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Yeah, I'm sorry, but that Business Insider link is complete garbage. You are most definitely not middle class in Michigan if you're making 32k a year. In addition, you are certainly not middle class in the state I just moved from (Utah) making only 39k a year. Those incomes afford you the bare minimum of survival.
That link is just mainstream media perpetuating the lie that people are doing better than they really are. Let's think for a moment about what 32k a year gets you here. That's a gross income in $2700 a month, according to a quick calculator, with 1 kid, that would be a take-home of about $2250 after taxes.
All right, so we need somewhere for our hypothetical family to live. Let's say a modest 2 bedroom place in Sterling Heights - maybe $1000 a month. Utilities will cost probably $100 a month on the small apartment and they're on a budget so they have a regular cell phone, it costs $50 a month.
Health insurance is required (thanks Obama!), but luckily they will qualify for a small subsidy so decent coverage for the family runs us $300 a month.
We've got to get to work and there is no useful transit here, so a modest car payment is about $150 a month, add in $150 a month for insurance and maybe $100 a month for gas. Let's hope they only have 1 job, because if they need 2 jobs to get to 32k, that isn't going to work in our little calculation.
Food is good, I like to eat, but we can't afford to have them eat out, so the grocery bill runs our hypothetical family about $100 a week - or $400 a month.
Am I missing anything? Does our hypothetical family have student loan debt? Credit card debt? Do they have incidental costs? Do they buy clothes? furniture? appliances? Do they have a medical co-pay? Do they like to go to a Tigers game now and then? Do they ever aspire to home ownership or retirement? Are they saving for those milestones?
I hope the answer to every single one of those questions is no, because they've already blown through their $2,250 budget just to have a small apartment in Sterling Heights, basic utilities, a cheapo phone, one 8 year old car, health insurance, and groceries. They literally can't afford anything else. They're living the life of 1980s poverty - going paycheck to paycheck hoping nothing breaks - and we're seriously calling that middle class? Your article is bullcrap. How do people not see this?
Everyone likes to think they are "middle class" because they see a Dan Gilbert and know they aren't rich but don't want to be labeled as poor ("EBT" or bridge card). So you have variations - lower middle class, middle class and upper middle class.
You'd be surprised how well you can live at all levels of that spectrum. And be happy doing it.
People who are poor/lower middle class do not buy clothes new at Macy's. They go to church garage sales and fill bags for $2-$10. They shop 5 for $5 sales at Salvation Army/Goodwill. They buy most things at Dollar Tree/Aldi/Walmart and actually create for themselves a rather comfortable life. They don't take trips to Disney or fly on cruises but that doesn't matter. In fact most have never been to a Tiger game, Red Wings game, Lions game or Pistons game. And frankly are okay with that - because they've learned to enjoy life without doing those pursuits. Eating is done at fast food/dollar menus, mostly cooked at home or buffets for special events.
As incomes rise - the tastes expand. Middle Class people are more conscious about being caught shopping second hand (unless it's for fun vintage as opposed to necessity). They prefer to shop at Kohl's, Target and discount big box stores (Marshalls, TJ Maxx etc). Many in the middle class went to college, unlike the poor/lower middle class and because of it have sizable debt balances from student loans which aren't forgiven in bankruptcy. They enter the workforce with an expectation of about 40-60K but also an expectation of moving into a 120-220K home. Middle class wouldn't want to be seen in a Ford Fiesta so they get a car payment that reflects their desired upward mobility. They also see/hear and are invited to professional sporting events, concerts, trips etc. These competing demands for their dollars, coupled with debt from purchases, actually leads to more stress in managing finances/budgets than the poor/lower middle class have. They also are more envious of those who make more - because they feel entitled to have the same outcome (i.e. I went to college, I have a masters, I have a PHD).
The upper middle class share purchasing power with the middle class but also replace the spending habits with higher priced purchases. Instead of a 100-200K home, they want a 274-475K home, they want an imported car, they want a boat and thus the same percentage of their paycheck may go to mortgage/toys/debt as middle class - they're just nicer things. Upper middle class tends to receive bonuses for work (i.e. management) so they have spurts of more disposable income to use for emergency funds/rainy day. They eat out when they want, don't worry about gas prices and generally live stress free - aside from AMT tax time.
The truly rich - we all work for them and they thank us for our efforts as their net worth grows in the m/billions.
Upper middle class tends to receive bonuses for work (i.e. management) so they have spurts of more disposable income to use for emergency funds/rainy day. They eat out when they want, don't worry about gas prices and generally live stress free - aside from AMT tax time.
m/billions.
Our bonuses always disappeared quickly. AMT, property tax, property insurance, family medical deductible, braces, home and car repairs. It was rare we had anything left for purchases or savings.
Oddly now that I make half as much as seven or eight years ago, we seem to live better. I think that is because we are ore careful with our money. We give less away, and we have 3-4 fewer kids at home and only one in college right now.
Yeah, I'm sorry, but that Business Insider link is complete garbage. You are most definitely not middle class in Michigan if you're making 32k a year. In addition, you are certainly not middle class in the state I just moved from (Utah) making only 39k a year. Those incomes afford you the bare minimum of survival.
That link is just mainstream media perpetuating the lie that people are doing better than they really are. Let's think for a moment about what 32k a year gets you here. That's a gross income in $2700 a month, according to a quick calculator, with 1 kid, that would be a take-home of about $2250 after taxes.
All right, so we need somewhere for our hypothetical family to live. Let's say a modest 2 bedroom place in Sterling Heights - maybe $1000 a month. Utilities will cost probably $100 a month on the small apartment and they're on a budget so they have a regular cell phone, it costs $50 a month.
Health insurance is required (thanks Obama!), but luckily they will qualify for a small subsidy so decent coverage for the family runs us $300 a month.
We've got to get to work and there is no useful transit here, so a modest car payment is about $150 a month, add in $150 a month for insurance and maybe $100 a month for gas. Let's hope they only have 1 job, because if they need 2 jobs to get to 32k, that isn't going to work in our little calculation.
Food is good, I like to eat, but we can't afford to have them eat out, so the grocery bill runs our hypothetical family about $100 a week - or $400 a month.
Am I missing anything? Does our hypothetical family have student loan debt? Credit card debt? Do they have incidental costs? Do they buy clothes? furniture? appliances? Do they have a medical co-pay? Do they like to go to a Tigers game now and then? Do they ever aspire to home ownership or retirement? Are they saving for those milestones?
I hope the answer to every single one of those questions is no, because they've already blown through their $2,250 budget just to have a small apartment in Sterling Heights, basic utilities, a cheapo phone, one 8 year old car, health insurance, and groceries. They literally can't afford anything else. They're living the life of 1980s poverty - going paycheck to paycheck hoping nothing breaks - and we're seriously calling that middle class? Your article is bullcrap. How do people not see this?
All that article did was take the reported salary bands and report out the percentiles. Like you said, that does not take into account the cost of living for each area. At $32K with 2 kids you're renting a 2-bedroom hovel in River Rouge.
Well maybe a better way to have put it is that if we are going to define "middle class" by a few metrics I would assume most believe are standards of being middle class:
Financial Autonomy (no government subsidies or needing money from family/church)
Ability for modest home ownership, if desired, or rent a comparable home.
Ability to have a surplus fund to afford incidental expenses without debt.
If we're going to define middle-class, we should use metrics rather than formulated percentiles as the article did. Those are not excessive metrics and 32k gets you no where close to middle class in Metro Detroit. The reality is that 50k would be the bare minimum you could have that on and since 50k is just about median income for the metro - about half of all Metro Detroiters are poorer than middle class. Note: This is not only Detroit, as 50k is about median income for the nation as well, and for an urban area, Metro Detroit is actually probably better off due to the lower cost of living when compared to other large urban areas.
I realize I'm getting off topic here, but despite the absurd amounts of wealth in America, most Americans are poor, but the majority of people posting on a board about demographics, urban development and sociology are probably not poor, so many of us don't realize this.
Yesterday while I was talking to my siblings about "pell grant" and financial aid from university. We ended up looking at income limit when government aid stops & then looked in poverty limit. While reviewing this information I exclaimed "wow we must have been really poor growing up". We qualified for pell grant while both of my parents were working. of course there was 4 school age kids but still only a decade later, we seem to have forgotten what being true poor means and how low the government aid threshold is.
It's amazing to me that there are multi person households earning less half of what my girlfriend and I make combined being called middle class, that is for sure. That being said, my girlfriend on her own makes $40k and could probably easily maintain our lifestyle without my income simply by cutting things in half so again, it really strongly depends on household size.
It's amazing to me that there are multi person households earning less half of what my girlfriend and I make combined being called middle class, that is for sure. That being said, my girlfriend on her own makes $40k and could probably easily maintain our lifestyle without my income simply by cutting things in half so again, it really strongly depends on household size.
Yes. Supporting seven people on one income requires a much bigger income to push into upper middle than supporting three or four on two incomes.
Coming from CO, the price of living here in detroit was a shock. I was expecting it to be cheaper, but it is just as pricey if not more so.
I live in Dearborn. Good luck finding a decent place to live for ~1000/mo. 800 will get you like a single bedroom. 500 will get you a place but it will be in east dearborn.
I was looking for places to rent in west dearborn and I was not impressed at the 1000 price level. 1200 seems to be the magic spot up here for good living. Mind you, a 1200/mo rent is crazy high for the size of the place. If you are going to be here for more than 2 years, you are better off buying. Buying the house I am at ~90k would literally give me a mortgage of half my rent.
Another sticker shock moving up here was the price of auto insurance. Full coverage for 2 vehicles in CO was ~$100/mo. Same coverage for the same two vehicles (1995 4runner and 2011 GTI) up in Canton, MI was ~200/mo. Same coverage for the same two vehicles in Dearborn ~400/mo. I now have a 2001 Lexus LS430 (think big and slow) and a 2012 Rav 4 and pay ~150/mo. Full on one vehicle and just liability for the lexus.
Taxes are also higher here. If looking to buy, be cognizant of the property tax. I may be able to buy a house for 200k, but the property tax would easily add like $400/mo on top of your P&I. In CO, property taxes were 0.5% vs the 2.5% or so we have here. I have no idea why it is so expensive. CO had better roads, better schools, cheaper living but I digress.
In the end, it ended up being a wash between CO and here even though I make 5k more money here (75k vs 80k).
The entire economics dialogue is a scam. What does moderate wage growth matter if health insurance and education costs -- things many if not most people consider necessities, not luxuries -- grow by double digit percentages every year?
Between stagnating wages and the rising costs of healthcare, education, retirement and everything else, more and more people are simply feeling as if they are not equipped to meet the daily necessities of life.
Thus a self-avowed socialist and a quasi-fascist getting a huge percentage of the vote this year. Two sides of the same coin.
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