Understanding where you fall in the American economic class system isn’t as simple as pulling out a calculator or looking at a pay stub.
Myriad forces shape individuals’ economic class and their views on where they rank alongside other Americans.
When asked how they identify their social class, 62 percent of Americans said they belonged to the upper-middle or middle classes, according to a 2017 survey from Gallup. In determining their social class, people often don’t just think about income, experts say, but about other factors, including education, location and family history.
Larger economic trends may also impact how people view their class rank.
On one hand, experts note, the American middle class is shrinking, with individuals moving toward the higher- and lower-income brackets. “There’s a loss of jobs in the middle and growth at the top and bottom,” says Robert J. Gordon, professor of economics at Northwestern University. “In that sense, the middle class has been hollowed out.”
Much of today’s political rhetoric focuses on the challenges facing the middle class. And although household incomes have risen over the past 45 years or so, they’ve actually fallen since 2000 and haven’t fully recovered from the Great Recession, says Richard Fry, senior researcher for Pew Research. “As of 2015, most American households had not recovered to where they were back in 1998,” he says. That short-term decline may lead to feelings of stagnation and frustration, he says. Plus, Fry notes, while most American households are doing better than they were 45 years ago, “the gains have not been equal,” he says. “Everybody’s better off, but it’s particularly the well-off who are better off.”
On the other hand, experts say today’s economy is strong. The unemployment rate was 4 percent in June 2018, and employers are hiring. “Household incomes are supported now in a way they weren’t before, both by [the] decline of unemployment and people coming back into employment,” Gordon says.
So what does this mean in terms of where you fall in the American economic class system? Here’s what to know.
Breaking down economic class by income. One objective way some researchers divide individuals into economic classes is by looking at their income. From that data, they split earners into different classes, often into five groups: poor, lower-middle class, middle class, upper-middle class and wealthy. The income cutoffs that divide those income ranges can change from year to year and between methodologies, but here’s a sense of where they stand, according to the most recent data available.