Bay

But they do make mortgage payments and pay substantial property taxes as well.

I'm simply pointing out that a $560K home in most of California will put you in a middle-class neighborhood with average-performing schools. Doesn't that make you middle-class in an important sense?

mini

"mini,

Find me a house in SF that's $165K that's worth buying..."

That's the whole point. The middle quintile in SF (maybe $50k to $70k) DOESN'T own a house or apartment, unless they've inherited one, bought it in the 1970s.

The family with the $200k income likely does (or can), and in this respect has far more in common with the family with $1m income. What they have in common besides assets, health care, pension, cars, etc. are jobs - both are usually still working for a living. If all people who work for a living are middle class, then this is meaningful. But such folks, as already noted, have much less in common with middle-income folks, and the differences between them in most cases widen over time.

UCLAri

Right, but then again, the person earning that income can easily buy a house in other parts of the country and be "middle-class." I think that's where this gets interesting.

What is middle-class in a country where the same salary gets you so little in one place and so much in another? It's an interesting issue, and one that will only be more important as cities like LA and SF and NYC experience growth or decline as population centers.

Shrinkrap

From wikepedia, regarding San Francisco

Following a national trend, an out-migration of middle class families is contributing to widening income disparity[44] and has left the city with a lower proportion of children, 14.5 percent, than any other large American city.


Where can I find the "quartiles"?

midmo

UCLAri, a median household (it isn't really family, members of household need not be related) income of 100K will seem far more middle class to a single person with no children than to a family with several kids. So, I think you are safe--for the time being.

djvu, I agree there is really no comparison in life-style/comfort/security between families with income of 40K and 200K. However, there is even less similarity between a family with no inherited assets and annual income of 200K from wages and someone with many hundreds of millions in assets and who knows what annual income. So, if we decide the 200K family with no assets beyond one home and a couple of old cars is not middle class, just what are they? I know rich people; they don't live like families with school age kids, no inherited wealth and annual income of 150-200K (after years of lower income).

This is why the common use of the 50K median household income bothers me when the discussion centers on college affordability.

mini

"Right, but then again, the person earning that income can easily buy a house in other parts of the country and be "middle-class."

Except they'd have to have a job. My step-niece (without an M.A.) makes $135k teaching math on the North Shore of Long Island. If she lived in Topeka, maybe she'd make $35k?

kelsmom

I do think Hayden's point that the $40k earner & the $200k earner have more in common with each other than with the $1m earner has merit. Even though I would consider $200k a lot of money, I do realize that rising prices hits even those earners hard. The $1m earners don't feel it in the same way. This is my problem with the folks in power ... they do NOT understand the impact of today's economy on MOST people. They have no problem shipping jobs overseas and drastically cutting wages for their employees. $34 an hour cut to $17 an hour? No biggie ... at least you have a job, says the CEO. But if his $4 million a year was cut to $2 million, he wouldn't hurt NEARLY as much as his employees. That's the difference. But I still think $200k is upper middle class in many areas (mine included). And with that salary comes a lot of perks the $40k earner isn't able to enjoy (such as saving for retirement). So yes, there are big differences between the $40k earner and the $200k earner's lifestyles.

barrons

Or you do as we do--make big city money and buy houses in the best parts of smaller low-cost cities for retirement and/or second homes at a fraction of the big city price. It's usually much cheaper cash flow wise to rent than to buy in expensive cities.

tom1944

I live in NJ and everyone I know making 175k and above live a very nice lifestyle.

bulletandpima

Let's use 180K, b/c it is easily divisible by 12. That means 15K per month, in NJ a large majority work in NYC, thus they pay NYC taxes, NY taxes, NJ taxes and FEDERAL. Out of the 15K they will pay @ 40% in withholdings, now they are at 9K per month...commuting will run them at least 1k, that leaves thm at 8000. In a mtg world they would be guaranteed a mtg of 3600/pm, which translates into a@400K mtg. Now you have less than 4000 that must cover utilities, car pmts, car insurance, credit card debt and college loans...oops I forgot food and gas for the car, now add in school supplies, dance lessons/tae kwon do, etc I am not sure there is enough money left to get your hair done.

175K in NJ goes real quick... even today in a downturn real estate market,, a 400K mtg puts you in a 500K area, in the commuting areas with good schools you are not getting a dream home!

175 K in NJ does not equate to a nice lifestyle unless the folks have bought you the car and paid for college...Been there done that and got the patch to prove it

northeastmom

bulletandpima, excellent, and accurate post. Oh, and those commuting costs into NYC, well I think the tolls are now up to $7.00! Also, lets not forget the parking costs once in NYC. 1k might not cover those commuting expenses. I guess there is always the bus, train, or ferry (another huge bill, btw). Those are only possible modes of transportation if you do not need to take your car to work. Not everyone can take public transit.

bulletandpima

Well if it costs 7 to get in(typically no toll to leave) add in 2 gallons of gas (30 in 30 out) @8, plus on a good day 30 for parking = $225 per week and 1100 per month...anyone from that area will tell you 50 per day is a steal, thus we are really looking at $1500 in transportation for a good day since we didn't add in NJTPKE (most likely another $50 at least per month)...so my numbers were off and now you have $3500 left to pay your car pmts., ins., college loans, credit cards, tae kwon do/dance lessons (which run @150 pm) and your food and clothing.

I always would say to my Mom you don't know what or how they are doing it, but 175k in NJ will put you in a horrible commute, or a smaller home, you will not be living in the dream home unless you decide to become house poor!

mini

Now take that same commuter from New Jersey (or from Queens) who commutes into NYC and earns $54.4k (the median family income).

northeastmom

The family of 3 or 4 with an income of 54.4k is not living in our area whether they commute anywhere or not. They cannot find a place to live on that income, unless they live in someone's illegal basement apartment, or they live rent free with their mommy and daddy. I cannot speak for Queens.

Shrinkrap

But mini, and please excuse my ignorance, doen't the median in New York include lot of people who make very little and are not working? And more than it's share of millionaires? Isn't there a huge difference between the top and the bottom? Wouldn't that matter for the purposes of this discussion? Maybe the "mode" is better.

P.S. I grew up in Queens and when my parents filled out my financial aid forms in '76, they made about 30K (HS RN/teacher and Psychologist for corrections facility) if I remember correctly...or maybe that was the value of or home...