The Middle Class in the USA

It is difficult to define the middle class in the USA, but there are basic dreams and aspirations that most American middle-class families share:

• Earning enough to purchase and own a home
• Saving a sufficient amount for retirement
• Ability to cover children's college education
• Having a family vacation once or twice a year

According to the 2014 report by the US Bureau of Economic Analysis, there were stark regional differences in purchasing power across the USA.  The range of all goods spread nearly 32% points, while that in rents was varying up to almost 97% points among all states and metropolitan areas.  If the national average rent were $1,000, a person living in Mississippi would pay $621, while somebody living in Hawaii would pay $1,590 for the same type of dwelling.  A professor at Cornell University pays less in mortgage for his four-bedroom home in Ithaca, NY than his son pays in rent for a one-room apartment located a few hours south in Brooklyn (Thomas A. Hirschl, Chasing the American Dream, 2014).

With the poverty line at $24,000 for a family of four, somebody in Mississippi at $22,000 gets support from a benefit program, but with an adjusted $25,000, there wouldn't be any benefit available for the family (Sheldon Danziger, Russell Sage Foundation, a social research center in NY). 

President Obama once identified the top earners as those making more than $200,000 a year or households with an income of more than $250,000 a year, but in terms of buying power $200,000 in one location does not translate the same value in different locations (Christopher Chasteen, research director for the Economic Research Institute, a company that conducts cost-of-living and salary research).


Source:
Jo Craven McGinty, "Why Wealth Isn't Defined Simply." WSJ, A2, Sat/Sun Feb. 21-22, 2015.