Pew Research Center defines the middle class as adults whose annual household income is two-thirds to 200% of the national median (adjusted for household size and local cost of living).
For 2020, the median household income in the U.S. was $67,521. This meant you were considered middle class if you made $45,014 to $135,042.
The Brookings Institute defines the middle class as the middle 60% of households (or middle three quintiles) on the income distribution scale.
For 2020, this meant you were middle class if you made $39,479 to $109,732, which is slightly different from Pew Research Center’s range.
The Urban Institute defines middle class as an adult whose annual household income is 150% to 500% higher than the federal poverty level.
For 2020, the federal poverty level was $21,720 for a three-person household. This meant you were considered middle class if your gross annual income was between $32,580 and $108,600 and you had a household size of three.
Alternate name: Middle income
How the Middle Class Works
Middle-class families aren’t defined by annual income alone. They’re also characterized by their education, occupational status, and goals. For example, a lot of middle-class families are after the same thing: the so-called American Dream. They want the proverbial white picket fence, homeownership, and a secure retirement. They typically have more college education than lower-income classes, and have white-collar jobs such as managers, administrators, lawyers, and accountants. Although the middle class can live paycheck to paycheck, they usually have enough disposable income to spend on entertainment and the occasional vacation. Middle-class families are also prone to the money versus time squeeze. Either they work more hours to make more money, leaving less leisure time; or they sacrifice money for more time with family, lowering their lifetime earnings and chances of having adequate financial security.
Are You Middle Class?
Determining your middle-class status doesn’t boil down to just income. It also depends on the size of your household and where you’re located. For example, in a small town in Georgia, $80,000 goes a lot further than it would in San Francisco. That amount also would stretch a lot farther for a single individual than it would for a household with five dependents. It’s important to note that your middle-class status could shift from year to year. It’s never set in stone. Suppose you’re a graduate student living on a $15,000 annual stipend right now. You’d be considered part of a low-income class. Once you graduate, your education could catapult you into the middle class or even upper class economically as you advance in your career. Your socioeconomic status also can vary based on where you live. If you’re classified as part of the lower-income class by U.S. standards, you could be ranked as middle class or upper class in another country. Likewise, if you’re in the middle class in another country, you could be considered a lower-income class in the U.S.
Notable Happenings
In 2020, the U.S. median household income declined for the first time since 2011—from $69,560 to $67,521. This 2.9% decrease was a direct result of the pandemic and subsequent recession. The poverty rate also increased by 1 percentage point in 2020 after being on a steady, five-year decline. Now, there are more than 37.2 million Americans in poverty—3.3 million more than in 2019. But the negative impacts on the middle class stretched far beyond the U.S. The global middle class shrank by 54 million people in 2020, according to a Pew Research study. At the same time, the poor and lower-income classes grew by 131 million people. This massive shift was largely due to poverty rising in South Asia, East Asia, and the Pacific.
