The lines that divide Americans by economic class have always been blurred. For many families, where they fall on the income ladder depends on a feeling, not just number. However, how do you know if your feelings match reality? The Pew Research Center’s Income Centre is the fastest way to find the answer to this question. You may find that the more important question is what you should do with this information after you find out your ranking, so you can safely continue to move up.
Upper class.
According to an analysis by the Pew Research Center, a family of three would need to earn $156,600 to meet the definition of the upper class. The Pew Research Center notes that the richest households are the only ones that have seen their wealth grow since the start of the Great Recession. The median net worth of the top 20 percent increased by 13 percent to $1.2 million from 2007 to 2016, meanwhile, the wealth of the lowest income earners decreased by at least 20 percent over that period. The result is that the wealth gap between the richest and poorest households in the United States has become a chasm from the year 1989 to 2016.
Middle Class.
Many Americans associate themselves with the middle class. In fact, a Gallup survey earlier this year showed that just over half of respondents identified themselves as middle- or upper-middle-class. The middle class is actually those earning between $52,200 and $156,600, or two-thirds of the national median, adjusted for the local cost of living and twice the size of the household. In 2021, the median income was $70,784, according to the Census Bureau.
Although household income has been trending upward since 1970, the Pew Research Center study shows that most of the growth occurred before 2000. The median income increased 41 percent to $70,800 in just 30 years. If household income had continued to grow at the same rate after 2000, the current median would be about $87,000. It is much higher than today’s household income.
Low-income
According to an analysis by the Pew Research Center, a family of three is considered low-income if its annual income is less than $52,200. This group makes up a large portion of the U.S. population with about 38 percent of households earning less than $50,000 by 2021. However, keep in mind that the geographic location is important here: For example, the figure represents middle-class income in Kansas,Missouri, but in New York City it is considered quite low.
When discussing low-income households, it is important to emphasize the opportunities for growth. While middle-class families rely on home equity to build wealth and upper-class families rely on financial assets and investments to build wealth. The Pew Research Center has found that low-income people have fewer options for success.
In fact, research shows that the greater the gap between rich and poor, the harder it is for low-income Americans to move up the ladder. It is important to remember that financial status is a comprehensive snapshot that considers much more than simply income.
Researchers have determined that education, geographic location, social ties and other factors can influence a person’s class identification.
Beyond that, intangible measures of overall wealth such as physical and mental health, access to cultural assets, healthy social networks can be just as important as income that making people with technically lower incomes as fulfilling as those with higher incomes.
Technically, some high-income earners may qualify as upper-class families, even though debt and other financial obligations actually put them in a completely different position.
So do the numbers matter? Maybe. But they can always change. It may be more important to take advantage of the opportunities available to your family and continue to move your family up in these ranks.