What’s the dividing line between MIDDLE CLASS and RICH?

Parent Cafe
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<p>Its difficult for me to conceive that those making $70,000 and those making $370,000, both consider themselves to be middle class.
I don’t buy that living in someplace like Boston, makes life so difficult for someone making six figures, as there are plenty of people who do not, yet they are far above income needed for any kind of " safety net".</p>

<p>That seems to me to be a more relevant conversation.
Not how few assets someone with $500,000 income but large outgo has been able to accumulate, but how are the people who are working, and maybe trying to buy their own home, being able to afford medical cars, and clothes for their kids and maybe even a night out ever once in a while.</p>

<p>I often hear how hard it is to live in New Jersey or NYC, with an income of $490,000, but the moment someone who is making $80,000 but living in Spokane or Boise complains, they are told to cut the monthly pizza night, their cell phone and go to the library.
( I agree that the library is a great resource, but cell phones are almost a necessity, and I would say going out at least once a month is as well).

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<p><a href=“http://www.alternet.org/economy/3-facts-poverty-deniers-dont-want-hear”>http://www.alternet.org/economy/3-facts-poverty-deniers-dont-want-hear&lt;/a&gt;&lt;/p&gt;

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<a href=“U.S. poverty rates higher, safety net weaker than in peer countries | Economic Policy Institute”>http://www.epi.org/publication/ib339-us-poverty-higher-safety-net-weaker/&lt;/a&gt;&lt;/p&gt;

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<p>Honestly, Vladenschlutte, I am never quite sure what MiamiDAP is saying.</p>

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<p>classof75, the Economic Policy Institute is a very liberal organization that gets a lot of its funding from labor unions. Not that I have anything against labor unions, I’m part of one. One of its founders is Robert Reich, who just got in the news today for collecting a 240K annual salary from Berkeley for teaching just one class. I can’t even imagine how much he collects for his lectures and books. Nothing against people making tons of money, but those who rail against people collecting far higher salaries than they deserve, in my opinion, shouldn’t be raking in far higher salaries than they deserve. Reminds me of John Edwards and his piteous plea about the two Americas. Or Al Gore and his energy sucking 10,000 sf home and private jets.</p>

<p>Making millions of dollars in the business of promoting how terrible it is for people to make millions of dollars. Maybe they’re just covering all their bases.</p>

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<p>Looks to me like (paying people less) + (a smaller safety net) = more poor and lower middle class people.</p>

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<p>Is Standard and Poors a liberal think tank? WSJ?</p>

<p><a href=“Inequality Is Damaging the U.S. Economy, S&P Study Says - WSJ”>Inequality Is Damaging the U.S. Economy, S&P Study Says - WSJ;

<p>"“Some degree of rebalancing—along with spending in the areas of education, health care, and infrastructure, for example—could help bring under control an income gap that, at its current level, threatens the stability of an economy still struggling to recover,” S&P concludes. “This could take the form of reallocating fiscal resources toward those with a greater propensity to spend, or toward badly needed public resources like roads, ports, and transit.”</p>

<p><a href=“Log In | S&P Capital IQ”>Log In | S&P Capital IQ;

<p>“At extreme levels, income inequality can harm sustained economic growth over long periods. The U.S. is approaching that threshold.
Standard & Poor’s sees extreme income inequality as a drag on long-run economic growth. We’ve reduced our 10-year U.S. growth forecast to a 2.5% rate. We expected 2.8% five years ago.
With wages of a college graduate double that of a high school graduate, increasing educational attainment is an effective way to bring income inequality back to healthy levels.
It also helps the U.S economy. Over the next five years, if the American workforce completed just one more year of school, the resulting productivity gains could add about $525” billion, or 2.4%, to the level of GDP, relative to the baseline.
A cautious approach to reducing inequality would benefit the economy, but extreme policy measures could backfire."</p>

<p>By the way…since we are also talking about wealthy people…economic growth has been below trend for 14 years and so has stock market gains. </p>

<p>“Indeed, while Standard & Poor’s is expecting the annual real growth rate to climb above the 3% mark in 2015. That will be the first time since 2005 and comes after another year of subpar growth of just 2.0% expected for 2014. The U.S. already has averaged a mere 1.4% over the last 10 years, through 2013. After expecting to see that long-awaited burst of growth in 2014 of 3% at the beginning of the year, we have reduced our expectations for GDP growth back to that 2% mark once again. We now expect the 10-year average annual growth to be about 2.5% though 2024. To put that in perspective, five years ago, we forecasted the 10-year average annual growth rate to be 2.8%, with all yearly rates much higher than the 2% mark.”</p>

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<p>It’s because the $370,000 parents sends their kids to the same prep schools as the $37,000,000 parents. </p>

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<p>And, the 70K parents feel quite rich at the public schools where half the class gets free lunch. It really is all relative.</p>

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<p>No. It is absolute too. $370,000 is more than $70,000. </p>

<p>Most kids learn that at an early age.</p>

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<p>LOL. I realize it’s a lot more money but if people want to say they are not rich because someone else is REALLY RICH it’s okay by me. And, if someone else is happy enough on 100K and thinks they’re doing okay then they probably have figured out how to be okay and that’s great, too. I don’t get this discussion at all. Some people have more money than other people. Is this a newsflash? I do agree there are too many people in poverty, though. Way too many. But the question was about the dividing line between middle class and rich. I think the line is relative.</p>

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<p>Dstark, doesn’t the claim of the US having the highest poverty rate and the lowest level of social expenditure sound a little odd to you?</p>

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<p>I dont think there is a line. More like Jello. On one side of the Jello, people are definitely not rich and on the other, people are definitely rich. Then there are those sloshing around in Jello. Those people may be rich. May not be rich. </p>

<p>I dont think $100,000 is rich. People can be happy or content and not be rich. There are plenty of miserable rich people too.</p>

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<p>How many people is the right number of people in poverty? </p>

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<p>dstark, that may be true, but I’d rather be miserable and well fed than miserable and hungry. </p>

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<p>“Dstark, doesn’t the claim of the US having the highest poverty rate and the lowest level of social expenditure sound a little odd to you?”</p>

<p>It is total bs and depends on what is meant by poverty rate. That being said, regardless of the fact that on an absolute basis, most of the developing and third world nations have much more and extreme poverty than we do, doesn’t mean that we as the richest country in the world should allow the poverty that we have.</p>

<p>and as far as what it means to be middle class in manhattan: <a href=“PolitiFact | Does earning $500,000 in Manhattan make you middle class?”>http://www.politifact.com/truth-o-meter/statements/2013/mar/27/sal-albanese/does-earning-500000-manhattan-make-you-middle-clas/&lt;/a&gt;, the bottom line is that the median income according to the article is 66k. So somehow 50% of people are able to live there, making less than 66k.</p>

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<p>This ties into how being “rich” may be dependent upon where you live as how much it costs to be happy apparently is state dependent: <a href=“Here Is The Income Level At Which Money Won't Make You Any Happier In Each State | HuffPost Impact”>HuffPost - Breaking News, U.S. and World News | HuffPost. </p>

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<p>“Dstark, doesn’t the claim of the US having the highest poverty rate and the lowest level of social expenditure sound a little odd to you?”</p>

<p>The United States does not have the highest poverty rate. </p>

<p>Why is the relationship between social expenditure and poverty odd?</p>

<p>What’s odd is two people liked your question. :)</p>

<p>Edit…Hayden…you are being naughty. :)</p>

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<p>Well for one…</p>

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<p>So many safety net programs won’t affect the poverty level at all, the way it’s defined and measured in the US.</p>

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<p>So Vlad, you are saying social expenditure helps alleviate poverty. </p>

<p>I agree.</p>

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<p>No, he’s saying the benefits are not counted as income so we’re not counting the alleviating for some reason. Assets don’t count either. I agree it’s odd.</p>

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<p>Nope. Saying the literal opposite of that. </p>

<p>For instance, say the government gave everyone free housing, not the money for housing, just the housing itself. Poverty level would be unchanged. </p>

<p>Alternatively the government could eliminate poverty completely by making “minimal diet” food free for all. Thus someone who makes $0 a year would officially be infinitely higher than the federal poverty level. </p>