What is Middle Class

CALIFORNIA STATE UNIVERSITY FULLERTON What is Middle Class? March 9, 2007 Anil Puri, Ph.D. Dean, College of Business and Economics California State University, Fullerton What is Middle Class? Several definitions – 1. Middle is between top and bottom 2. Middle class is the middle-middle class 3. Middle class is professional classes 4. Middle class is made up of three classes a. upper middle b. middle, and c. the lower middle or working class What is Middle Class? Several definitions – 1. Middle is between top and bottom 2. Middle class is the middle-middle class 3. Middle class is professional classes 4. Middle class is made up of three classes a. upper middle b. middle, and c. the lower middle or working class Middle-middle class is made of those who are actually in the middle of the income distribution. It may be composed of those with an annual income of 80% to 120% of the national median household income. This is the typical American Average. Income range for such households will be from $35,200 to $52,800. Such middle class households cannot actually afford the middle class lifestyles. What is Middle Class? Several definitions – 1. Middle is between top and bottom 2. Middle class is the middle-middle class 3. Middle class is professional classes 4. Middle class is made up of three classes a. upper middle b. middle, and c. the lower middle or working class Upper middle class consists mostly of white-collar professionals who are highly educated with household incomes of $100,000+, and individuals making above $62,500 living in such households. The national median household income is $46,000 and individual median income is $32,000 in 2003 dollars. Upper middle class is estimated to be about 15% of the population. Lower middle class is the most populous of classes and is about the same size as the working class, approximately onethird of the population. It consists of “semi-professionals” and lowerskilled white collar workers. Upper Class (1-5%): CEOs and other high income individuals Upper Middle Class (15%) White collar professionals, great autonomy, graduate degrees, commonly $62,500+ ($100K+ for households with 2 income earners) Lower Middle Class (30-33%): Semi-professionals, bachelor’s degree or some college, limited autonomy, commonly $32,500 - $60,000. Working Class (30-33%): Clerical, service and blue collar, minimal autonomy, high school or perhaps some college, commonly $15,000 -$32,000. Poor (17 – 20%): Frequently unemployed, below the poverty line, often no high school degree, below $15,000. U.S.Household: Share of Aggregate Income by Income Quintile 100% 95% 90% 85% 80% 75% 70% 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10%10.8 5% 0% Q1 Q2 Q3 Q4 Q5 43.8 50.1 24.2 23.2 17.3 14.7 8.7 3.4 1970 1969 1972 1971 1993 1992 1999 1998 1995 1994 2004 2003 1974 1973 2000 2000 1997 1996 2002 2001 1980 1979 1976 1975 1982 1981 1978 1977 1985 1984 1987 1986 1988 1989 1988 1991 1990 4.0 1968 1967 SCAG Lorenz Curves 100% 80% Percent of Income SCAG 1980 SCAG 1990 SCAG 2000 Equality 60% 40% 20% 0% 0% 20% 40% 60% Percent of Households 80% 100% Percent of Households 10% 12% 14% 16% 0% 2% 4% 6% 8% Less than $5,000 $5,000 to $9,999 $10,000 to $12,499 $12,500 to $14,999 $15,000 to $17,499 $17,500 to $19,999 $20,000 to $22,499 $22,500 to $24,999 $25,000 to $27,499 $27,500 to $29,999 $30,000 to $32,499 $32,500 to $34,999 $35,000 to $37,499 $37,500 to $39,999 $40,000 to $42,499 $42,500 to $44,999 $45,000 to $47,499 $47,500 to $49,999 $50,000 to $54,999 $55,000 to $59,999 $60,000 to $74,999 $75,000 to $99,999 $100,000 to $124,999 $125,000 to $149,999 $150,000 or more Ventura Riverside Los Angeles Income Bracket Orange Imperial San Bernardino Census 1990 Income Distribution Percent of Households 10% 12% 14% 16% 0% LT $10;000 $10;000 to $14;999 $15;000 to $19;999 2% 4% 6% 8% Orange Imperial $20;000 to $24;999 San Bernardino $25;000 to $29;999 $30;000 to $34;999 $35;000 to $39;999 Ventura Riverside $40;000 to $44;999 Los Angeles Census 2000 Income Distribution Income Bracket $45;000 to $49;999 $50;000 to $59;999 $60;000 to $74;999 $75;000 to $99;999 $100;000 to $124;999 $125;000 to $149;999 $150;000 to $199;999 $200;000 or more SCAG Region Income Distribution by County-C2SS Data 110% 100% 90% 80% 70% 60% 50% 40% 30% 20% 31.2% 29.7% 18.6% 31.2% 19.9% 28.3% 43.8% 46.2% 48.1% 48.0% 45.1% 45.7% 25.0% 35.2% 22.2% 20.9% 34.5% 26.6% $75,000 & Above $25,000 to $74,900 10% 0% Los Angeles Less than $24,999 Orange Riverside San Bernardino Ventura SCAG5County