This analysis caught my eye. What I believe it is saying is that the definition of middle-class is no longer valid, in part because the taxes the middle-class pay that go to subsidizing those defined as living in poverty lowers the middle-class standard of living.
Or perhaps a $30,000 income is not actually poverty when you consider the non cash income benefits, tax credits and such. Is “poverty” the new middle-class?
The federal poverty level for a family of four is $30,000 in 2023. According to U.S. Census Bureau data, the median (middle-class) household income was $70,784 in 2021 (most recent statistics). With a difference in income of nearly $41,000, you might expect middle-class families to have a much easier time affording basic necessities. Unfortunately, due to high living costs, many families who are considered to be middle-class feel like they are essentially living in poverty.
Overall, It costs more than $36,000 per year to be middle-class, landing some families with household incomes of $70,784 just $4,446 over the federal poverty line in 2023 (more on that below). When considering tax withholdings, tax credits, and lack of eligibility for certain government benefits, middle-class families might pocket only about $6,038 more each year than families making just $30,000 a year in income.
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This is why. I have said before that the bottom half of the income group cannot put together a retirement account that amounts to anything. The cost of living is rising and the bottom half just treads water. Definitions of who is lower income and who is middle income only matter to the guidelines for various assistance programs.
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The median household income is now $80,000 a year. Are you saying that those earning below that have no room to save and move ahead?
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The nationwide median doesn’t apply everywhere and yes some money could be saved but with more than one child in the family not enough to move the needle.
With rents nearing 2k per month in my area, median income doesn’t create a lot of spare income and I was addressing the bottom half, anyway,which is not the $80k per year and up group.
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The bottom half are those earning below $80,000, that’s my point, now if you were talking about the lowest 20% you may have a point.
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