10 things the middle class won't tell you
1. There’s no such thing as the middle class.
There is no universal definition of the middle class. “It’s one of those relatively amorphous terms,” says Patrick O’Keefe, director of economic research at CohnReznick, an accounting and advisory firm. The Pew Research Center often uses the middle wealth quintile, the middle 20% of Americans’ income and wealth ($81,540 in 2013), to define this increasingly diverse, ever-changing group. Other economists have said it’s defined as making 50% above or below the median annual income, which was $54,332 in January 2015, according to Sentier Research, a group that tracks household income.
Americans regard a college education as a critical component to becoming middle class. Some 71% of people with a college degree consider themselves middle class versus just 58% of people with a high school diploma or less, according to a 2012 survey by Gallup. But this alone may not be enough to make people middle class on paper: Outstanding student loan balances in the U.S. exceed $1.2 trillion, more than any other type of household debt with the exception of mortgages, according to the Urban Institute, a nonprofit organization that focuses on social and economic policy.
“There’s not a one-size-fits-all for the American lifestyle,” says Mark Hamrick, Washington, D.C., bureau chief at personal finance site Bankrate.com. “Maybe there never was.” In the post-World War II era, it seemed it was a ‘Leave it to Beaver’ working father and stay-at-home mom who owned their own home — a powerful media construct at the time, he says. “These ideas are all in flux.” Even today, he adds, one person may view home ownership as necessary to claim membership of the middle class, while others might cite education. “The definition of a middle-class family tends to be aligned with popular images in the media,” Hamrick says.
And it isn’t just economists who are undecided. Mary-Ellen Kirkendall, 65, a retired oil-and-gas revenue analyst in Cape Cod, Mass., has a bachelor of arts degree in French with a minor in Russian, and a bachelor of science degree in computer science. Her father was a steelworker and her mother was a homemaker who later earned an associate degree. “I was the first person in my family to ever go to college,” she says. “My wife and I own a house and both have college degrees, we’ve both traveled and have an appreciation of the arts. But I still think of myself as hanging onto the lower middle class.”
2. Politicians are desperate to court us.
Despite this confusion, politicians frequently tout policies that will benefit the middle class. In his 2015 State of the Union address, President Barack Obama spoke about how to help this hard-to-define group. “Middle-class economics means helping working families feel more secure in a world of constant change,” he said. “That means helping folks afford child care, college, health care, a home, retirement.” It also includes higher wages, closing tax loopholes on the top 1% and building a competitive economy, the president said in his speech. There was no mention of the working class, underclass or lower class. Never mind the upper class, a source of funds for politicians.
One theory for Obama’s middle class-centric speech: People want to better themselves, but it isn’t always easy. Relative economic mobility is lowest for children who grew up in the Southeast and highest for those who grew up on the West Coast and in the Northeast, according to a 2013 report analyzing 741 commuting zones—“Where is the Land of Opportunity?”— by the National Bureau of Economic Research. Salt Lake City and Seattle have rates of mobility comparable to Denmark (11% chance of reaching the top fifth income quintile from the bottom fifth). Atlanta (4.5%) and Milwaukee (4.5%) have much lower rates of mobility.
Americans also look to their politicians to espouse “middle-class values” — which it left to the respondents to define — something that appears to be important ahead of the 2016 U.S. presidential election. Only 22% of people feel that President Obama represents middle-class values “very well,” according to one NBC/Wall Street Journal poll released last March; 18% said the same for potential Democratic presidential candidate Hillary Clinton and 4% did for possible rival Jeb Bush. Similarly, 15% of people said the Democratic Party represented the middle class “very well” versus just 7% for the Republican party.
3. As an economic group we’re shrinking…
Using middle-income as a barometer, middle-class membership has been falling over the last 40 years. The share of Americans who are part of middle-income households fell to 51% in 2013 from 61% in 1970, according to the Pew Research Center, a nonpartisan, nonprofit think tank. From 1990 to 2013, the share of adult Caucasians and Asians living in middle-income households decreased the most of any ethnic group, from 58% to 53% (for Caucasians) and from 56% to 50% (for Asians). The decline was less pronounced among Hispanics (from 48% to 47%) and African-Americans (from 47% to 45%).
The reasons are mixed. The share of the country that qualifies as lower income made up 29% of all households in 2013, up from 25% in 1970, but the official poverty rate — a person who lives on $11,770 a year or less — was 14.5% in 2013, down slightly from 15% in 2012, the first fall since 2006, according to the U.S. Census Bureau. And the share of upper income households increased to 20% in 2013 from 14% in 1970, Pew found. To qualify, household incomes had to earn $166,623 a year for upper income households, $71,014 a year for middle income and $23,659 a year for lower income.
Some economists see this change as positive. The number of middle-income households has been declining since the mid-1960s; not because more households were falling into a lower-income category, but because more households are moving up in the world, says Mark J. Perry, a professor of finance and business economics at the University of Michigan-Flint. But this may also be for demographic reasons that people may not be quick to celebrate: American households in 2015, “are smaller, have fewer earners on average, are more likely to be a retiree household on a fixed income and receive a greater share of their compensation in the form of non-taxable fringe benefits,” he adds.
4. …but those of us that are left are struggling.
Not everyone has recovered from the Great Recession. The median wealth has increased for the 90th percentile of society, but not for the “typical family” in the 50th percentile where half of Americans are richer and half are poorer, says Signe-Mary McKernan, an economist at the Urban Institute, an organization that focuses on social and economic policy. The wealth for people in the 90th percentile rose from an inflation-adjusted $230,000 in 1963 to $940,000 in 2013, while that of the typical family doubled to $80,150 from 1963 to 1983 and has remained stubbornly flat since then, she says.
Student debt and mortgage debt are holding many middle-class people back, McKernan adds. Mortgage debt was the major component of debt for families headed by individuals ages 55 or older, according to a January 2015 report by the nonpartisan Employee Benefit Research Institute. McKernan says it’s important for the middle class to build wealth. “It’s insurance against tough times, tuition to get a better job and education, capital to build a small business, savings to retire on,” she says. “Wealth translates to opportunity. Prosperity is not trickling down to middle-class families.”
Aside from the double-edged sword of stagnant wages and rising debt levels for many families, the U.S. economy does show signs of improvement in both employment levels and house values. Unemployment has declined since reaching a recent high of 10% in October 2010 and — for those who held on to their stock through the market downturn in 2008 — the stock market has exceeded pre-recession highs. Only 8% of borrowers, or 4.1 million homes, are currently underwater, down from a peak of 34%, or 17.6 million homes, in 2011, according to Black Knight Financial Services, which tracks mortgage performance.
5. Most people believe they are middle class.
Americans appear to buy into notions of a (somewhat) classless society. That is, the majority (87%) consider themselves as part of the middle class, a term that changes from person to person, based on how they feel about their income, education level and/or job, according to a survey of more than 1,500 adults conducted by the nonpartisan and nonprofit Pew Research Center. Some 47% say they are middle class, 29% lower-middle class, and 11% upper-middle class. Only 1% of people say they belong in the upper class, while 10% of people surveyed consider themselves lower class.
“A lot of Americans say, ‘I feel middle class,’” says Carly Sommerstein, 49, a Weehawken, N.J.-based production editor with a major book publisher. “Most Americans think they’re middle class.” But the cost of housing, education and child-rearing has lowered the bar for those who claim middle-class membership. “They may have been raised middle class, but we’re not living in that world anymore.” She bought an old home with her husband because it reminded her of the home she grew up in. “I try to create an illusion of middle-class prosperity for my child so he can have the middle-class life I had,” she says. This includes sending him to camp every summer and enrolling him in day care programs.
People tend to compare themselves to their friends, family and their neighbors, O’Keefe says. An upper middle-class person in a 2,600 square foot home in Beverly Hills, Calif. or Westchester, N.Y., for example, might see themselves as lower middle class if they had a similar sized home in a less salubrious neighborhood. And even those who are struggling financially might believe their college degree, tennis club membership or even their kitchen utensils and culinary skills distract them from the reality that they are probably worse off than they realize. “For most people, it’s the general community in which they live,” O’Keefe adds. “They’re basing it on their own experience rather than statistics.”
6. We can’t afford a nice house in your city
The middle-class dream of home ownership may be out of reach for Americans with a median income living in cities, including Sacramento, Calif., Miami, Portland, Ore., Denver, and New York. Residents in those areas must earn more than an estimated national median income of $48,604 in 11 of 27 major metropolitan areas to afford a home with a 20% down payment for a 30-year mortgage, according to HSH.com, a mortgage-information firm. On the upside, homeownership still became more affordable in 26 out of 27 metro areas in the fourth quarter of 2014 versus the previous quarter.
San Francisco was the least affordable metro area (requiring a $142,448 median income for a median home price of $742,900), followed by San Diego ($95,433 income) and Los Angeles ($89,665 income). What’s more, just 1 in 4 homes for sale in New York and Los Angeles and 1 in 7 in San Francisco are within reach of those earning the median household income in those cities, another study released last year by real estate website Trulia concluded. The Pittsburgh metro area required the lowest median income ($31,716 for a median home worth $135,000), followed by Cleveland and St. Louis.
People earning a median salary around the $50,000 mark would be hard pressed to find a spacious home in a good neighborhood in many cities, says Bankrate.com’s Hamrick. House prices are expected to rise between 3.5% and 5% this year and most economists predict wage growth of just 3% in-line with 2015, although Bankrate’s analysis predicts that mortgage rates will remain below the 5% mark throughout 2015. “You will rapidly feel like you are actually in a low-income household,” Hamrick adds. “You can get by most easily in the Midwest or states that have a lower cost tax structure.”
7. Government policies don’t really help us.
Some 72% of people say that, overall, the government’s policies since the 2008 recession have done little or nothing to help middle-class people, a March 2015 report by Pew found, and nearly as many say that government policies have provided little or no help for small businesses (according to 68% of the 1,500 people surveyed) and the poor (according to 65% of those polled). Some 62% said the economic system in this country unfairly favors powerful interests, while only one-third of those surveyed believe the system is fair to most Americans; these percentages have changed little over the past year.
“Policy recommendations that could help us reduce wealth inequality such as home and retirement savings and other automatic savings vehicles are stacked against low and middle income families,” says the Urban Institute’s McKernan. The mortgage interest deductions mostly go to the top fifth of tax filers, according to a 2010 report by the Tax Policy Center, a joint project of the Urban Institute and Brookings Institute, and What Works Collaborative. “It mostly provides an incentive to live in more expensive homes, not to own instead of rent,” the report found.
The current administration appears to disagree. Less than a month into his first term, President Obama signed into law the American Recovery and Reinvestment Act of 2009, which included measures to speed job creation and emergency unemployment compensation and a temporary 2% cut to the payroll tax for 160 million workers, according to the final report on those measures released in 2014 by the President’s Council of Economic Advisers. It said the Act “helped to avert a second Great Depression and made targeted investments that will pay dividends long after the Act has fully phased out.”
8. You try working and paying for child care.
Childcare is the biggest household expense for many Americans, according to Lynette Fraga, executive director of Child Care Aware of America, a nonprofit group in Arlington, Va., that works with state and local agencies. And the U.S. is one of the few industrialized nations that doesn't require paid family leave for new parents. The average annual cost of full-time care for an infant in center-based care ranges from $5,496 in Mississippi to $16,549 in Massachusetts, according to the group’s 2014 annual report. In most states this is higher than average annual tuition fees for a public four-year, in-state college ($8,893).
Every week, nearly 11 million children younger than age 5 whose parents are working are in some type of child care arrangement. On average, these children spend 36 hours a week there. Those costs add up, the Child Care Aware of America report concluded, and parents who can afford to stay at home need to balance the costs of child care with the benefits of being a stay-at-home parent. “For the U.S. to participate fully in the 21st-century global economy, it needs to think of child care as equally a workforce support for parents and early education for young children,” the report concluded.
Some, perhaps small, consolations: When asked whether a working mother can establish as warm and secure a relationship with her children as a stay-at-home mom, just 49% of people agreed in 1977 versus 70% currently, according to the General Social Survey released last year by University of Chicago’s National Opinion Research Center. However, 40% of mothers are the sole or primary source of income for the household, according to the Council of Economic Advisers, partly due to the rise of single moms, 65% of which participate in the labor force, and partly because more married women out-earn their husbands.
9. It takes more years to reach a median salary.
It takes the average worker until age 30 to earn the national median salary, up from 26 in 1980, according to a 2013 Georgetown University study, “Failure to Launch: Structural Shift and the New Lost Generation.” Young men have been hardest hit. As their access to blue-collar occupations has declined and they don’t have the entry requirements for career-track jobs. “You’re deferring middle-class lifestyles,” says Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “It’s just like these sitcoms on TV with all these kids [young adults in their 20s] living with each other.”
The “separation” rate—people quitting, getting laid off or discharged — was 3.4% in January, down from 3.5% in December 2014, although this was up from 3.2% in January 2014, according to the latest Bureau of Labor Statistics data. This increase in separations can be attributed almost exclusively to people deciding to quit their jobs to move to a new one, a sign of confidence in the economy, a spokesman for the Department of Labor says. There were about 4.8 million separations last January versus 5.1 million separations in 2006 and 3.9 million separations in 2011 at the height of the recession.
The unemployment rate hit 5.5% in February versus 6.7% a year ago. An average 25% “churn” or quit rate in the U.S. is regarded as dynamic by international standards, Carnevale says, especially as it is closer to 10% in many European countries. A high churn rate for a college education is typically seen as a reflection of a healthy economy as it shows that people have the confidence to quit their jobs for a better one and workers get the best wage hikes and reach higher seniority levels by moving companies. “Churn for young workers with high school education tends to minimize their earnings growth,” Carnevale adds.
10. We are doomed to repeat past mistakes.
The middle class is slowly regaining its confidence, but many people are putting more money on their credit cards than have since the end of the Great Recession. U.S. consumers added around $57 billion to their credit cards in 2014, the largest amount in the last six years and 47% more than the $38.8 billion the year before, according to research released in March 2015 by personal finance website CardHub.com. “Consumers have now racked up close to $180 billion in credit card debt following the nearly debt-neutral years of 2009 and 2010,” the report found.
Ken Steinbacher, 41, a college graduate and government employee in information technology in Portland, Ore., says many middle-class people rely on plastic, but doesn’t think it’s acceptable to complain if you are a homeowner with a college education: “Somebody else always has it worse.” But while consumer spending accounts for more than two-thirds of U.S. economic output and is a driver of economic growth, the average household’s credit card balance — nearly $7,200 as of the end of 2014 — is still edging closer to the $8,300, or what CardHub.com refers to as the “tipping point,” which was the average credit card balance in 2008.
And there are also signs that middle-class Americans are overusing their credit cards: 22% said they would have to make “significant lifestyle changes” if they took a scissors to their credit cards, according to a poll released last September of 1,878 credit-card users by the National Foundation for Credit Counseling, a nonprofit credit counseling organization. More worrying: Approximately 62% of Americans have no emergency savings for things such as a $1,000 emergency room visit or a $500 car repair, according to a January 2015 survey of 1,000 adults by personal finance website Bankrate.com.
But many Americans are living on a strict budget while keeping their eyes on the prize. Nora Elise Johnson, 26, from Seattle, moved to New York City nine years ago, to act. She found an apartment share for $500 a month, a steal by New York standards, and has $26,000 in student-related debt. “I’m putting in 45 hours a week of restaurant work, but I’m still auditioning, taking class and going to rehearsals,” she says. Johnson says a teacher asked her class if they ever considered doing something else, given the difficulties of the profession, but she only had to think about it for a brief moment. “This is the one thing that has made me incredibly happy,” she says.
1. Repulse Bay, Hong Kong
Price per square foot; $2,069
$1 million buys 483 square feet
2. Bondi Beach, Sydney
Price per square foot: $985
$1 million buys 1,016 square
3. Coronado Beach, Coronado, Calif.
Price per square foot: $715
$1 million buys 1,399 square feet
4. Waikiki Beach, Honolulu
Price per square foot: $597
$1 million buys 1,675 square feet 現実はこんなに安くないよ
5. Kitsilano Beach, Vancouver, Canada
Price per square foot: $453
$1 million buys 2,209 square feet
6. Huntington Beach, Calif.
Price per square foot: $427
$1 million buys 2,341 square feet
7. South Beach, Miami Beach, Fla.
Price per square foot: $400
$1 million buys 2,500 square feet
8. Ipanema Beach, Rio de Janeiro
Price per square foot: $371
$1 million buys 2,698 square feet
9. Brighton Beach, Brighton, U.K.
Price per square foot: $369
$1 million buys 2,713 square feet
10. Barceloneta Beach. Barcelona, Spain
Price per square foot: $330
$1 million buys 3,031 square feet
No one is certain, so take your pick. 笑った〜 分からないからテキトーに選んでって。
It's so Hawaiian!
The name may come from the Proto-Polynesian Sawaiki or "homeland" (some early explorers' accounts have the natives calling the place Hawaiki, a compound of hawa, "homeland," and ii, "small, active") or from Hawaii Loa, the Polynesian who tradition says discovered the islands.
Max Highway Speed: 60 mph
Excessive Speed Threshold: 80 mph, 30 mph above limit
Excessive Speed Mandatory Penalty: 6 hours community service or 2 days imprisonment, $500 fine, 30-day license suspension
Excessive Speed Maximum Penalty: 5 days imprisonment, $1000 fine, 30-day license suspension
Reckless Driving Threshold: none
Reckless Driving Mandatory Penalty: none; petty misdemeanor
Reckless Driving Maximum Penalty: 30 days imprisonment, $1000 fine, license revocation
Percentage of residents with $0 saved: 32% 貯蓄ゼロ
Percentage of residents with less than $1,000 saved: 61% 1000ドル無い人
About one-third of Hawaii’s residents have no savings, and nearly two-thirds have less than $1,000 saved — even though the state has one of the highest median household incomes in the nation.
Residents can blame the state's high cost of living, which makes Hawaii the No. 1 state where residents are most likely to live paycheck to paycheck.
According to GOBankingRates' findings, the average resident has less than 7 percent of each paycheck left over after paying for certain necessities. No wonder it's so hard to save money in this state.
アメリカ式のレス４５ と 日本式のレス５０ の表現の仕方が違うことに気付きました。
Percentage of residents with $0 saved: 32% 貯蓄ゼロが３２％
Percentage of residents with less than $1,000 saved: 61% 1000ドル無い人が６１％
61％のハワイの人の貯金額が 0 〜 1000 という意味で、貯金ゼロの31％の人は1000ドル未満の人々の中に入ってる
アメリカの ％ の表現の仕方って数学力ゼロのワタシには時々（正確にはいつも）こんがらがります。
Percentage of residents with $0 saved: 34%
Percentage of residents with less than $1,000 saved: 70%
Percentage of residents with $0 saved: 38%
Percentage of residents with less than $1,000 saved: 79%
1. Broomfield, Colorado
> Population: 65,065
> Median home value: $342,800
> Poverty rate: 4.6%
> Pct. with at least a bachelor’s degree: 56.1%
While popular legend has it that Honolulu is Hawaiian for “fair haven,” that explanation actually conflates two separate moments in the city’s history.
While the port was referred to as Fair Haven in English in the late 18th and early 19th centuries, the region’s original indigenous name, “Honolulu,” more accurately translates to “sheltered bay” or “protected bay.”
Honolulu is the only state capital with an autochthonous name,原住民のつけた名前、 and was founded by the indigenous people 先住民 of Hawaii as long as 2000 years ago.
44. Hawaii: $690,073 per year
- Entry-level earnings for top 1 percent: $281,620/year
-Average earnings of bottom 99 percent: $51,033/year
- Top 1 percent's share of income in the state: 11.9 percent
1. Connecticut: $2,402,339 per year 年収240万ドル越え！
The gaps between the top 1 percent and the bottom 99 percent are biggest of all in New York and Connecticut. In Connecticut, the wealthiest 1 percent earns 42.6 times what the rest of the state makes, on average. In the United States, the top 1 percent's average income is 30 times more than the average income of the bottom 99 percent.
After Jackson, Wyoming, the most unequal metro area in the United States is Bridgeport-Stamford-Norwalk, Connecticut, an area known as ・#156;the Gold Coast・#157; for its wealth, including health-fund fortunes.
- Entry-level for top 1 percent: $659,979/year
- Average earnings of bottom 99 percent: $56,445/year
- Top 1 percent's share of income in the state: 29.7 percent
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