The middle class is shrinking as a result of several factors including surging inflation, an aging population, and the rise of remote work, according to a new report from ConsumerAffairs.
The federal poverty level for a family of four is $30,000 this year, according to the Department of Health and Human Services. Before taxes, the median (middle class) household income was $74,580 in 2022, according to the most recent U.S. Census Bureau data.This stands at a 2.3% decrease from the 2021 estimate of $76,330.
Some families that were considered middle class in 2020 may no longer be as inflation has surged, peaking at 9% in June 2020, according to ConsumerAffairs.
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Financial insecurity and rising debt are just some of the growing issues that U.S. households face.
Using the Pew Research Center’s income calculator that determines the minimum annual income required to be middle class in each state, ConsumerAffairs made some calculations based on 2018 data.
ConsumerAffairs then put those findings into the inflation calculator of the U.S. Bureau of Labor Statistics to refine the data further to show the state-by-state minimum annual income required for a family of four to be considered middle class this year.
Lowest and highest numbers
From that list, here are the top-five states with the lowest minimum required income: Alabama ($51,798), Arkansas ($51,798), Arizona ($57,964), West Virginia ($59,197), and Mississippi ($60,431).
The top-five states with the highest minimum required income are: Hawaii ($82,630), the District of Columbia ($81,396), New York ($81,396), Connecticut ($80,163), and New Jersey ($80,163).
ConsumerAffairs cites Oliver Rust, head of Product at independent inflation data aggregator Truflation, as saying that the middle class, which historically has been the engine of economic growth, now accounts for a lower share of income than it did from 1960 through 1980. Rust said this is partly because of demographic changes “as the population has seen a particularly steep increase at the extreme bottom and top of the economic spectrum” since the mid-2000s.
More changes may lie ahead, he said, as factors including the combination of an aging population, which usually lives off savings and generates little income, and an increased number of immigrants, tend to lower median incomes.
Another factor, Rust said, is remote work wage-earners who relocate from one state to another where their dollars might stretch further.
To stretch dollars further
Another factor could also be that some wage-earners are looking to make their dollars go further by relocating to a state with a lower tax burden. Kiplinger recently looked at each state’s median annual salary and calculated the average annual tax spent for three main tax categories: state income tax, property tax and sales tax on essential items.
Check out the full report for details on why these states made the list: Wyoming, Nevada, Tennessee, Florida, North Dakota, Alaska, Arizona, Washington, South Dakota, and Louisiana.
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FAQs
Before taxes, the median (middle class) household income was $74,580 in 2022, according to the most recent U.S. Census Bureau data. This stands at a 2.3% decrease from the 2021 estimate of $76,330.
Are you still in the middle class? ›
As of 2022 (the most recent Census data), the average median household income in the U.S. was $73,914, meaning the national range for the middle class is roughly $49,271 to $147,828. Across the nation's largest cities, the range is between $51,558 and $154,590, according to SmartAsset.
What is considered middle class in 2024? ›
What is the average middle class income? In 2024, a large U.S. city's middle-class income averages between $52,000 and $155,000, with the median household income across all 345 cities at $77,345, making middle-class income limits fall between $51,558 and $154,590, SmartAsset noted.
Who is the middle class now? ›
One commonly used definition from the Pew Research Center sets a middle-class income between two-thirds and twice the national median income, or $67,819 to $203,458 for a family of four in 2022. Most Americans consider the lower end of that range, $75,000 and $100,000, to be middle class, according to the Post poll.
What household income is considered middle class? ›
In a large U.S. city, a middle-class income averages between $52,000 and $155,000. The median household income across all 345 cities is $77,345, making middle-class income limits fall between $51,558 and $154,590.
Is the middle class disappearing in the US? ›
The middle class is shrinking as a result of several factors including surging inflation, an aging population, and the rise of remote work, according to a new report from ConsumerAffairs. The federal poverty level for a family of four is $30,000 this year, according to the Department of Health and Human Services.
What salary is considered lower class? ›
Where you rank by income. According to the Census Bureau's Income in the United States: 2022 report, the median household income is $74,580 (a 2.3% decline from 2021), while household income levels for each class level are as follows: Lower class: less than or equal to $30,000. Lower-middle class: $30,001 – $58,020.
What is a good salary in 2024? ›
“A salary range of $80,001 to $95,000 is more reasonable for living comfortably, this aligns more closely with the reality in high-cost living areas.”
Is $70000 a year middle class? ›
A family of four in California needs to earn nearly $70,000 annually to still be considered middle class in 2023, according to a new report by ConsumerAffairs.
Is $50000 a year considered middle class? ›
By the Census data, it means that if you earn between $50,000 and $150,000 a year, you are considered middle class. It's a pretty straightforward answer, but it isn't particularly helpful if you're trying to climb up out of a lower income bracket into the middle class.
China continues to represent the highest middle-income population globally, with 693.3 million, or approximately 53 percent of the global total.
What is wealthy class income? ›
Based on that figure, an annual income of $500,000 or more would make you rich. The Economic Policy Institute uses a different baseline to determine who constitutes the top 1% and the top 5%. For 2021, you're in the top 1% if you earn $819,324 or more each year. The top 5% of income earners make $335,891 per year.
How do you know if you're middle class? ›
Lower middle class: Those in the 20th to 40th percentile of household income, between $28,008 and $55,000. Middle class: Those in the 40th to 60th percentile of household income, ranging from $55,001 to $89,744. Upper middle class: Households in the 60th to 80th percentile, with incomes between $89,745 and $149,131.
Am I middle class in 2024? ›
But now, in 2024, many Americans who fit squarely the middle class income range (defined by Pew Research Center, about $52,000 to $156,000 for a household of three) are feeling less financially secure than in years past. One thing that hasn't changed: We all want to be middle class.
What is the income limit for the middle class? ›
As of 2022 (the most recent Census data), the average median household income in the U.S. was $73,914, meaning the national range for the middle class is roughly $49,271 to $147,828.
How many Americans are middle class? ›
WASHINGTON, D.C. -- Fifty-four percent of Americans identify as part of the middle class, including 39% who say they are “middle class” and 15% “upper-middle class.”
At what point are you not middle class? ›
In turn, Americans who are middle class are in households making between $47,000 and $142,000 in 2021 — and updated for inflation, that lower number would be $53,000 today, said Jason Sorens, Ph.
Am I middle class or upper class? ›
Middle class: Those in the 40th to 60th percentile of household income, ranging from $55,001 to $89,744. Upper middle class: Households in the 60th to 80th percentile, with incomes between $89,745 and $149,131. Upper class: The top 20% of earners, with household incomes of $149,132 or more.
Are you middle class meaning? ›
middle class. noun [ U ] /ˈmɪd·əl ˈklæs/ social studies. the people in a society who are not of high social rank or extremely rich but are not poor.
