is only possible if they can live in your community.)
- icedchai 7y agoIt depends. Class is not about income. It’s about net worth, IMHO. If you need to keep working to maintain your lifestyle, you’re middle class.
- tossAfterUsing 7y agoThe article would have you believe that class is a result of wages. It's not... it's the outcome of social structures. There's a corellation between money and class... but money is not the only factor. > None of this is to say the Times' "middle class" are the real victims; the 95 percent of Americans below them are doing even worse. No, please... tell me who the _real_ victims are. </snide> Not to get too far off the rails here, but i think this article is too wrapped up in conversations about Lower/Middle/Upper wage-bands. That's a distraction from the more serious conversation we could be having about Class, which is distinct from wage-earning. Class is about control: Ruling Class --> Management Class --> Working Class If the terms of your lifestyle are dictated to you by a boss, you are working class. If you can't stop working forever, today, you are working class. If you're not powerful, you are working class. There's a very slim chance that anybody reading this isn't working class... When we think about other people "below" us, we're not recognizing that these are our brothers and sisters in a continuing struggle for freedom from oppressive social structures. Wages come from bosses. If you have a wage, you're probably working class. We would all do well to remember that most of us are on the same page. We shouldn't let the Managing Class tell us we're different from each other, because we get different wages.
- nonce42 7y agoI've spent many years in the US at many income levels, and my conclusion is that the middle class in the US is genuinely very large and includes people making hundreds of thousands of dollars. When someone making $200k says they're still middle class, that's not some rich person nonsense but an accurate description of their life. They're upper-middle class, but still middle class. If you're a software engineer making $200,000 and talking with a teacher making $39,000, you're making more money but fundamentally you have most things in common. You're living similar lives, it would make sense to be neighbors, friends, date, etc. (Part of this is social class, but not entirely.) Now consider encountering a hedge fund manager who flies everywhere in a private plane. If you met this person at a party, you'd probably wonder why they were there talking to you. You'd have essentially nothing in common with them. This person is fundamentally in a different class. I'm not sure where upper class starts, but based on personal experience it takes much more than $10 million.
- motohagiography 7y agoIt's not how much you make, it's how you make it: - dependency: allowances, public welfare, UI, grants, bursaries, inheritances and trust funds, scholarships etc. - labour: paid for fungible work. (piece work, hours of labour) - time: paid for individual time spent. (salary) - knowledge: paid for things that can be taken and reused e.g. analysis, opinion, assessment, advice, teaching. - performance: paid for outcome only you can deliver. e.g. litigation, sports, music, prizes, bonuses, gambling. - risk: paid for taking/holding risk, priced-in compensation for perceived potential loss. e.g. leverage, brokerage, insurance, liquidity. - capital: charging rents on a capital asset. e.g. real estate, dividends, loan interest, franchise fees, IP licensing. - power: taxation, tributes, bribes, etc. We can dress up the amounts people make and make up vanity excuses, but these are what you get compensated for, and there is definitely a hierarchy. Everyone likes to think they are middle class, but what really defines social position is how and for what you are compensated.
- rags2riches 7y agoThe strict focus on income and wealth when discussing class is peculiar to my European perspective. To me, there are large overlaps of working class and middle class, as well as of middle class and upper class, if one is only concerned about income and wealth. Culture and values are part of class and I can't understand the discussion where it is completely left out. Passing as something else than what you were brought up as is very hard. People trying to pass is an eternal source of drama and worry. Spending beyond your means in order to pass is a common reason for financial ruin.
- RickJWagner 7y agoI subscribe to the ideas offered by Buffet, Bogle, Dalio, and pretty much the entire Bogleheads community. To wit: No matter how little is earned, saving and investing a percentage will result in relative wealth over time. I have seen it work for people. I have not seen it fail. I believe it.