What is Middle Class?

So while reading a book the other day, it noted that despite the common usage of the term ‘middle class’ there is no definition.  So of course I did a little Google of that fact and the author was entirely correct.  I came across many definitions of income ranges trying to lock down what exact is middle class.

Then I came across one idea that I liked.  Take the median family income in a given country and +/- 40% that is the middle class.  In Canada for 2012, the median family income was $74,540 per year.  Adding our range of +/- 40% results in a the middle class being from a family income of $44,724 to $104,356 per year.  That is a broad range that covers a huge number of families in Canada so I think it could easily work as a passing definition.

Yet what stuck me the most about those numbers was despite considering myself middle class for the majority of my life I in fact likely never been a part of it.  Growing up I always knew we weren’t poor by any stretch of the imagination, but at the same time we never had expensive cars, overly nice houses or only bought a run down tiny cabin as a vacation property when I was in university.  So I never felt very well off either.  Yet looking at those values and doing a bit of an inflation adjustment, I was forced to conclude I grew up above the middle class.  Now that I’ve grown up and I have my own family that has largely continued.  Ironically other than a few of the early years of my career, our family income was also above that upper end of the middle class range.

Of course the problem of making a definition dependent on income is it ignores the fact I don’t spend the majority of my income.  Instead we save the majority of it and we spend on average a little under $30,000 per year, which of course is under the lower end of that range.  So which is it – am I’m under the middle class or over it?

In the end, the answer doesn’t matter.  Middle class is a way of referring to the majority of the people, not the upper class or even the poor.  It’s merely the bulk of the people who are trying to get through life.  It’s somewhat of a fiction which becomes useful to the political class since they can refer to the majority and allow even those on the edges to include themselves if they want.  Sort of like I have for most of my life.

Yet as we continue to save for early retirement I also become more aware that I have less and less in common with the middle class.  I don’t kiss ass or cower to those in a higher position than me at work.  I don’t fear losing my job since I have a decade of spending cash saved up.  I don’t try to blend in with my neighbours and I certainly don’t try to keep up with the Joneses.  In short,  I do what I want because I want to…nothing more and nothing less.

So I’m not middle class, but I’m not sure what label to us anymore and I’m not sure I even really care.  Labels are at best a crude picture of a person…a stick figure that lacks any meaningful detail.  So perhaps the answer is just be myself and let others call me what they will.

Do you ever worry what class you are?  Why or why not?

15 thoughts on “What is Middle Class?”

  1. If you’re consistently in the top 10% of incomes, I hate to break it to you: you’re upper class. The fact that you don’t spend much of you income makes you even more upper class! You say labels don’t matter much to you, so accept the facts and take the label!

    We’re middle class, spend about the same as you, and I’m not too worried about it.

  2. I do worry about what class I’m in, but I probably shouldn’t. I’m competitive by nature, and if I’m being honest I probably look to measure myself against other people more than I should. I do have the will power to not try and keep up with the Jones.

    Upper, Middle, Lower, while I respect your definition I like to think that it just to simplistic to determine how your life is shaping up (I’m sure you’d agree). Based on your last paragraph, and reading your blog, I know that you are in the upper class. Cash flow isn’t everything (but it is good :)), you can do whatever you want, If you wanted to go out and buy a 100k sports car, you could… just knowing you could do that is good enough to tell you that you are upper class. You can golf when you want, go out to dinner if you want, quit your job if you want… you have freedom man! Sky’s the limit, that makes you upper class!

  3. Labels never really worked for us. Yes, income wise (230k gross before I ER’ed) we were decidedly in the upper classes… but our our outward lifestyle suggested that perhaps we pulled in around 50k. Were we upper class based on our income, or lower middle class based on our lifestyle? Doesn’t matter… following for this arrangement for 10 years allowed me to finally ER 2 weeks ago at the tender age of 42. 🙂

  4. It’s interesting that the range is so high (+/- 40%).

    In the end I don’t think it really matters which class you’re in. As long as you keep saving more money than you’re earning, you’ll be in good hands in the long run.

  5. Hey I fit into that $44,724 to $104,356 group 🙂 But then again that kind of income range for a single person like myself goes a lot further than say a family of 5, yet both are considered to be a ‘household.’

    “The desire for high status is never stronger than in situations where “ordinary” life fails to answer a median need for dignity and comfort.”
    ? Alain de Botton

  6. Hey jon_snow,
    Love your moniker by the way, you sound very similar in age, previous gross income and savings of where my spouse and I are at right now minus 5 years. Being 37 now, we are also interested in ER, can I ask what multiple your nest egg represents of your pre-retirement spending? Thanks!

  7. 1%’er here I guess according to this breakdown: http://www.cbc.ca/news/canada/who-are-canada-s-top-1-1.1703321
    And a further anomaly with being a single female vs. household or male. Also come from a family that was probably in the 1%’ers in terms of assets and bottom quintile, likely bottom 5% in terms of spending.
    And no, I don’t really care either.
    I think I would rather have say double the enjoyment compared to the average person from working on an interesting and challenging project and measure myself that way. Although oddly, if you do that often enough, the income seems to follow.
    I’d also like to be in the top 1% for total annual donations, that seems like a comparative I could get behind.
    Another thing that I find super interesting – why is there such a focus on low ages for reaching FI? Is that a different form of “status” (like I am so incredibly kick-ass compared to the general population the earlier I cut the employment cord)? ALL of the ER-ish blogger types seem super focused on age of retirement. Thinking of Pete Adeney+Simi/MMM here (going into self-employment) at 30, Jacob at 33 or something like that, the “retire at/by 40” guy, Fuego/Justin/Root of Good at 33… And why do these guys so barely mention their spouses contribution to the cause (which seems huge to me as a singleton – just in terms of security)? Just one of those things that seems so odd and looks like peacock posturing. Is this just a guy/ego thing maybe?

  8. Ego, guy thing… lol.

    Who wouldn’t want to retire in their 40’s with a healthy, able body… as to opposed to one that starting to creak and break down in one’s late 50’s, early 60’s?

    Seems pretty logical to me.

  9. Even though I retired 6 years ago at 45, have a NW of slightly over $1M, and am FI, I don’t really “feel” middle class. Meanwhile, my younger brother has his own business, makes a lot of money but has a huge mortgage on his McMansion he lives in with his wife and son. He surely “looks” more upper-middle class from the outside than I do even if his NW is lower than mine. Do labels really mean anything?

  10. Oops forgot Nahirny at 36, so not just a guy thing – and Foster at 33. Maybe just a numbers orientation or that speed is compelling and helps to sell books.

    LOL – That’s my argument for advocating for Tim to go semi-ER sooner rather than later! He’s got the float now to make it work. Do it while you’re younger and energetic, less risk-averse, more marketable – and don’t wait for complete burnout/work loathing to set in. Plus he’d make way more hourly as a consultant/contractor, especially the longer he stays in his field, he’d see his rate go up quite dramatically from 40-45-50 I’d bet. Work half as much, get paid the same (annualized) as now and spend way more time with the kids while they’re young. All project work too which is way more enjoyable. He’s got a profession tailor made for that option IMO. I know quite a few people who are FI who are doing this and heading off to MX for the winter or traveling/doing the cottage thing all summer. They all really look forward to the variety of work/not work and are much happier it seems than the “stay until my pension vests/job-lock” types.

  11. Do you define class in terms of income, education, or consumption?

    I work in an upper middle class environment, and in terms of pure income, this is the year I will hit the 1% for the first time in my life. But I find that definition rather meaningless. Money is just a tool. Its presense or absence in your life says nothing about your value as a person. I have met blue-collar people who have a lot of it, and I have met people with Ph.D.s who have very little of it.

    So is middle class based on consumption? I always figured the upper middle class plays golf, eats in restaurants, belongs to a club, owns a house, drives an SUV, and sends their kids to Montessori school, whereas the “regular” middle class has two people working “lifestyle” jobs with regular hours, owns a smaller house, still sometimes goes to restaurant, and drives two three-year old Camrys. I don’t do any of those things. I walk most places, have a single 10-year old car in the family, happily live in an apartment condo with a spouse and kiddies, and brown-bag my lunch. My secretary consumes more than I do. Does that make me lower middle class?

    My preferred definition has always been tied to education. Truly upper-class people are intellectually curious. See the the rise of the “Bildungsbürgertum” in Europe 200 years ago: http://en.wikipedia.org/wiki/Bildungsb%C3%BCrgertum
    Or, at the opposite end, see the development of a new precariat in modern times: http://en.wikipedia.org/wiki/Precariat

    Or, in simpler terms: The lower class talks about people, the middle class talks about things, the upper class talks about ideas.

    As a general rule, everybody purports to be middle class. Nobody wants to admit being lower class because its a value judgment. Nobody wants to admit being upper-class because it seems snooty.

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