The middle class is shrinking in most countries, with a median income between two-thirds and twice the national median income. This has made a middle-class lifestyle out of reach for many, as they lack enough money to own a home, save for retirement, provide a college education for their children, and have health. The Middle Class Monitor, launched by the Pew Research Center, presents objective data across five key domains: money, time, and inflation.
Middle-class families have been struggling for decades due to stagnant income growth and rising prices. However, the pandemic has caused a strange economy where a secure, middle-class lifestyle receded for many, but the material trappings of middle-class success became affordable to many. Inflation is scrambling Americans’ perceptions of middle-class life, and many feel that a middle-class lifestyle is out of reach. Income stagnation and rising living costs, such as housing, have limited growth in many regions. Just over a third of Americans meet all six markers of a middle-class lifestyle, and while 9 in 10 Americans have health insurance, only three have.
Rising housing costs, tuition fees, healthcare expenses, and inflation could make life tougher for middle-class families in the next five years. Buying a home may be the greatest example of middle-class life, and as the financial divide grows, a smaller share of Americans now live in middle-class households.
📹 ARE YOU (actually) MIDDLE CLASS? | Income, Lifestyle & Net Worth USA vs. Germany
Video Highlights: 00:00 Introduction 01:45 What does it mean to be “Middle Class”? 11:36 Net Worth of the Middle Class 17:45 …
What is the middle class salary?
In 2022, the national middle-income range for a household of three was $56, 600 to $169, 800 annually. Lower-income households had incomes less than $56, 600, while upper-income households had incomes greater than $169, 800. The median adjusted household income was based on household heads, regardless of age. These income ranges vary with the cost of living in metropolitan areas and household size.
Households in higher-than-average areas or with more than three people need more than $56, 600 to be considered middle-income, while those in less expensive areas or with fewer than three people need less than $56, 600.
How would you describe a middle class lifestyle?
The middle class lifestyle is a social and economic concept encompassing aspects such as stable employment, homeownership, access to education and healthcare, and a comfortable standard of living. It emerged during a time of industrial growth and urbanization, leading to increased disposable income, consumerism, and a focus on family values and social mobility. The rise of the middle class in the 19th century was primarily driven by industrialization, creating new jobs and increased wages.
Middle-class families prioritized home ownership as a symbol of stability and success. Education became more accessible, leading to higher literacy rates and professional careers. Leisure activities like theater and recreational sports became popular among middle-class families. The middle class played a significant role in shaping cultural norms and values, emphasizing family life, personal responsibility, and community involvement.
Why is middle class struggling?
Inflation is driving up costs like mortgage rates and rental prices, causing housing costs to squeeze budgets. Other expenses are also rising, and experts predict that by next year, the middle class may find it increasingly difficult to keep up with rising payments. The current economy is changing everyone’s long-term plans, and experts warn that by next year, the middle class might find it increasingly difficult to keep up with rising payments.
Why is a middle class lifestyle out of reach for so many?
The accelerated increase in the cost of essential goods has resulted in the emergence of a distinctive economic landscape, wherein the attainment of a middle-class lifestyle has become increasingly challenging for many, while the accumulation of material possessions has become a realistic prospect for a majority of individuals.
Is 200k a year middle class?
The definition of middle class in the U. S. depends on the state where you live, with some states allowing individuals to earn over $150, 000 without being considered middle class. GOBankingRates determined the income range needed to qualify as middle class in all 50 states using 2022 Census Bureau data. In Maryland and New Jersey, the high end of the middle-class income range is close to $200, 000. In Maryland, an income between $65, 641 and $196, 922 is considered middle class, while in New Jersey, it ranges from $64, 751 to $194, 252.
Is middle class disappearing?
A study by a Washington-based nonpartisan fact tank revealed that the share of Americans living in middle-class households has decreased from 61% in 1971 to 51% in 2023. Meanwhile, the share of Americans living in lower income households has increased from 27% to 30%, while the share of individuals in upper income households has increased from 11% to 19%. The wealth gap between Americans has deepened in recent decades, exacerbating inequality. While all income tiers have higher incomes in 2023, upper-income households have grown faster than the middle class since the 1970s.
What is considered upper middle class lifestyle?
The American upper middle class is a group of white-collar professionals with above-average personal incomes, advanced educational degrees, and high job satisfaction. Their main occupational tasks include conceptualizing, consulting, and instruction. These professionals are highly educated and often work in various professions, such as physicians, dentists, lawyers, military officers, economists, business analysts, urban planners, university professors, architects, stockbrokers, psychologists, scientists, managers, accountants, engineers, actuaries, statisticians, pharmacists, high-level civil servants, and the intelligentsia.
Education is a crucial aspect of middle-class childrearing, as parents expect their children to attend college. They view educational performance and attainment as necessary components of financial success, and most children assume they will attend college. This belief is especially evident among parents with higher education, who appreciate autonomy and want the same for their children. Most people in this socio-economic class have a high regard for higher education, particularly towards Ivy League colleges and other top-tier schools in the United States. They strive for themselves and their children to obtain graduate or at least four-year undergraduate degrees, reflecting the importance placed on education by middle-class families.
Why are average Americans struggling?
A MarketWatch Guides survey revealed that high inflation, record household debt, and average salaries not keeping up with the rising cost of living are negatively impacting Americans’ overall feelings of financial security. Despite younger generations becoming more financially responsible, feeling financially secure seems to be out of reach for many. The survey surveyed 2, 000 Americans to gauge generational attitudes about money, and found that 48.
6% of Americans consider themselves “broke” and 66. 2 feel they are “living paycheck to paycheck”. A gender gap was found, with females more likely to consider themselves “broke” at 55. 8, compared to males at 41. 1. Americans need an average of $17, 430 in savings to feel financially secure, despite the average annual salary of $61, 659.
What makes a person middle class?
The middle class, as defined by the OECD, refers to households with income between 75 and 200 of the median national income. Marxism defines social classes based on their relationship with the means of production, including the possession of means of production, its role in social labor organization, and the distribution of wealth and resources. The term has been used in various ways, including for the bourgeoisie, which emerged between the aristocracy and the proletariat during feudalism.
In modern developed countries, the petty bourgeoisie consists of owners of small to medium-sized businesses, who derive their income from the exploitation of wage-laborers. The highly educated professional class, such as doctors, engineers, architects, lawyers, and university professors, is considered the “middle class” between the ruling capitalist “owners of the means of production” and the working class.
Franca, an American Marxist theoretician, defined the middle class as “the class of independent small enterprisers, owners of productive property from which a livelihood is derived”. This category includes propertyless tenant farmers and salaried managerial and supervisory employees, but not propertyless tenant farmers. Fraina speculated that the entire category of salaried employees might be described as a “new middle class” in economic terms, but this remained a social grouping with most members being a new proletariat.
How do Americans define a middle class lifestyle and why can’t reach it?
The Pew Research Center defines a middle-class income range of $67, 819 to $203, 458 for a family of four in 2022. However, most Americans consider the lower end of this range, between $75, 000 and $100, 000, to be middle class. Despite this, the majority of middle-income Americans lack the security associated with the middle class. Those who do have it tend to be older, have higher incomes, have a college education, and own their homes. Additionally, homeowners over 30 are more likely to be financially secure.
What are 3 characteristics of the middle class?
The middle class in the U. S. is a socio-economic category characterized by individuals with incomes that fall within the median range for their geographic area. This group typically includes white-collar professionals or those who run their own businesses, typically possessing college degrees, owning their homes, and having adequate health insurance. They may also have disposable income after meeting all basic needs and are saving towards retirement.
The definition of the middle class is not precise, but it is generally considered sufficient for individuals to live a comfortable lifestyle. More than half of Americans are typically classified as middle class.
📹 20 Things The Middle Class Can’t Afford Anymore
The U.S. middle class is losing ground financially, and in today’s video, we’re going to expose a list of things middle-income …
I think this is fascinating. I live in the netherlands and i’m definately part of the poor, living on welfare level. Yet i have a cute small rental house with a garden, i have no trouble affording healthcare and i do go on holiday at least once a year (granted, only a week and staying in a hostel but it is a holiday). I don’t own a car but i can get everywhere with my bike and public transport. There is lots of stuff i can’t afford, but that’s okay, as long as i can eat and get my nesessities. I also have 0 debt.
German speaking countries have an education system that is WAY different from the US. There are extensive standardised vocational training programs that start after high school. It’s called Berufsausbildung or Berufslehre. This generates a large group of Facharbeiter (skilled craftsmen). So for most technical and standard office jobs you don’t need a university degree in Switzerland, Germany, Austria. And yes vocational training is free. You even get paid for the practical work you do in your company (paid apprenticeship)
Friedrich Merz, leader of the cdu, ex ceo of blackrock germany(?) and probably within the top 1% defines himself as middle class. basically all his “friends” have bigger or more private planes so he cant be rich. that is probably also the reason why he is so bad at communicating towards people who do not own private jets because he thinks he is average and everyone has to deal with the same type of problems as he does.
For Germans I think saying “I am middle-class” will usually be “no, I don’t want to say, that I am rich”. Showing off was traditionally a bad habit. Even the richest people in Germany don’t show this to the public. As about half of Germans have an apprenticeship there are many master craftsmen (and craftswomen) who run a small business and are very important for the economy and “Handwerk hat goldenen Boden” (craftsmenship has a golden floor).
As a poor student in a tiny shabby shared apartment, life felt interesting and full of chances. After nearly 30 years of professional activity, I‘m definitely middle class. Btw, I’ve never owned a home, and own only a very small car – but always more than just one bicycle. When I retire, I‘ll probably feel upper class – it‘s only the rich who don‘t have to work, right? 🎉
at least in The Netherlands remaining middle class also depends on strenght of family network. Much more than in the US. You might not on your own achieve all these markers, or maybe work in a low paid “passion” field, but your family (wealth and network) will provide the Housing and fund the Higher education of the grandchildren. Health is a universal benefit, so doesn’t signify. Germany might be similar.
I’m french, i feel myself in the middle class, and for me owning my home is not a criteria to define me as middle class. It’s more my “purchase power” : can i buy what a need to live, to eat, to wear, to travel, to entertain, and trying to save for non predictable incidents and for extra retirement… Without having to make a huge attention at all costs. As i’m protected by healthcare, health costs aren’t an issues, allowing to be relaxed on other expense. I feel myself comfortable, and lucky with my revenu. But Are your sure about your numbers, didn’t it mixed median and average/mean incomes ? I’ve read other official sources that show a median income about half the numbers you noted for Germany (France is close by the way). Median is not the mean.
This is a really fascinating article! I’ve lived in many parts of the class spectrum during my life. My grandparents always had beautiful houses and for most of their marriage had the three H’s, at least from what I could see. They both came from humble beginnings, had a nice long marriage in the upper middle class, and then my grandfather spent his last few years in a 55 and over mobile home park… living with my mom. Seeing my grandparents’ fall from financial grace was shocking. Our family legacy, that we all expected to be there later, just disappeared. Now that I think about it, their house was their biggest asset and they always ended up selling just a little too early. In their last nice place before the mobile home park, they made the mistake of buying a condo on a golf course and their HOA fees went from being $500 per month (when they moved in) all the way up to $1,100 per month and they could no longer afford the monthly costs. As much as we value home ownership here in the US, it’s important to make sure that investment is going take care of us in the future.
You are missing out the entire German field of skilled trades and their steps of education, from apprenticeships through to master’s certificates (without which you may not work as an independent electrician, mechanic and a thousand other trades). The skilled trades structure is more important to the German Wohlstand and the middle classes than a university education – particularly as becoming a master takes many years and involves learning such things as business law, employment law and man-management and many other aspects of the discipline that a mere graduate only comes across far later in the work-place. Also, many apprenticeships require today a high school diploma (Abitur) – for example Mediangestalter Bild und Ton – in order to be accepted.
Lower Lower: Jail or Homeless Middle Lower: 100% dependent on government Upper Lower: Partially dependent on government Lower Middle: Not dependent on government, but rent or owe more on their home than they have in assets Middle Middle: Own more in assets than they owe on their home Upper Middle: Own 2 paid off houses Lower Upper: Don’t have to work, but work because they want to. At least 2.5 million in assets Middle Upper: At least 10 million in assets Upper Upper: At least 100 million in assets
My experience living in the US is by no means typical, but having recently retired, I’ve been perusal article presentations advising retirees how to manage their finances. Two programs were of particular interest to me, because they began by determining which economic class you belong to (lower middle class, middle class, upper middle class, upper class, and wealthy). As in your presentation, these rankings were based not how one lived, but by one’s *net worth*, which is a much more reliable metric. I had always assumed that with a fairly average income and not a lot of expensive things, I must fit squarely in the “middle class” category, just as my parents had. Imagine my surprise upon finding out that according to both ranking systems, my net worth actually places me well within “upper class” group (people with a net worth in excess of $700,000). The only higher category was the “wealthy” class, whose net worth was estimated at 1.3 million dollars or more. When I hear the words “upper class”, I picture people who drive expensive cars, live in large homes, own a nice boat, etc. But it turns out that despite their lifestyles, many of those individuals have a net worth far lower than mine because everything they own is heavily financed. If they were to lose their jobs, they would lose their homes and have to liquidate all their other assets in order to pay off their debts. By contrast, the only debt I’ve ever incurred was a mortgage on my first home that I paid off in just 11 years.
Being middle class does take more money in the US than a lot of people think. Car dependency, expensive higher education, expensive housing, expensive health insurance, (depending on who one works for), expensive home and car repairs and saving for retirement because Social Security benefits may be insufficient all contribute to people’s inability to save money substantially.
As an American, life experience and observation has shown me that our “education” system is at the very core of our problems. Be it earning expectations after college, work required to achieve middle class income, or lack of actually knowing how to do anything with our hands. Removing vocational classes out of our high schools has been one of our greatest mistakes educationally. We have pushed our children into four year universities whether they could afford it or were ready academically ready. The parents are usually the ones to incur the loan debt thus removing a large monthly portion of their income.
So the take-away is, once again, – most people need to and must work, – having and hanging on to a manufacturing industry is mandatory, not optional, – that manufacturing industry needs to remain diverse – once a job has gone offshore it’s not going to come back, – service industry as a successor to manufacturing is a red herring. Even Walmart can only employ so many greeters. There is a wisecrack I have read some time ago. It is a bit difficult to translate, though. You are “wohlhabend” (prosperous?) when your income reliably exceeds your expenses. You are “vermögend” (wealthy?) when you don’t have to work to achieve this state of personal economics. You are “reich” (rich!) when you need professional help to keep track of your assets. The first category (and maybe a half) would also make a definition for middle class. Of course, this is also relative, as you have already pointed out. One can be middle class or even “vermögend” on a somewhat lower income, and struggling as a higher income wastrel. Middle class is also a state of mind and of aspirations.
In Sweden middle class is defined by education mainly. It has consequences for income that’s for sure, but my friend that is a plummer and has his own firm, has a high income but consider himself working class. But a female friend that is a librarian has a low income but see herself as upper-middle. I would call it “cultural capital”.
Thank you, Ashton! As a German I’d like to add the following. Rental prices in Germany are exploding and this is hitting the lower income groups in particular, who usually have to spend half of their net income on rent. This is a form of impoverishment that affects the reality of many people’s lives but is hardly ever discussed. Especially by politicians.
In Croatia more then 95% ppl are homeowners. Ppl rent when going to colege or 1-2 years until they save up for a down-payment. Healthcare is universal, meaning everyone is equally insured and high education is free if you don’t fail a year all up to masters degree. Seaside is really close and there are busses running day long excursions for 20E a person. Meaning anyone can take a days holiday that way. So by US definition we are almost all atleast middle class. Ask ppl and some would disagree.
just a few aspects defining income/wealth: – every German (as opposed to Americans) is born with a minimum lifetime income/asset called Bürgergeld – if you put the monetary value of this at only 1000.-/month, he has a net worth of 80 (years life span) times 12 (months) times 1000.- Euros = 960.000.- Euros *from birth*! – now add free education including tertiary education in Germany, which easily adds another 250 grand, if you compare it to American individuals and their costs to finance the same. – and then there is retirement costs: Americans have to save up for retirement, and these savings are counted as assets when calculating their net worth, whereas in Germany, at least the entitlement to staatliche Pension is not counted as assets. so, in this comparison, we are also runnung into the same difficulties as you did when comparing incomes (which, by the way, you did a really great job at!)
The middle class is not what you earn, own, how educated you are, where you live, the middle class is the demographic that has ability to change governments, effect policy and political outcomes. Middle class means you are not reliant on government welfare. It’s the middle class that scares the elites, without a true middle class democracy ceases to exist. We are seeing the hollowing out of the middle class and many people falling into poverty meaning more people are now reliant on government. The middle class is going extinct as with democracy.
Hello, a German here. I live a little bit to the north of you close to Heidelberg. First of all i wanted to say thank you for all the articles you made so far, keep up the great work. I stumbled across this website about 1,5 weeks ago and now watched a lot of the articles. Thanks for all the data oriented comparisons, also the family stories are simply adorable and fascinating. Now regarding an aspect of the article: Germany has a good social and healthcare net. But I think the whole retirement system is deeply flawed, as it basically only distributes what comes in to the current retirees. For years the system needs to be stabilized by tax money (this is actually the largest single position in the Bundeshaushalt every year). I don’t understand why my fellow German millennials accept this system, after all we pay for something that we likely will not get anything out of. At least I’m pretty certain that this system will implode in the next decade or so, when most of the Boomer generation is in retirement. At least if there not substantial changes to the system. To me this also means the whole net worth calculation for Germans is deeply flawed. Also the reliance of Germans on saving accounts is a big problem. We overvalue security and have to low of a yield, which forces us into higher saving rates. In that sense I think it is a good thing that Americans are more reliant on the equity and properties (it they can afford it in the first place of course). I would love to have something like a 401k.
Am I middle class in Europe? I’d like to think so. I am over half way paying off the mortgage on my house, I have a good car parked in front of it and I can say with certainty that I’m spending more on my plane ticket alone than the average German apparently spends on their entire holiday. However, I never did any tertiary education although I’ve been holding jobs this last decade that usually do list that as a requirement in the job postings. The big threat for the future however is extreme capitalism. When you look at the distribution of wealth and you look at how that is evolving, you see that more and more wealth is going to fewer and fewer people and unfortunately, the middle class in itself can’t correct that.
i think the end of the article hints at the problem with the middle class… the reality is…there arent 3 classes in society – there are 2: the working class and the owner class the middle class is a device to pit the majority of the working class against their peers in a struggle to maintain their relative wealth rather than unite with them to curtail the further accumulation of wealth in the owner class it is a classic divide and conquer approach and focuses on a desperate desire to not be poor rather than an effort to ensure that there is as little poverty as possible… as long as the focus is that “middle class” … the poor will always be required, otherwise there is no one to compare against the few times you mentioned the upper class in context, you even pointed out that the majority of their wealth came from business investments and other owned assets, which survive the bust section of the typical boom&bust cycle in capitalism more easily
If the the middle class shrinks to much, it has detrimental consequences for democratic stability. This what ones gave birth to terrible ideologies on the left and right that culminated in ww2 and Cold War. It creates divides in society that’s hard to over come. Whether it has to do with jealousy or tribalism, it often steams from the lack of the balancing force of a large middle class. If you look an all the countries in the world, the countries that’s considered stable more often than not have a large middle class. And with the stability comes usually prosperity, if this wealth is to unevenly spread through society you will have problem again, but with here in comes the second problem. You can’t spread it to evenly because then you will stifle growth and the wealth will shrink instead. So the middle class is important, very important!
Interesting! It is very hard to compare countries with different systems. I do not own my pension funds, but it provides me with a decent income until death. On paper it simply isn’t there, I cannot leave it to my family, and cannot cash it. And at 15:17 another aspect is illustrated. Dutch people keep a mortgage on their house for taxation reasons. Even if the house is fully paid, they take a mortgage for improvement or even to spend the money for other things, like an envelope for the (grand)kids. There is a lot of ‘silent wealth’, people living in normal houses, with a small car, not showing off in anything, yet their offspring doesn’t have to worry about their future. Slowly family capital moves to the next generation.
Middle class is a function of net worth – having a net worth of $2MM and an annual combined gross income of $500k… coming from blue collar income families, we didn’t marry until we both attained our master degrees and had both started and then progressed in our respective careers… we didn’t even consider children until 10 yrs after marrying, now in our late 50s, our children are in early into their college and late in their HS careers, respectfully . We consciously chose to delay the “normal” early marriage milestones, so that we could rise above the “norms” of the social-economy demographics in which we grew up, thus altering our family’s go-forward economic trajectory….
For a 100k you’ll get a small old flat or the property to build a house on it where I live. The type of house I’m looking for (nothing extraordinary) rose from 300k fifteen years ago to 400k-600k nowadays. Therefore I’m paying rent till I’ve found the property I’ll want to pay that much. I’ve bought a flat and a house in the past (300-400k each), but they weren’t for me in the long run.
My experience is that in the US expenditures swing much more than they do in Germany on a monthly basis, and you either have the built-up reserve, to plan for those swings, or if you don’t, it leaves you very exposed financially, exposed in a way that I just did not ever have to consider in Europe. Healthcare is the obvious cause and example, but there are many others. If a household with four adults (two parents, two adult children, still being supported) needs 4 cars, there is more variation to be expected than in a similar household with one car and 4 monthly bus passes (and that is just the financial side, not discussing the environmental footprint here). Education costs vary every year as people choose new career paths, jobs are less secure, and so temporary loss of income is more likely. But there are other things. Fluctuations in tax law with major implications for a specific household are much more frequent (your annual property tax just increased by $ 4000, due next month, oops – that kind of stuff), your gym was bought out, now your annual costs are $ 450 higher, here is the bill. Every once in while there is a windfall, I just got a $ 1800 check from the dentist, because the insurance had actually paid more than had been assessed, occasionally a bonus gets paid, or a financial investment pays out something. it can happen, once in a blue moon. But the bottom line is, the reserve you need to build up, to deal with these ‘constant surprises and swings’ is completely different than it was in EU.
Perspective is soooo important. My parents consider themselves as middle class, but they are retired and by income they are clearly in the low class or lower middle class. But they have assets, so they can still live a comfortable middle class lifestyle. In stark contrast, my wife and I technically broke into the top 10% of household income for our local area. But we were in debt for a long time, and have little in the way of assets, so while our income is high at the moment, we would still consider ourselves middle to lower middle class for our area. If we can keep that income up over time we would break out of this. But at the moment, 1 year of high income doesn’t make us rich in spite of technically putting us in a higher class. Point is, when looking at defining “middle class” you need to average income out over time, and weight assets over income as people age. Another huge issue is defining a person’s class by their lifestyle. Out plan is to break out of the middle class over time… But we don’t value having a fancy house or new cars. Both of our cars are more than 10 years old, and we aren’t planning to replace either of them any time soon… But they are paid off. We have an older 1950s home, but as our kids age and eventuallyove out, we aren’t super motivated to move into a newer, nicer, larger home. My house is my hobby project, so moving into a nice new house removes a lot of my hobbies. So even when we break out of middle class income and assets, we will likely retain middle class lifestyle.
Social permeability has definitely taken a hit. There is a psychological effect that one weights only their own problems and is not aware of the struggles of lower classes – because it’s not where you want to be going, you want to be going up. And so each class is looking above and using their means to bring attention to it. Higher classes have more social and economic capital to highlight their issues and we can see an ever accelerating swing in favour of the wealthy (taxload, education accessibility etc.) we can see an acceleration in the economic division.
Interesting about the three “h”s. Would have loved a marker like that for germany, as theese do not really apply. Everybody has healthcare, higher education is only expensive as in “you do not start to earn until you are done” and then there are student loans for low income families – of which only up to 10.000 Euros need to be paid back.
Interesting article so thank for the insights. I think its a very challenging comparison when comparing the US to European country as the government entitlement systems vary significantly. With that said I will speak to the US perspective. I’m approaching retirement so I spent significant time planing for my retirement and “legacy” to had off to my children. I’ve been fortunate to have both a frugal mindset as well as timing (GenX). When I began my retirement planning I no thoughts of leaving or having to leave a “legacy” for my children. But the realization of the costs of secondary education (debt) and the elimination of “easy” wealth generation (owning a home) have made it a priority for me to ensure I leave some savings behind. I honestly do not believe the rising cost of education and housing are sustainable. We are also seeing an increase in corporate home ownership which will not bowed well for the rental markets as these companies need to show continued profits and growth (i.e. rent increases fast then inflation and earnings). I hate to the pessimist but the middle-class in the US will continue to expand downward.
Such an interesting topic again! We too identify as middle class. But both my husband and me have noticed recently that when it comes to wealth, both our parents were higher up in the middle class ranking than we are. Although we have a better education and better jobs. It’s the same for most of our (academic) friends. We can hold but very seldomly surpass our parent’s ranking. ( 24:47 Which does not count for the upper class of course). And our own adult children don’t even care. They don’t see any value in being part of the middle class at all. They want more from life in terms of freedom etc. Ist this a good thing? I don’t know.. maybe it is.
It’s interesting to think of classes in terms other than economic. The social perspective makes total sense, too. Based on the Middle class scale shown in the article, we would probably be classified as lower middle class. And we do consider ourselves as such, even if for just the social context; we own our home (2 actually), 2 vehicles, and can afford a vacation once a year. However, 5 years ago we relocated to a state that has a considerable lower cost of living, and even with larger salaries we often find ourselves struggling more than we did
Middle class is relative to your location. A middle class worker in California makes significantly more than a middle class worker in West Virginia. A more honest comparison would be comparing the state of California to Germany as there both have the highest gdp in there respective geographic locations, although California has half the population it’s better than comparing Germany to a country that’s comparable to the entire EU
You live in a house (rent or your own), have a car, you dont need to buy the cheapest grocery, you have a health insurance, you can provide any education for your child then you are a middle class. If on top of this you can still go on vacation and save some money on side you are a higher middle class. This is my own definition i will use on any country.
For me as a 35-year-old with my partner in the bacon belt (kann man das so sagen?) of a conurbation in Hessen Frankfurt, it feels strange to be in the top 10% in terms of income but not be able to afford a condominium or house. We now have to save up some equity and we are happy to be one of the lucky ones who can. But others our age can’t, rents and basic expenses for food etc. keep rising and rising and eat up every pay rise… Although we have better jobs and higher wages (adjusted) than our parents, we couldn’t afford a house or apartment in the same street. This poses real social problems in Germany, as only very few will inherit.
I’m in the vulnerable group between poor and middle class. But I’ve gone back to school to try to make more which should make me middle class when I finish. However according to Marxists there is no middle class. Just workers and capitalists. As long as you are a worker you are working class even if you are a doctor or lawyer. I went to university but it didn’t help me with jobs at all. I’m now studying to become an HVAC technician. Something a lot more practical than studying philosophy that didn’t help at all. I just wish I didn’t believe the “go to university to be successful” mentality when I was younger and had done a practical education when younger. People my age (late 30s) that did that are now much more wealthy than me.
There are only two socioeconomic classes: one whose members don’t have to work for a living and another whose members who do. Some call these classes the owner class and the working class. Middle class is what people who live hand to mouth, but don’t skip a meal, call themselves to pretend that they are not counted among the poor working class.
Suggestion for a future article: “Why do Germans invest less than Americans” As far as I know, only 20% of all Germans own stocks, compared to over 50% of Americans. That has been bad for our country, as we haven’t built as much as wealth as our friends in the US. You could also ask a German startup to sponsor the article, Trade Republic or Scalable Capital come to mind (German neobrokers that let you buy stocks)
Well you challenged my perspective. Maybe I am upper class?? I am an American and I always describe myself as middle class. Why? Because that’s how I was raised, as a son of a High School teacher father and a stay-home mother. But I got lucky, by falling into a career which I love, and which I excel in. I earn 20x the median income in the US per your numbers. I was amazed when we were able to buy a 3600 sq ft home on 11 acres in 2019! Then, last year in 2023, we bought another 15 acres next door with a 6,000 sq ft custom home and a 1,000 sq ft guest house on it (they’re both vacant for now). We expanded our property to a gated 26 acres with 2 electric gates you have to pass through to get in. So how am I middle class? Because I don’t “act” rich. If you saw me, an average 45 year old, you’d just see a normal middle class looking guy. I don’t think I’m ostentatious or pretentious. I am able though to quietly give away a couple hundred thousand dollars a year, to those who are in need or who need a hand. Only those we’ve helped know that we helped them, and no one knows about all those others we have helped out. I guess I’m upper class, trying to hide and fit in as middle class. Those are my people! I don’t want to me be lumped in with the upper class stigma perhaps.
I consider myself a middle class citizen in The Netherlands, which is somewhat similar to the middle class in Germany. I earn about the average income (which is higher than the median income), I can save up quite some money, can pay for any groceries I want, and I can easily pay for a vacation at least 2 times a year if I want to. Yet I still cannot afford to buy my own home here, so I am forced to rent something, because housing prices are too high for me to pay…
It’s all about taxes. In NL we pay a good amount of income tax. I agree, it’s for a good cause, we have a great social security and people are not left behind fast. In NL we also have very favorable taxing on assets and income from that assets. The highest income tax scale is 49%, so this means you have to pay 49 cent to every euro you earn in that scale, which is every Euro you earn over 75k€ per year. If you have millions of euros and you have investments with that, let’s say you earn 200k€ with those millions. From those earnings you pay 36% tax. So here’s the deal. In NL we pay more tax on sweat (the labor we perform) than on income with the money we have. So being rich pays off, too much! To make the income gap smaller, it’s suggested to raise tax on income from investments and decrease tax on income from labor. In this way the people that have a low income, have more money available and will spend this. This is good for everyone and you even hear more and more rich subscribing to that point of view. Tax does not have to make the rich poor, but is can help slowing down the speed they are getting more rich.
The first problem seems to find the correct “middle”. Is it the avarage? Or is it the median? Both have their pros and cons. Usually the financially oriented use the avarage, it swipes away the problems of excessive high values for very few individuals. More commonly oriented viewers, like sociologists or trade unions, use the median, as it more tells what the most people have as a value. Incidently, the german laws regarding equal pay use the median. What was left out somehow were two things: 1. the cost of education is totally different. 2. the social security system is incomparable, especially when it comes to retirement (Rente). Speaking for my family, my parents were in the worker class with no wealth and low income. The positive thing about living in germany was, that the mere fact that i was good at schools and i had the opportunity to use newly built universities i was able to get a degree and rise to a middle class IT work. And so I was the only child of my parents that studied, but both of my kids have a master degree. Still we dont own a house, i wasnt supported by my parents but had to support them. And then i supported my kids very long. So i feel like being in a sandwich generation, within the socalled boomers.
It might be worth mentioning that Germany is an outlier within Europe with regard to home ownership. 49% of Germans on their home. That’s the lowest percentage in the EU and the second lowest in the whole of Europe after Switzerland. The EU average is 70%, which is higher than the US at 66%. In other words the “American dream” of home ownership is exceeded by Europeans. Furthermore, most American homes are poor quality wooden and cardboard houses with practically no isolation and a relatively low lifespan. Most American homes will need to be rebuilt after 40 or 50 years, while the European brick or stone buildings will last for centuries. Americans also spent considerably more on utilities like heating and air conditioning because of the poor insulation of their homes. So in the long term middle class Americans end up losing a lot of money compared to Europeans, as they will have to repair or rebuild their home more quickly and accumulate tens of thousands of dollars of utility bills more during a lifetime.
I have the feeling that here in Germany many young people don’t even know that they could buy apartments or even houses. In the media we only ever hear the prices of the cities with a population of over a million, but not our own prices. For example, I have coworkers who spend €10,000 a year on vacation (for two adults without children). But they don’t know that they would only have to give up their vacation for 5 years in order to save the down payment for a spacious apartment or 8 years for a small house. In conversations they mention house prices like €500,000 even though it’s only €150,000 for us! Our German obsession with vacation trips and of course the fact that they are common topics of conversation has a huge impact on us.
As always, an interesting question, and an interesting article. I think the difficulties in defining and analyzing the middle class have probably been left deliberately. People are more easily manipulated when all they can go on is how they feel. They are also more likely to consume and put on appearances when they feel that they are not enough.
Huge difference in European vs. American culture, so that’s the major delineating point. I was stationed in Hanau, Germany back int he 90’s with the Army and experienced German culture back then. Germans as a culture are healthier than Americans, as they walk much of the time and value exercise. They are a regimented culture which values quality over quantity, whereas America is almost the complete opposite in that regard. Here in America, the middle class is disappearing slowly. The goalposts have moved in terms of what income level constitutes “middle class”. This is based on single, or married, kids also. I live in a middle class neighborhood, however as a single man with no wife/kids, clearing well over $100K/year, I am considered upper class for my area. Most families in my area don’t earn my income, even with a double income household. Last thing, your point about an undergrad degree being the equivalent of a HS diploma now is correct. For many occupational fields today, the requirement is a Master’s or Doctoral degree. My field requires an undergrad, Master’s and medical license, so there’s that. Undergrad degrees are devalued. Skills matter more.
The problem with using national income figures to determine middle class, at least in the US, is that it doesn’t account for cost of living differences. There are places where it is legitimately hard to get by on 150k and places where you can make ends meet on 55k. I think some people in the US say they are middle class because they don’t want to think of themselves as poor and there is almost always someone worse off economically than them, just watch the news. On the flip side rich people see billionaires like Bezos and Musk building their own space rockets and think they’re middle class because that’s what rich is.
Dear Dr Aston dear Ashton family Is it so wrong to define middle class like not rich but not poor? Still kinda educated but not sophisticated? Still as an old german I will join the anti nazi demonstration in Bayreuth tomorrow because i do care of my beloved germany.It (The nazi overtaking my germany) will never happen again. So you see I i do care and will retire soon. I have the Abitur, today I am working with my buddy who has Hauptschule and a Meister and guess what, it works perfectly.Each one of us is helping each other on their field.We are known here in the community as the “can do” gang. Thats what in my humble opinion is whats german diversity population is the motor of the whole of my germany.I never ever owned any money to the bank just because I dont buy things I cannt afford. I rather drive my little hupty, but its mine.In germany we have the word: Mehr sein als schein. As a german I do have Fernweh, which,as you know,is the disire to travel, meet different cultures see different people, learn and laugh, i guess thats my motto. I will always help and support the younger generation yepp 😊😊😁😁
Here’s an interesting comparison for you. In Germany (as an example), minimum wage for a single person is 12 Euros per hour (1,500 Euros a month) and has an average cost of living of approximately 1,050 Euros a month (this is considered Middle Class for a single person). In the US, the minimum wage is a bit over 7 dollars per hour (around 1,160 dollars a month) with an average cost of living of around 3,189 dollars per month. And yes, I’m aware that minimum wages and costs of living do vary in the US, from state to state (in fact, most states pay higher than the federal minimum wage- Alabama being an exception). In the state of Washington (which pays the highest minimum wage of any state in the US), for example, minimum wage is $16.28 (about $2,604). The cost of living is around $2,600 dollars per month. As long as you have good health insurance (a big IF in the US) and nothing goes wrong, maybe a single guy or gal can live okay here. Which brings us to another important point. In the United States, most individuals filing for bankruptcy do so because of overwhelming medical debt. In Germany, every citizen has paid health care. In the US, you may have some version of it, if your state opted in for Obamacare. But if you live in a state that does not, you’re pretty much on your own.
Here in Germany there has been a significant shift. In my parents generation it was normal for mothers to stay at home for 2-3 years after giving birth and working nothing or part time after that. Nontheless a solid job as a skilled worker (3-3,5years of dual and payed education) was enough to buy a modest home. Today you can belong to the upper part of this income middle class and still this will not work out anymore. Near bigger cities like Munich you can afford to drive Ferrari but not a modest 3 bedroom home. So there is also a big gap in generation. And it will grow when babyboomers ask for their wellfare / retirment which is being paid by the younger working generation.
Great article, but will you go one step further? What if Middle Class is actually a SPENDING metric, instead of an income and/or wealth metric? Yes, you would think that Income +Wealth=Spending, and I love that you break the spending out the way you do… But, what if, by that definition, it is the type of goods, services, and non-essential item purchases that define Middle Class? MAYBE maybe we have in America the Illusion of a Middle Class because of a huge amount of Debt. If you throw in the $1.4+ Trillion in credit card debt alone, you can, theoretically, say that that is where the Middle Class exists. IMO, that’s the truly scary sh*t…
It would take substantially more work to prove, however I suspect one of two main reasons people identify with being in the middle class has to do with wide ranges of cost of living and the required incomes to live there. For example if you make less than 100k/yr in San Francisco you are poor. While at the same time in West Virginia 100k/ yr would be nearly upper class. The second main reason which you touched on is, the Social/ political connection. People don’t want to be considered poor or rich by others.
I would add that owning a home has also been a core element of “middle class” aspirations in Germany. And not just middle but also working class. Witness the Bauhaus movement before it degenerated into an industrial design buzzword. My grandparents (mom-and-pop-shop artisans, and poor as church mice on my dad’s side) succeeded. But it did take economizing and prioritizing. No vacations while the mortgage was not paid off yet. No car larger than the business required. Buy a piano for the education of the kids before buing a TV set (in the late 1950’s that was actually a choice). And so on …
Things are getting worse and will continue that trend. In the last info graphic showing the increase/decrease in the labor market by job types show a clear effect of technology increasing efficiency and the proliferation of using automation and robotics for production. I believe UBI(universal basic income) and UBH(universal basic healthcare) will be needed to prevent millions of people from becoming homeless, starved, or succumb to illness that could be prevented.
I grew up poor. Income doesn’t necessarily mean you’re middle class. A 60 year old McDonad’s employee earning $15/hr with $400k in savings is wealthier than me a fresh college grad making $100k/year with a mountain of debt. I live like a broke college student still weighed down by student debt. The McDonald’s employee with his mountain of savings lives like king compared to me. I’m currently lower class. My income gives me so much leverage to social climb provided I don’t make stupid financial mistakes that could keep me poor.
Point to consider in your analysis. If Americans are using leverage, where Germans are not, the magnitude of ups and downs will be greater for the American population. Demographics would explain the difference in percentage of membership in the middle-class between the two countries. You mentioned that participation in Germany is declining in the younger generations. Their average age of their population is also migrating older as the birth rate has been under replacement rates for many decades. IMO with a wider social safety net and the cost there of, combined with the more conservative investment preferences, the ability to move up or down in the socio-economic strata in Germany is lower than in the USA. This leaves your “economic success” as a country more dependent upon demographics than any other factor. That doesn’t bode well for Germany or the Eurozone as a whole, with a few exceptions such as France. Time will tell if I am right or wrong.
Holy moly, i considered myself to be middle class with my 86k€/year income. I just realized that the technical max income of 84.384€ is considered for households. So apparently i am not even middle class on my own. Does not feel like it though, since the living expenses in the big cities of Germany are quite insane. When defining the middle class by income, i think the living expenses of the particular cities would also have to be considered… I also don’t think owning a home is relevant for wealth. There is a lot of empirical evidence, that simply renting and investing into low cost globally diversified ETF like the MSCI ACWI IMI will have greater returns than the real estate market. Good thing about ETFs is that you can also invest in them with any € amount, so they are a great wealth opportunity for everyone.
I don’t think it is fair to apply the median income of an entire country to determine middle class in that country. In Virginia, the median income in Fairfax County was $145K in 2022, so it would be reasonable there for households with up to $290k to identify as middle class. On the lower end, median income Danville Virginia was $41k, so households with as little as $31k might accurately identify as middle class.
I wonder if it would be good to describe the “Middle Class” as people who own their own businesses, vs a % of salary. In Europe hundreds of years ago, there were 2 classes. Royalty and Workers. The Middle class was people who left the working class and started their own businesses. Once they did, they grew their wealth and challenged the Royal Class. These Middle Class people did not fit into the two existing classes, and as they became more wealthy, they became “The Rich”, which they remain to this day. A successful Entrepreneur will raise their net worth from nearly nothing, to millions of dollars in a 10-20 year period. This group builds net worth in their businesses, not houses or savings accounts, and is the real source of wealth and vertical movement in classes.
From the UK, you data showed something different around 59% of people were in the middle income bracket, but only 40% considered themselves as middle class? I would consider workers like train drivers who have being on strike recently have a middle class income, it would definitely class themselves as working class – therefore the type of work has a bearing on the classification.
Once again it seems that the middle class in the US is defined more by what one has, than what one does like in Europe – broadly speaking. Paycheck in Europe has a lower range so it’s not always a good measure of “class”. In Europe if you have a business, even small business, you’re almost always middle class or higher.
I started my careers as a drafts person with a two year degree from a community college. The pay was not terrifically good but it wasn’t at the bottom of society. I was in heavy industry and soon lost my job. I returned to college & got my bachelor’s in engineering. I then got a job in a sales & marketing depart and did extremely well but I found the job not challenging and boring. I was doing product cost estimation & pricing. I then worked myself into a product and cost estimation and pricing job in several small companies. I moved onto several heavy machinery companies and continued to both design and cost estimate
@ashton: for the gap between income and self-perceived middle class, you should also consider, that students, who do not have much income, but are children of middle class familys, will likeley describe themselfs as middle class as this is how they were raised. Same thing applies to pensioners, who were in the income middle class all their life, but now get less annuity.
I think you are talking about the working class entering and leaving the middle class when you compare the silent generation and baby boomers, with millennials and Gen Z. The working class or proletariat started to split around 1900 in a rag tag proletariat and a proletariat having homes and social security. This culminated in the post world war two era when the working class became middle class.
In the UK “middle class” is to many people something you wouldn’t want to admit to🙂 It’s still often seen a cultural thing rather than simply governed by income. Thus UK people seeing the term used in US politics have to try to understand it differently. A politician in the UK who openly stated that he wanted to reptresent the middle class would be less likely to get elected!
Very amusing. Words and meaning of words vary do much. Having lived most of my life in England were there is class system. However, a penniless Duke remains Upper Class. As Gilbert and Sullivan wrote in Iolanthe: Bow, bow, ye lower middle classes! Bow, bow, ye tradesmen! Bow, ye masses Then there is the Working Class sometimes known in socialist circles as the Proletariat, or by some members of the Middle Class as ‘despicable workies’. The Middle Class is stratified As is the Working Class e.g. between Day Labourers and skilled workers. In the middle there was/is a Pecking order, A small business owner would be Lower Middle, whereas a branch manager of a bank might be middle middle class, School teachers might be lower or middle, a country doctor upper middle, owners of large businesses then upper middle. In Germany there is fairly loosley defined Mittelschicht, small and medium sized business owners, often in manufacturing . They provide, or did, the backbone of the German economy. The German Aristocracy or Upper Class, had all power and privileges removed after WW1. However, the noble families still continue to consider themselves Upper Class. Class definition on the basis of income or net worth begs the question of whether a clever drug dealer or fraudelent business owner is ‘superior’ to an honest bus driver or nurse.
The more I watch things like this, the more obvious it becomes to me that if you just look at things like means of survival, and how many of the hours to live you have (that you can’t put in any bank) and what maximizes or diminishes these, then, at least as far as the home “ownership” aspect of life goes most people would be better off in a world where they were not owned by a home. Sorry, by a house. It’s just a house. The “home” part is just some kind of estate agent’s fantasy or sales pitch. (Yes there is such a thing as a home, but it’s just where the heart is. Sometimes that’s deep in the woods with the sky for a roof.) I have a notion (have not looked terribly deeply into this, and don’t have some ism I fly a flag for) that if we all moved from a system where revenue comes from income tax to one where revenue comes from rent collections, we’d be better off. You could have a profit driven market for the qualities of various kinds of houses that people are prepared to pay for when they can’t tell themselves it’s their “savings”, profit driven developments where you don’t get much traditional lawn to mow, but you do save huge amounts to put toward the things you actually value. all of it owned by society and managed on behalf of society by the government (No, it’s not socialism. For starters, no revolution. You gradually “push evolution” in that direction. Take over the real estate development niche, maybe, as a starting point. And secondly the idea is to replace most of the lower tax brackets with rent collections.
What is “middle class” for me? A construct, made to make most people feel (a) above others and better with themselves, as though they are having it well, and (b) feel that they have things to lose, thus keep trying more and more to grasp to what they have. To me there is only one metric, you either have your capital working for you, or you work for the capital. There are few exceptions as always, but to me this is the only true metric.
One thing to consider: Germans pay significant parts of their salary into the public retirement scheme. It’s usually not seen as an asset, since you can’t sell it or pass it on to your children. The actual worth is also highly dependent on how long you live. On average though it’s worth a few hundred thousand Euros (1500 / month for about 20 years).
A common consensus with middle class is that you have adequately met your housing, transportation, food, medical and recreational needs and have a safety cushion and being able to invest. Upper middle class means your investments are actively feeding your overall wealth in a significant way. Such as owning a profitable business or rental properties. Lower middle class has all those things but the inability to invest and often much less if not any recreational funds. I would say a lot of middle class people are lower middle class.
Net worth comparisons across classes annoy me because they always seem to presuppose that everyone is using the same strategies and tactics but for some reason only the upper class is benefitting. If you go just beneath the surface you find a substantial difference in asset allocation that explains why the upper class is running away with things. Most Americans believe home ownership is a key to building wealth. Most Americans believe our equities markets are rigged casinos where the only likely outcome is losing everything. Data does not/has never supported those ideas. Americans are dumping their money into an asset class with high carrying costs and mediocre performance (primary residences are called a forced inflation resistant savings account for a reason) then complaining that they’re not getting a “fair share” compared to people dumping their money into a much higher performing asset class that’s relatively cheap to hold.
I own a house without any dept or mordgage (it is paid completely), with an appartment what is rented, two cars and I don’t work anymore, but I define myself as “sufficient poor”, not middle class. I own a boat as well and we have a second fridge in the storage room. The gap between the middle class and the super rich is more and more open, wider, the middle class will be poorer and poorer, the super-rich will be more and more and richer at the same time. But, that is exact the situation inside USA as well.
I define middle class by feeling secure and able to spend a bit of money on unnecessary things. I don’t think one should just look on income alone, but also on living costs. Because to this day there is an incone gap between East and West Germany, but also a gap between living costs. So maybe you earn significantly less, but the living standard is the same as other families. I can divide my salary into thirds: one third living costs, one third saving, one third spending (and also mostly saving). So I would definitely define myself as middle class.
The proliferation of people with bachelor’s degrees wails to look at what thos degrees are actually in. 50 years ago the amount of people who intentionally went to school for majors who were bot designed to prepare them for a career was very low. There are alot if universities that pump out degrees that are completely useless. Many people who earn said degrees them proceed to work in retail, food service, etc in roles that never required a degree in the first place. Hence the don’t reach the middle class. The earnings potential of a gender studies or political science major is radically different than a nursing or engineering major, for example.
Good content but crucially the data stopping in 2016 doesn’t represent anything. My house has nearly tripled in value in just a few years as has everyone else’s. Which means, we are probably in a bubble that needs to pop again. What sucks is that it’ll be a much more insane drop. I measure my net worth on the price I paid, if it drops below that the entire world is going to feel pain not seen in our lifetimes. I’ll never understand how shelter gets counted as net worth. All it’s saying is that if you lose your job you could potentially sell that asset and go live under a bridge 🤷♂️.
I don’t feel like being in the “middle class” actually means anything, especially in the United States. I went to college, got a degree, and I paid off all of my debt. I started putting aside large sums of money to buy a home, but it only took 3 years at my chosen career for the cost of living to surpass my salary. Now, I have to chip away at savings every month just to afford the minimum. Buying a home at this point seems laughable, and it won’t be long before my savings is gone. Not only that, but I don’t have any help with my kid, so that has also impacted my ability to earn enough money to be financially stable or even financially comfortable. I once had an American dream of owning a home. Now, my dream is to die in a country that isn’t America, even if crossing the border is the last thing I do in life. I have no desire to continue fighting to hold onto my “middle class” status. It’s not worth the stress and the workload it would take to stay in this socioeconomic position.
If you define middle class by being able to afford the three H’s, then comparing net worth trends between countries doesn’t give the whole story. If healthcare and higher education is subsidized by the state, and the country has a good public transit and other safety nets, you practically don’t need an income to be at the low spectrum of the middle class.
The middle class has salaried employment and are net-positive tax contributors over their life time. They typically have an annual net disposible income that is three to five times the national average, are able to afford the mid-level stuff consumerism offers, and rely on the tax funded services the State offers in education, health care and retirement. They typically rely heavily on credit and thus do not have funds to invest in the capital markets and as a consequence do not benefit from book value gains the economy offers the wealthy, nor do they have the ability to employ tax optimization schemes.
Work-life balance in Germany is much better, allowing for more vacation and non-work activities. Average life expectancy is more than 4 years higher in Germany. To me, living longer, working only 36 hours per week, at least a month leave per year and then having much more time to enjoy, travel, stay fit and healthy is much more important than what car I drive. You might not own a garden in Germany, but you have (mostly free) access to a lot of garden and nature around you. I try to work smart, not hard and don’t see the point of being at the office when I’m too tired or sick to think straight. It’s always strange to me that so many Germans occupy themselves to building beautiful things like fancy cars, but then won’t bother buying things like that themselves and rather take their dogs for walks. To many people, the limitation isn’t money. It’s time. You can always make more money, but you can’t easily create more time.
Well done. I always considered my family middle class growing up, even upper. Now I am single at 54. I see myself as fortunate to own a home, which I was able to buy becuase of a severe injury settlement. Every house shown in this article appears to me to be owned ny someone wealthy. Homes and rent in the US are super high priced. I think more updated data would show a greatly expanding lower class which would not even include recent immigrants. The drastic learning loss and decline in literacy, which was exaggerated by the pandemic but started a steady decline before, almost ensures an exponential expansion of the lower class in the US.
I have been living both in Germany but mainly in Iceland. There are similarities being in middle and northern Europe, but also significant differences. Through my business I also got to know quite a few USA citizen. I would say, that being single or a pair without children, the live would be better in the USA. Being a family with kids, the live is better in Germany or Iceland and increasingly better with more kids. That include single parent families. The big point there, is education for your kids. Good schools, primary, secondary and tertiary education with no or low cost. Even with your children going abroad and study in at an expensive University like Pen State, my son went there, the government loans here in Iceland make it much easier for an Icelandic Student to study there, than a student from the USA itself. Otherwise you can say for a family with kids, you get in service what you pay in taxes. Regarding single parent families, a single mother from the USA told me, that Iceland is a paradise for single mothers. If you are single or a pair without kids, you mainly pay high taxes. If you are disabled in any way, you should try to live in one of the Nordic countries. The point in regards to younger people having it more difficult than the older generations, I can not agree. My opinion is, that the older generation were more thrifty when young and excepted worse living conditions until they reached a certain standard. That I would say applies both to Iceland and Germany.
The city that the German company I worked for, had lots of 3 story homes. My German coworkers told me they are multi generational. Ie grand parents live in ground floor parents on 2 floor, and children when grown move into upper level. I thought they were rich, these homes were large. They said they pass down the home, and keep in family.
Great article, as always! I think it varies a lot by area. Where we live, outside DC, the numbers would make us seem upper class, but as two teachers I can say for sure that we’re not. Solid middle class here. Same income in Ohio would make us upper class for sure. Still not sure we could afford uni for both our kids and a serious medical issue.
Attaining middle class status in the US right now feels like an impossible task—at least from a poor perspective. I live in one of the most expensive areas in the US which doesn’t help either, but those middle class careers are certainly few and far between here. I have zero debt which is a huge plus, but I only just landed a job that puts me close to (but still off) the bottom of the threshold.
Very informative, thanks! In my opinion, the safety net in Germany is much better. As a German living in the US for 8 years (self employed), I feel I‘m on my own and don’t expect getting much help from the government in terms of unemployment, healthcare and retirement. That’s totally different in Germany. No matter what happens to you, the safety net provides for a dignified life. In the US all is good as long as you have a well paying job. If you lose your job and don’t have assets you’re doomed.
Nice article. It is interesting how there can be so many ways to see the middle class. In the US, with ‘poor’ people owning cell phones and TVs, it makes one wonder how much people in other countries have of these things or even consider if they want to have these things. As far as food, what would people consider middle class food or how often they can eat out or where fast food figures into such things. Great stuff.
That was quite fascinating, particularly because you’re an American living in Germany (I assume) and I’m a German living in the U.S. We moved back to Hamburg in 2015 and left in a hurry in 2021. I think you’ll find that the decline in Germany will only accelerate with the current government in power. I cannot begin to tell you just how many Germans are leaving Germany, especially for the U.S. They all represent the middle class and above and have the funds to invest in order to qualify for an E2 visa. I personally think that everybody’s standard of living in both countries may very well get hit big times in the foreseeable future. However, I still see better opportunities over here: for starters, there are so many opportunities to start your own business 🤩 and while Germany is socio-economically more “uniform” across the nation, the individual states within the U.S. are incredibly diverse when it comes to opportunities (and also expenses) that I think that it’s just going to be easier to reach and maintain that middle class status over here, imo. Now I happen to look at things through the lens of being an entrepreneur (and I realize that my evaluation is heavily influenced by my experiences in both countries). There’s so much more I could share but that should suffice for now. 😅
The median age of a German is approximately 46 years old. In America, the median age is approximately 38. It would only be fair to compare the median wealth of the same age groups … I couldn’t find it for age 46 in the US, but I could find the range of 45 -54: $975,800 (with the median at $247,200)