178. Are you middle class? What do the numbers actually say? Why does this matter?

Welcome to Progressive Pockets! Whatever keeps you up at night- climate change, income inequality, oppression, homelessness, you name it- there’s a real chance that we are leaving some of our power on the table. I believe that we can use our dollars, as everyday people, to help create the type of world we’d like to live in. I go by GG that’s short for Genet Gimja and you can reach out anytime at progressive pockets at gmail dot com if you want to suggest an episode or get in touch.

And today’s episode is about this term “middle class” or “middle income” and what that means. Most people that I talk to say that they are middle class and I used to say that too. Until I became exposed to people of much higher wealth brackets who also identified as middle class. But I’ll get to all that. What is the actual definition of middle class?

If you ask an economist what the definition of middle class is, they will give you a technical answer. They will calculate the median income for a place and then they will say OK if this is the median income for a place, then let’s calculate 67% of that and say that anyone who is paid less than that is in the lower income bracket and anyone that earns 200% of that is in the upper income bracket.

But that’s hard to really grasp. For example, I don’t know the median income in our country. But you don’t have to be able to do the math in your head.

There’s an interesting income calculator on Pew Research Center’s website that I’ll leave a link to in the show notes. It is very simple. You can put your city and your family size and your income and it will tell you if you fall within the lower income, middle income, or upper income bracket. And you might be surprised at what you find out.

In the DMV, that’s Washington DC Maryland and Virginia, middle income starts around $60K/year for a family of three. And it ends around $190K/year for that same family of three. That is a huge range, the difference between living off $60K a year in Washington DC versus living off $190K a year is just huge. And yet that’s all considered middle class. Middle income. So it’s no wonder that it is so confusing that most people walk around identifying as middle class.

I ran the numbers for other areas too just to get an idea. In the San Francisco Oakland Fremont area, middle class starts around $70K a year for a family of three. So that’s higher than in the Washington DC area where middle class starts around $60K. So in the East Bay, you need around $70K to reach middle income and then you are still considered middle income until you reach about $200K/year. That is just wild. Middle income in this area is an income of $60K to $200K.

But you know, coastal elites yada yada, what about other Americans? Let’s pick a place like Cincinnati.

In the Cincinnati area, middle class starts around $50K/year for a family of three and it ends at around $150K/year for that same family. After you surpass $150K/year income for a family of three in Cincinnati, you have reached the upper class. Upper income. That threshold to reach the upper class in the DC area was $190K and in the East Bay it was $200K.

But these are all really technical definitions. I don’t think most people are thinking about the exact numbers when they say “yeah I grew up middle class, or yeah, we aren’t rich, we’re middle class.”

There’s a fuzzier, more vague definition that’s a little harder to pin down. When people say they are middle class, they might think of society as being working class, middle class, and then upper class. This word “class” is tough for me, I’m using it in this episode because that’s how most people talk about it, but “class” feels antiquated and like I’m talking about whether you are sophisticated or not. And Lord knows money doesn’t buy class. And just because you have a low income, does not mean that you aren’t classy. This word class really needs to be put to rest.

But the point is that I think most people think of society in those three categories, working class, middle class and rich. Maybe they have a fourth category that’s extremely rich.

And I think when most people are using these terms they aren’t just talking about income. They are talking about education level, college degree starts to mean middle class for a lot of people. 

There’s also something intangible about the type of job you have. If the job is something like a manager or a professional, people start to consider that middle class. 

Back when I was growing up, home ownership was a signifier that you were in the middle class. And also, the ability to afford the extras in life. If your kids had braces, you were in the middle class or upper class. If you could afford leisure, one vacation a year, you were middle class. Even if it was a road trip and you stayed in a motel 6 and your mom packed sandwiches and you never ate in a restaurant the entire vacation, the fact that you could afford leisure at all meant that you were middle class.

Did you grow up middle class? Do you identify as middle class today? When you talk to people about how they grew up, do they identify as middle class?

Why does this even matter?

I think it matters because we are living different experiences in our country and in our world, and if we aren’t clear about that, if we think we’re all living basically the same, then we are going to have a really big blind spot when it comes to understanding what our communities need.
I have shared before on this podcast in a previous episode talking about how much money is enough (episode # ???) about talking with someone who was in literal tears about how her family barely netted $2 million dollars a year. She said, and I will never forget this for the rest of my life, that her family lived “check to check.”

This is how she felt. She spent some time detailing how their money seemed to fly out of their accounts every month. And I’m not here to tell anyone how they should feel, but I do want to point out the danger in thinking that you are middle class or that you’re living check to check.

The danger is that when someone needs help and they say “I am living check to check,” we will not know what that means. That someone is struggling to afford food. To afford basic shelter. To afford basic medical care. Living check to check means that you are probably robbing Peter to pay Paul. That means borrowing money from your neighbor to pay back your sister. Now you owe your neighbor but your sister can get through the week. It means deciding every month if you will pay your water bill or your electric bill.

This is what it means to be living check to check. It means that if your job were to delay paying you by a day or two, your kids won’t be able to have dinner tonight.

If we are more honest and more accurate about money, we will be able to better understand what we need, what our community members need. 

If we are having more transparent conversations about money, being more accurate in our money stories, we will have a clearer sense of how the systems around us are working. How money is flowing. Where it isn’t flowing.

I remember reading a memoir of an American living overseas and he talked about how it was widely known that Americans pay way more than the local rate for housekeeping and similar services. And how he hired a woman to cook and clean for his family for a few years because she had been used to working in American homes in that country. So she was familiar with American recipes for example, and just some cultural preferences. Anyway, given that she had worked in American homes for decades and had been charging Americans much much more than other housekeepers in her country charged, the American wrote about how he assumed she’d have a pretty middle class lifestyle, there’s that vague word again, middle class. 

Well, as he got ready to move back to America, this woman invited his family to her family’s home for lunch. And he wrote about the shock of realizing that she lived in a shanty town, in the slums. He would have described her living conditions as impoverished after he actually saw how she lived. Not middle class at all.

When we don’t talk about our money stories, and when we aren’t accurate in the way that we talk about money, we’re left to our own assumptions. And usually we assume that people are like us. If we are poor, we assume other people live kind of similarly. If we are rich, we assume other people live kind of similarly. Our imaginations aren’t that good, it turns out.

So I’m curious about whether you identify as middle income or another category? Does it make you uncomfortable finding out where your income actually is according to the technical definitions?

If you’re upper class, upper income, does it feel uncomfortable to own that money story? Why is that? Is it because you worry that it makes you less relatable? Do you think some might think you don’t deserve it? Or are you looking ahead at the people who have more money and saying, “no, that’s what it really means to be wealthy?”

This show is about financial activism at the end of the day. Using our wallets to shape the world around us. How do you think it would help if you knew the truth behind your money story and behind the money stories of those around you? Something to think about!

So to recap, here’s what we covered today:
We talked about the technical definition of middle class. The textbook definition for any city or town, is you take the median income and then you multiply it by 67% to get the lower end and multiply it by 200% to get the upper end. That’s the technical definition of middle class and you can click on the link to the Pew Research income calculator to find out where you fall on the scale.
We also talked about the fuzzier, more vague definitions of middle class. Things like college education, occupation, and being able to afford leisure or not.
Most importantly, the take away today is to consider interrogating your money story. Trying to challenge some of the assumptions and casual ways that we smooth over aspects of our money story. So that when we are more accurate and honest about our money stories, we can understand other people’s money stories and then we can take a step back and start to see the patterns of the money stories of our communities, and how we can help.

If you have more time today, here’s another episode to check out…that's episode 134, five ways to be a financial ally at work.

Alright! I’d love to hear your thoughts on today’s episode. Reach out anytime at progressive pockets at gmail dot com, you might also want to sign up for the newsletter at progressive pockets dot com. I am going to be sharing a little more about my own experience of finding out that I was surrounded by rich people lol and I’ll include some links so you can find out more about your own money story.

If you’re new around here, there is a pretty deep catalog of episodes that you missed, so I hope you enjoy digging into those! Hit subscribe and you won’t miss upcoming episodes. 

Let’s end with a quote…

Knowing yourself is the beginning of all wisdom.

Aristotle