Continuing on that compare and contrast of the middle class, both now and “then”, I began to wonder what, exactly, the middle class is.
Here’s a good definition of the middle class:
MIT economist Frank Levy believes that those in the middle class have enough money to afford the basic building blocks of a good life, including a house, a car and money to pay necessary bills. He suggests that families in their prime earning years are middle class if they fall between $30,000 and $90,000.
I like that as a working definition; simple, easy to visualize and a well understood process from taking $50-90k in today’s money and pivoting backwards to “yesterday’s” money.
However, I couldn’t help but wonder if there wasn’t another definition. Maybe something surrounding what we consider the “American Dream”. I’ve always thought that middle class was being able to have “some” nice things. Kinda like, a car, maybe two. Own your own house with the “white picket fence”. Send your kids to college.
Maybe what we need to do is identify a specific basket of goods and see how much money the middle class family has left over. Maybe both.