Redefining The Middle Class: Quit Whining and Downsize

For the past 10 years, it’s seemed like there has been no respite from the constant buzzing about the world’s economic problems. The media and the public are always eager to talk about this, and the most recent hip financial issue to complain and theorize about is the fiscal cliff.

Everything behind the fiscal cliff—the ending of temporary tax cuts and how it would affect the American economy in the short and long term—is incredibly complicated. Throughout the debate, and now that deals have been made, the concept of the middle class has been a constant, and the more people talk about it, the more it becomes clear that we actually have no idea what middle class is.

In the height of the fiscal cliff conversation, I heard an interview on NPR with middle class families who were struggling and would be affected by the expiration of Bush-era tax cuts. The first family interviewed was a youngish couple whose household income was around $110,000. The couple claimed that they had made every budget cut they possibly could and that they were still struggling financially.

While $110,000 is not an absurd amount of money, it is more than enough to live on comfortably. I had always assumed that the middle class consisted of those who make around $40–50,000 a year, but the fiscal cliff debates highlighted that the majority of politicians consider middle class to extend up to those who make $250,000 a year.

I’d like to put this in perspective. I make about $12,000 a year, with which I can pay for rent and necessities, and still have money leftover for spending. Of course having children changes things a lot, but I still don’t see how someone making $40–50,000 a year struggles financially, let alone someone making five times as much.

A large part of the problem seems to stem from our unrealistic expectations of how we should live. Although the numbers are starting to change, Americans have historically bought a new car every three to four years—new as in straight off the lot. The average American household has $120,000 of debt. And, apart from special cases of medical emergencies, this is really no one’s fault but our own.

Any drive through suburbia will show a middle class with a standard of living way beyond anything needed: gas guzzling SUVs, brand new Lexuses, and family homes the size of small mansions line the streets. In 1950, the average American home was 983 square-feet. Now, it is around 2,400 square-feet. I know people who bought houses as soon as they got their first real jobs after college, despite being single and in debt from student loans.

It’s certain that a lot of the country’s economic problems are due to poor choices in the government and big business. But if anything is going to change, our mentality about money needs to change. What we need is not tax cuts; it is to recognize and take responsibility for what we have.