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- Middle class America isn’t faring that well, according to several results from an INSIDER and Morning Consult survey.
- They’re behind on homeownership and retirement savings, partly because they have debt to pay off.
- Even some of those making six figures identify as middle class rather than affluent.
- These findings reflect a shrinking middle class and higher cost of living.
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Middle class America is changing.
A recent survey by INSIDER and Morning Consult, which polled 4,400 Americans, asked respondents to define their financial situations by selecting poor, working class, middle class, upper middle class, or affluent (or don’t know). The results, in conjunction with other answers related to demographics and financial behaviors, indicated a shifting landscape in terms of socio-economic status.
The middle class in particular carries several financial burdens — they’re behind on homeownership, lagging in saving for retirement, and have debt to pay off.
Most striking, though, is that many respondents self-identified with a class that didn’t necessarily align with their income levels or the socio-economic background where they grew up. For example, many of those earning six figures or who grew up affluent defined themselves as middle class.
Identifying as a station lower than their backgrounds underscores previous studies of a shrinking middle class and a higher cost of living.
Here, six key findings from the survey that show the state of America’s middle class today.
Nearly half of Americans earning $100,000 or more think they’re middle class.
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Nearly 42% of those earning $100,000 or more think they’re middle class — around 36% of them think they’re upper middle class, and only 6% of those respondents think they’re affluent.
Of the respondents who identified as affluent, 17% earn less than $50,000. Nearly half of respondents who identify as affluent earn $100,000 or more, and about 34% of them earn between $50,000 and $100,000. But the class with the biggest difference in income levels is the self-identified middle class — 36% earn less than $50,000, 18% earn $100,000 or more, and about 50% earn $50,000 to $100,000.
Class and wealth aren’t the same and both are relative — some can earn less and still feel rich, while others can earn more and feel that they’re struggling financially.
But these findings are also indicative of a shrinking middle class. According to the Pew Research Center, the size of middle-class America has decreased by nearly 10% from 1971 to 2016. And from 2010 to 2016, their wealth didn’t increase at the higher rate of the upper class, widening the income gap between the two groups.
One-third of millennials earning at least $100,000 a year consider themselves middle class.
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About 38% of millennials earning $100,000 a year or more think they’re middle class, according to the survey.
Of the respondents who answered the question, less than half who earn $100,000 or more consider themselves rich — about 23% of them think they’re upper middle class, and nearly 6% think they’re affluent. About a quarter of those earning $100,000 a year or more consider themselves below middle class — nearly 7% think they’re poor, and almost 20% think they’re working class.
The middle class is particularly "squeezing" millennials out, reported Richard Partington for The Guardian, citing the Organisation for Economic Co-operation and Development (OECD).
In the current economy, a six-figure salary may no longer be what it once was. While millennials have benefited from a 67% rise in wages since 1970, according to research by Student Loan Hero, this increase hasn’t kept up with inflating living costs: Rent, home prices, and college tuition have all increased faster than incomes in the US.
Less than half of city-dwellers consider themselves middle class.
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Only 37% of city-dwellers consider themselves middle class or upper middle class; more than half consider themselves poor or working class. In contrast, more than half of those living in suburban areas think they’re middle class or upper middle class — around 14% said they’re poor and roughly 27% said they’re working class.
City dwellers are younger and earn less, and are more likely to have student loans. City lifestyle also creates tighter budgets because of a high cost of living. A big cost of living increase has hit America’s middle class particularly hard in cities like Sacramento and Houston, according to GoBankingRates.
Urban residents may also be more inclined to feel they’re not part of the middle class because many don’t own a home — nearly half are renters, compared to a little more than a quarter of suburban residents, according to the survey.
See the rest of the story at Business Insider
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Source: Business Insider – hhoffower@businessinsider.com (Hillary Hoffower)