This is a misleading take on the data. A much better analysis would look at the size of the population who was middle class or upper class. If there is an equal increase in upper class population for every loss of middle class population, that just means that our incomes as a population are increasing. All things equal, both the mean and median would increase in that circumstance.
And that's what the data looks like to a large degree. The middle class has shrunk from 61% to 50%, but the upper class has increased by nearly the same amount, 14% to 21%. Yes, that is a decrease in the middle class-or-better bucket, but it's nowhere near dire enough to be described as a tipping point. I agree that the shrinking middle class is something that needs to be discussed, but this article does the discussion a giant disservice.
The article is just stating the middle class is shrinking - and inequality is therefore increasing. And increasing inequality is a problem.
The problem with increasing inequality is not necessarily decreasing mean incomes. Inequality is a problem because of the increasing class-based polarization of society, the power differential between different families, and a host of other factors. All of which can be present and problematic regardless of whether mean incomes are increasing.
This article isn't even implying that mean incomes are decreasing.
I'm not clear why this article does the discussion a great disservice.
I'm not sure that class-based polarization is inherently problematic. Surely some degree of inequality is an inviolable consequence of a society that values both freedom and private ownership.
Imagine an America in which the poorest families had two cars and a four-bedroom house, in a safe neighborhood with good schools. Would it then be considered problematic if Gates and Buffet became trillionaires?
The problem is poverty; the problem is that the south pole is too far south. It's problematic that many still don't have access to the fundamental Maslow's. The space between the poles isn't.
> Imagine an America in which the poorest families had two cars and a four-bedroom house, in a safe neighborhood with good schools. Would it then be considered problematic if Gates and Buffet became trillionaires?
Yes, it would be very problematic, but not out of any sense of fairness. Unless you can find a way to decouple wealth and power, such an outsized accumulation of wealth (and therefore, of power) would be a threat to democracy. Your hypothetical, even if achievable, is not a stable one because the ruling and capitalist classes would own our government to a degree that would make even our present situation look like a sort of egalitarian paradise. It would quickly become hopelessly corrupt, and without robust representation in government, it would only be a matter of time before the rest of us were remade into serfs.
> I'm not sure that class-based polarization is inherently problematic
The way people behave when there is class-based polarization in the US is inherently problematic.
The simple fact is the lower class has to be subsidized and that money largely has to flow from the upper class. The middle class, for the most part, is a break even proposition once you factor in the cost of Medicare & Social Security for the middle class.
Its a large part of why one party is so quick to blame "entitlements" is as long as they can remain on the offensive, their benefactors are largely protected.
Yes, but if a chunk of the middle class moved to the upper class, is that in and of itself a bad thing? Is it really preferable that no middle class move to the upper class?
Exactly! If we the entirety of the middle class disappeared and reappeared in the upper class, how would that be damaging to the country? If every member had no change or an increase to their income, it seems insane that that could have anything but a positive effect for the economy.
It's very important (for fairness, and for social stability) that the lower class have at least a somewhat realistic possibility of crossing the gap into middle class. If they have to jump all the way to upper class, does that mean that they're more likely to be trapped in lower class? That's a bad outcome for them. (It's fine for the middle class, of course.)
But is it inequality from one person to another, or just unequal life stages for the same individual?
You could imagine a college student from a middle-class background earning very little from 20-30, then being middle-income from 30-40, then upper-income from 40-65, then retired until 85.
Their independent life (20+) is 65 years, of which 30 are low-income, 10 middle-income, and 25 high income.
Unequal life stages certainly contribute to inequality, but the Atlantic published an article this summer discussing research on intergenerational socioeconomic mobility: "Children born to 90th-percentile earners are typically on track to make three times more than the children of 10th-percentile earners." So socioeconomic class is definitely a big part of the equation.
Generally incomes and wealth increase with age. If your population is more heavily weighted in one particulat age bracket (baby boomers?), you'll see a shift in wealth distribution, even if everyone's average wealth at a give age remains the exact same.
> If there is an equal increase in upper class population for every loss of middle class population, that just means that our incomes as a population are increasing.
> Yes, that is a decrease in the middle class-or-better bucket
Huh? Wat? Ignoring your contradiction completely, 1.5-2 million people dropped.
2% of ~100million working people is ~2 million people. 2 million people dropped out of the middle class to the lower class. 2,000,000. Two-million individuals. Two commas. Not to mention their kids. Or their retired parent(s).
If you're interested in charting broad trends in a very large population, two million people may not be that relevant to your work. That's not any kind of moral judgement of those people or an argument to ignore their problems, it's just a statement of fact.
Why are you assuming they came from the middle class and not the upper class? Populations in each class are not static. Over that time period, folks moved from the lower class to the middle and upper.
> If there is an equal increase in upper class population for every loss of middle class population, that just means that our incomes as a population are increasing
If they were defining boundaries by inflation-adjusted income, that would be correct.
They are defining them by ratio to the median income, so more upper "class" at the expense of the middle "class" by the standards used just means increased income inequality, not increased real wealth. (It could accompany increased or decreased real wealth, but its a completely separate thing.)
The title of the paper is:
GOOD JOBS ARE BACK:
2015
College Graduates Are First in Line
and the first listed funding source is the Lumina Foundation, whose first line on the about page says:
> Lumina Foundation is an independent, private foundation committed to increasing the proportion of Americans with high-quality degrees, certificates and other credentials to 60 percent by 2025.
Measuring "class" by income distribution measures like this kind of misses the point; more accurately this is "Most Americans no longer fit a particular definition of 'middle income'".
Class distinctions are about significant qualitative distinctions, not points on a simple quantitative distribution. A reasonable upper/middle/lower class distinction could be made where the upper class has capital assets that they can and do live off the proceeds of while increasing the value and annual proceeds of the assets, the middle class has capital assets that they could (whether or not they do -- they may still work at wage labor) live for at least some months on by depleting, and the lower classes are entirely dependent on wage labor (and one could make further distinctions within these groups).
This would roughly correspond with the traditional ideas of "class".
EDIT: Which is all not to discount the potential significance of an ongoing increase in income inequality -- which almost certainly has some real impact in terms of the kind of things that would reasonably define class.
And one very good reason not to conflate income and class is cost of living.
A family making 130k in any major metro area is far from upper class. It's upper class in small towns. I'd venture most people making 130k+ are not in any way upper class.
And a family making 40k isn't lower class in a lot of the country.
I think class is only a little bit about money and assets.
You can be very poor, but have middle class education, culture and tastes, and you can be very rich, but have working class culture and tastes.
If you mean wealth, then say wealth. If you're talking about 'class' instead, then you must mean something more than that, otherwise you wouldn't have used the word.
What I was referring to are economic classes -- which are about ones relation to the economy and manner of interaction, and closely related to (though not identical to) wealth -- you seem to be talking about subcultures which have a loose correlation with economic classes.
I think chrisseaton is making the distinction between "social class" and "economic class", which is pronounced in many countries, but in other countries (USA for instance), there's little distinction.
To me it's a simpler, binary question: You're either rely on your own labor for a living (in other words, you're N missed paychecks away from zero), or you don't rely on your own labor. Some people think if their number "N" is high enough they can call themselves "middle class" to distinguish themselves from poorer people, but it's a small distinction. At the end of the day, you either have to work for a living or you don't.
If you have to work for a living, your life is similar to everyone else who has to work for a living. Sure you may have more toys than others, but the things you think/worry about from day to day are similar.
If you are in the class that relies on their assets for a living, you think about entirely different things, and your world view and lifestyle are entirely different. If you ever get a chance to hang around people like this or talk with them, do it--it's eye opening. It's like having an alien encounter.
I think "middle class" is "working class (by your definition) but headed out". That is, you are middle class if you are working and making enough by doing so to start accumulating capital.
If you're working, and using your surplus to accumulate toys, you're just a wealthier version of lower class (also a not very wise one, in my opinion).
Is your have tons of disposable income and you blow it on toys, you aren't lower class. You're just really bad at managing your money.
It's absurd to try to define middle class by behavior rather than means. Someone making 100k/year is absolutely not lower class, regardless of whether they blow all their money on frivolous stuff.
> Some people think if their number "N" is high enough they can call themselves "middle class" to distinguish themselves from poorer people, but it's a small distinction
That isn't true. I work for a living but I also accumulate 5 figures of capital every year, do that for 20-25 years, and I don't have to work for a living anymore.
Working class folks don't really have that option.
> Sure you may have more toys than others, but the things you think/worry about from day to day are similar.
That is poor financial planning. If you are middle income, you should be saving money so you don't have to work for a living instead of buying more toys.
That is poor financial planning. If you are middle income, you should be saving money so you don't have to work for a living instead of buying more toys.
That is an entirely subjective personal preference. If your goal is to be able to retire early and live off your savings, go ahead. However, if your goal is to also live before you retire and you understand that the only value of money is in the things you value that you can obtain with it, you might make entirely different financial choices.
I could have saved a lot more than I have if my now-wife and I had chosen not to have the wedding we always dreamed of, but no amount of money in the future could replace the memories we have of that day. I could have saved a lot by not going to lessons with top teachers/coaches in my hobbies, but then I would not be as good at things I enjoy doing today, and I would not be able to reach new levels tomorrow. In the case of physical/competitive hobbies, there are some things I simply would never be able to do if I left them to later in life. I could have saved the money I spent on buying a nice new car, but that car has meant I could get to places and do things I would otherwise not have been able to, and again no amount of money can ever replace those experiences.
I am certainly not advocating frivolous spending on things that don't really matter to you, and I am certainly not advocating spending everything you have the day you get it. But the idea that saving everything you can instead of buying some things you value has never made sense to me. It only really makes a difference if you expect that you will one day need all of that money in order to pay for the essentials, and short of catastrophic bad luck it seems unlikely that anyone with the ability to set aside significant savings in the first place will ever be in that position.
don't take these self-important penny-pinchers you find on hn too seriously. their condescension stems from a fundamental insecurity of some sort that they're projecting onto others, it's hard to put a finger on but it's definitely there.
they don't know anyone's situation, they just know spending money on things you like is bad. it's like some kind of alternative religious orthodoxy. imagine if they had the same attitudes about the kind of books you read or the people you hang out with (aka how you spend your time, and time=money)
people should do whatever the hell they want to do with their own money, just like their own time.
> But the idea that saving everything you can instead of buying some things you value has never made sense to me. It only really makes a difference if you expect that you will one day need all of that money in order to pay for the essentials, and short of catastrophic bad luck it seems unlikely that anyone with the ability to set aside significant savings in the first place will ever be in that position.
I've seen catastrophic bad luck happen to enough people who thought it couldn't happen to them and then destroy their marriages/careers/etc pretty thoroughly that I just have no faith that is correct.
> That is an entirely subjective personal preference. If your goal is to be able to retire early and live off your savings, go ahead. However, if your goal is to also live before you retire and you understand that the only value of money is in the things you value that you can obtain with it, you might make entirely different financial choices.
The US savings rate is consistently in the 4-6% range with few outliers. You may want to consider I was assuming people would interpret my statement reasonably and that I was implying spending money instead of saving it when you were saving at an average rate was a bad idea.
And yes, 4-6% is too small if you want to sustain your standard of living in retirement as a middle income member of society.
"Toys" implies frivolity that doesn't involve something people feel are truly necessary to make themselves happy.
Given on HN we know most mid-level devs make ~$70-100k [adjusted for cost of living], saving 20% isn't some extreme world view [which is what it'd take to save 5 figures/year].
>If you have to work for a living, your life is similar to everyone else who has to work for a living. Sure you may have more toys than others, but the things you think/worry about from day to day are similar.
The things I worry about have very little in common with someone who's working a minimum wage job. Someone on minimum wage with a child probably needs food stamps to even feed their child reliably. I spend more on daycare for my child every month than most of the people working at the daycare probably even make. Very different worries.
Lower class people are worried about making rent, putting food on the table, and what happens if they lose their jobs. I'm not worried about any of those things except the last, and I'm not particularly worried and that.
We do not have the same worries.
It's true that I cannot live off my assets indefinitely, but it's inaccurate and misleading to pretend that my worries are the same worries that low wage workers have.
I think you're on the right track here. To me, the middle class is defined not by assets, but by having your survival and security reasonably assured -- to the point, as you say, that you don't have to spend all your time worrying about them. You have to work, but you have some free time and disposable income.
You are worried about the same things, just to different degrees. Both of you depend on selling your time and skills for a paycheck.
A hot dog vendor might make less than you do, but their income depends on leveraging their assets and selling a product. The hot dog vendor is middle class, you are working class. Income isn't really part of the equation.
Of course, that's the strict traditional definition of middle class. Maybe that has changed.
A person who can live off their assets is worried about the same things as well, just to a lesser degree. It's possible to have sufficient assets to live off only to see a market, or an industry, etc. collapse, leaving you with insufficient assets. If you're a billionaire, that's pretty unlikely, but if you're just on the other side of "upper class" it's entirely possible.
Upper class people are also by and large selling their time and skills. Some of them are sitting idly, but most of them are engaged in some sort of job, whether that's a high-ranking executive position, or managing their own companies, etc.
"Middle class" cannot simply mean "works for wages", because that includes the entire working class. "Middle class" is meaningless if it's not more specific.
There are probably some struggling postdocs and adjuncts out there who would take issue with this classification. Also, some very successful skilled laborers and artisans.
Which actually highlights the unstated cultural elements of class aside from income.
Is an Ivy educated woman working at an NGO for 30k the same class as a shift manager at Walmart making 30k? Is a postdoc at Stanford lower class than a factory worker whose income is triple a postdoc stipend?
We're talking about social classes, not occupational categories though.
Would you say that an immigrant inner-city convenience store owner and a bootstrapped SaaS startup founder are the same social class? They're both working entrepreneurs...
I think this is a somewhat outdated view of classes, at least in our current 'Western' societies. I'm reminded of this article by the BBC that argues that there are seven classes, for example:
It strikes me a bit as the traditional division of 'left' and 'right' in politics that, at least according to multiple professors in my PolSci classes, is not really accurate. Yet it's (understandably) still a commonly used method of classifying politics.
It's not just physicality, it's skill as well. Consider the unskilled call centre operator - low-end service work that is in the same class as low-end physical work, but doesn't tax a muscle.
I've almost always seen class in America to be based on income. It seems useful to publish results that define class by income; it is commonly understood to be income; income may not have as much a correlation with power and quality of life as capital as you suggest, but i preaume that it is still large. Finally, the deciding reason to measure income class is the probable assumption that it is far easier and far more accurate to obtain estimates on the income of US citizens than on their net worth.
The problem with inequality is the polarization, the haves and the have nots with no in between. That leads to a more brutal society where there is no ground for agreement.
> This would roughly correspond with the traditional ideas of "class".
That's the thing though. The concept of social class in the US doesn't. So while I agree with you, there's nothing strange with the article.
"Social class in the United States is a controversial issue, having many competing definitions, models, and even disagreements over its very existence. Many Americans believe in a simple three-class model that includes the "rich", the "middle class", and the "poor". More complex models that have been proposed describe as many as a dozen class levels; while still others deny the very existence, in the European sense, of 'social class' in American society."
Yet most Americans have no problem supporting either an asshole billionaire or someone who thinks it's "their turn to be president" and is supported by Wall Street billionaires (the same people responsible for the 2008 economic crash).
Most people don't seem to know what's good for them.
In my area, polls are open from 9 AM (or maybe earlier - I'm not a morning person) to 9 PM. No matter what your shift, you should be able to find a time to get there without having to take off work.
Clinton is supported by about 50% of Democrats. Trump is supported by about 25% of Republicans. That doesn't add up to anywhere close to "most Americans."
I really, really doubt that we'll be forced to choose between Clinton and Trump. Clinton, yes, but the Republicans aren't that insane.
In any case, saying that a broken system forces us to choose the lesser of two evils is quite different from saying that most Americans support one of these two candidates.
I wouldn't put it past them to choose Trump, but either way, the other leading contenders like Ben Carson or Ted Cruz are even more whacked-out. And god forbid the Bush dynasty would continue...
Of the Republican candidates, the only ones I find less crazy than Trump -- and to be clear, I more or less despise everyone I'm about to list -- are Carly Fiorina, Rand Paul, and perhaps Marco Rubio. Fiorina and Rubio because, maybe, they don't actually believe some of the panderous garbage that they say, and Paul because he occasionally expresses some anti-war sentiment (even if it's motivated by his desire to decrease federal spending).
I totally understood the difference, I was trying to say that it doesn't really matter. We need to fix the broken system, but I am not aware of any candidates having any workable ideas...
It matters in terms of what conclusions you can draw about the American people (the original comment up there was attempting to use widespread support for these candidates as evidence that Americans don't know what's good for them), and in terms of what's required to fix the problem. I agree that as far as the outcome goes it doesn't matter much.
Where do the 42k and 126k numbers come from? Why do they define the middle class.
Maybe it varies from page view to page view, but my very first recommended link at the bottom of the story had a breakdown of middle class bounds in 30 different cities, and as one would expect, middle class incomes vary widely across those cities.
This article is a perfect example of the meaninglessness of averages in many cases.
I see people commenting in the technicalities of a middle class definition. They should be worried with the tendency. As a foreigner, my great admiration of the American society is that of the Self Made Man. That working hard you can have a decent life and even become rich. That everybody should have the same opportunities. Even if this is all a myth, just the belief and the desire to make it happen, is great.
> As a foreigner, my great admiration of the American society is that of the Self Made Man. That working hard you can have a decent life and even become rich. That everybody should have the same opportunities. Even if this is all a myth, just the belief and the desire to make it happen, is great.
So go watch a movie or read a book about it. The actual reality which doesn't care about your fanciful beliefs will be waiting for when you're ready to return.
This could also represent a compression of income-earning years. For instance, if more people spend their twenties earning little, but then their income jumps up a lot by the time they are 40, they may look middle-income for only a few years.
I'm not saying this is what's happening, but based on the numbers and definitions, it's possible.
In general, this kind of snapshot definition trying to capture the middle class is misleading. You should follow individuals over their life to see whether they are thriving or struggling.
This is not even a class mobility issue. It's more of a life cycle issue.
If everybody has a college degrees, then all jobs would indeed go to people with a college degree. But even then, it would still not say anything about the likelihood to get a job, even if you hold a college degree. "If you get a college degree, you will get a job" is and has always been a fallacy.
Wouldn't it make more sense to use the ratio of income to housing costs in the analysis instead of raw income numbers? Houses can easily be 10-20x as expensive depending on where in the us you live.
Lots of hocus-pocus in these comments looking for a qualitative measure of class. The only meaningful definition is quantitative. Do we still need to explain why? This fact is the fundamental subtext of all journalism and art since mid 19C.
These studies need to take into account cost of living in different cities, which has more variance than it used to. $120k in SF or NY is barely going to get you in the middle class. If high earnering gains have been made in these cities, then the actual distribution would be much worse.
Middle class is an elusive term. How much would someone living and working in New York City have to make to be considered middle class verse someone living in say Detroit?
Exemptions at the federal level seem to overlook this fact.
Slightly misleading title, would have been more accurate to say "Majority of Americans No Longer Are Middle Class". The current breakdown is basically 49.9% Middle Class, 50.1% not. That's a long way from "most".
I wouldn't call it a tipping point. If you look at the diagram hard enough you will see that for example since 2011 the lower class has shrunk and the upper class have become larger. This means that part of the middle class turned into upper class!
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[ 4.5 ms ] story [ 201 ms ] threadAnd that's what the data looks like to a large degree. The middle class has shrunk from 61% to 50%, but the upper class has increased by nearly the same amount, 14% to 21%. Yes, that is a decrease in the middle class-or-better bucket, but it's nowhere near dire enough to be described as a tipping point. I agree that the shrinking middle class is something that needs to be discussed, but this article does the discussion a giant disservice.
The problem with increasing inequality is not necessarily decreasing mean incomes. Inequality is a problem because of the increasing class-based polarization of society, the power differential between different families, and a host of other factors. All of which can be present and problematic regardless of whether mean incomes are increasing.
This article isn't even implying that mean incomes are decreasing.
I'm not clear why this article does the discussion a great disservice.
Imagine an America in which the poorest families had two cars and a four-bedroom house, in a safe neighborhood with good schools. Would it then be considered problematic if Gates and Buffet became trillionaires?
The problem is poverty; the problem is that the south pole is too far south. It's problematic that many still don't have access to the fundamental Maslow's. The space between the poles isn't.
Yes, it would be very problematic, but not out of any sense of fairness. Unless you can find a way to decouple wealth and power, such an outsized accumulation of wealth (and therefore, of power) would be a threat to democracy. Your hypothetical, even if achievable, is not a stable one because the ruling and capitalist classes would own our government to a degree that would make even our present situation look like a sort of egalitarian paradise. It would quickly become hopelessly corrupt, and without robust representation in government, it would only be a matter of time before the rest of us were remade into serfs.
The way people behave when there is class-based polarization in the US is inherently problematic.
The simple fact is the lower class has to be subsidized and that money largely has to flow from the upper class. The middle class, for the most part, is a break even proposition once you factor in the cost of Medicare & Social Security for the middle class.
Its a large part of why one party is so quick to blame "entitlements" is as long as they can remain on the offensive, their benefactors are largely protected.
People move from class to class all the time.
You could imagine a college student from a middle-class background earning very little from 20-30, then being middle-income from 30-40, then upper-income from 40-65, then retired until 85.
Their independent life (20+) is 65 years, of which 30 are low-income, 10 middle-income, and 25 high income.
Another consideration is household size. Before, retirees may have been more likely to live with their children, but now they live more independently.
http://www.daemonology.net/blog/2011-01-10-inequality-in-equ...
Generally incomes and wealth increase with age. If your population is more heavily weighted in one particulat age bracket (baby boomers?), you'll see a shift in wealth distribution, even if everyone's average wealth at a give age remains the exact same.
> Yes, that is a decrease in the middle class-or-better bucket
Huh? Wat? Ignoring your contradiction completely, 1.5-2 million people dropped.
2% of ~100million working people is ~2 million people. 2 million people dropped out of the middle class to the lower class. 2,000,000. Two-million individuals. Two commas. Not to mention their kids. Or their retired parent(s).
If you're interested in charting broad trends in a very large population, two million people may not be that relevant to your work. That's not any kind of moral judgement of those people or an argument to ignore their problems, it's just a statement of fact.
If they were defining boundaries by inflation-adjusted income, that would be correct.
They are defining them by ratio to the median income, so more upper "class" at the expense of the middle "class" by the standards used just means increased income inequality, not increased real wealth. (It could accompany increased or decreased real wealth, but its a completely separate thing.)
Beyond that, I don't see how it's better in some general sense.
Let me ask it another way. If some moves from the lower class to the middle class, does that benefit society as a whole (ignoring the taxes).
I would say yes.
The problem is more one of polarization than average wealth.
and the first listed funding source is the Lumina Foundation, whose first line on the about page says:
> Lumina Foundation is an independent, private foundation committed to increasing the proportion of Americans with high-quality degrees, certificates and other credentials to 60 percent by 2025.
Class distinctions are about significant qualitative distinctions, not points on a simple quantitative distribution. A reasonable upper/middle/lower class distinction could be made where the upper class has capital assets that they can and do live off the proceeds of while increasing the value and annual proceeds of the assets, the middle class has capital assets that they could (whether or not they do -- they may still work at wage labor) live for at least some months on by depleting, and the lower classes are entirely dependent on wage labor (and one could make further distinctions within these groups).
This would roughly correspond with the traditional ideas of "class".
EDIT: Which is all not to discount the potential significance of an ongoing increase in income inequality -- which almost certainly has some real impact in terms of the kind of things that would reasonably define class.
A family making 130k in any major metro area is far from upper class. It's upper class in small towns. I'd venture most people making 130k+ are not in any way upper class.
And a family making 40k isn't lower class in a lot of the country.
You can be very poor, but have middle class education, culture and tastes, and you can be very rich, but have working class culture and tastes.
If you mean wealth, then say wealth. If you're talking about 'class' instead, then you must mean something more than that, otherwise you wouldn't have used the word.
If you have to work for a living, your life is similar to everyone else who has to work for a living. Sure you may have more toys than others, but the things you think/worry about from day to day are similar.
If you are in the class that relies on their assets for a living, you think about entirely different things, and your world view and lifestyle are entirely different. If you ever get a chance to hang around people like this or talk with them, do it--it's eye opening. It's like having an alien encounter.
If you're working, and using your surplus to accumulate toys, you're just a wealthier version of lower class (also a not very wise one, in my opinion).
It's absurd to try to define middle class by behavior rather than means. Someone making 100k/year is absolutely not lower class, regardless of whether they blow all their money on frivolous stuff.
That isn't true. I work for a living but I also accumulate 5 figures of capital every year, do that for 20-25 years, and I don't have to work for a living anymore.
Working class folks don't really have that option.
> Sure you may have more toys than others, but the things you think/worry about from day to day are similar.
That is poor financial planning. If you are middle income, you should be saving money so you don't have to work for a living instead of buying more toys.
That is an entirely subjective personal preference. If your goal is to be able to retire early and live off your savings, go ahead. However, if your goal is to also live before you retire and you understand that the only value of money is in the things you value that you can obtain with it, you might make entirely different financial choices.
I could have saved a lot more than I have if my now-wife and I had chosen not to have the wedding we always dreamed of, but no amount of money in the future could replace the memories we have of that day. I could have saved a lot by not going to lessons with top teachers/coaches in my hobbies, but then I would not be as good at things I enjoy doing today, and I would not be able to reach new levels tomorrow. In the case of physical/competitive hobbies, there are some things I simply would never be able to do if I left them to later in life. I could have saved the money I spent on buying a nice new car, but that car has meant I could get to places and do things I would otherwise not have been able to, and again no amount of money can ever replace those experiences.
I am certainly not advocating frivolous spending on things that don't really matter to you, and I am certainly not advocating spending everything you have the day you get it. But the idea that saving everything you can instead of buying some things you value has never made sense to me. It only really makes a difference if you expect that you will one day need all of that money in order to pay for the essentials, and short of catastrophic bad luck it seems unlikely that anyone with the ability to set aside significant savings in the first place will ever be in that position.
they don't know anyone's situation, they just know spending money on things you like is bad. it's like some kind of alternative religious orthodoxy. imagine if they had the same attitudes about the kind of books you read or the people you hang out with (aka how you spend your time, and time=money)
people should do whatever the hell they want to do with their own money, just like their own time.
1) The retirement laws setup basically say that is what you should do which is why their limit is ~$23k/year.
2) Good luck retiring in the future saving less than $10k/year.
3) Literally every financial planner on the planet tells you to save 10-15% of your income which for a developer is going to work out to ~$10k.
I've seen catastrophic bad luck happen to enough people who thought it couldn't happen to them and then destroy their marriages/careers/etc pretty thoroughly that I just have no faith that is correct.
> That is an entirely subjective personal preference. If your goal is to be able to retire early and live off your savings, go ahead. However, if your goal is to also live before you retire and you understand that the only value of money is in the things you value that you can obtain with it, you might make entirely different financial choices.
The US savings rate is consistently in the 4-6% range with few outliers. You may want to consider I was assuming people would interpret my statement reasonably and that I was implying spending money instead of saving it when you were saving at an average rate was a bad idea.
And yes, 4-6% is too small if you want to sustain your standard of living in retirement as a middle income member of society.
"Toys" implies frivolity that doesn't involve something people feel are truly necessary to make themselves happy.
Given on HN we know most mid-level devs make ~$70-100k [adjusted for cost of living], saving 20% isn't some extreme world view [which is what it'd take to save 5 figures/year].
The things I worry about have very little in common with someone who's working a minimum wage job. Someone on minimum wage with a child probably needs food stamps to even feed their child reliably. I spend more on daycare for my child every month than most of the people working at the daycare probably even make. Very different worries.
Lower class people are worried about making rent, putting food on the table, and what happens if they lose their jobs. I'm not worried about any of those things except the last, and I'm not particularly worried and that.
We do not have the same worries.
It's true that I cannot live off my assets indefinitely, but it's inaccurate and misleading to pretend that my worries are the same worries that low wage workers have.
A hot dog vendor might make less than you do, but their income depends on leveraging their assets and selling a product. The hot dog vendor is middle class, you are working class. Income isn't really part of the equation.
Of course, that's the strict traditional definition of middle class. Maybe that has changed.
Upper class people are also by and large selling their time and skills. Some of them are sitting idly, but most of them are engaged in some sort of job, whether that's a high-ranking executive position, or managing their own companies, etc.
"Middle class" cannot simply mean "works for wages", because that includes the entire working class. "Middle class" is meaningless if it's not more specific.
Lower class = your income relies on your physical labor
Middle class = your income relies on your mental labor
Upper class = your income relies on your capital and others' labor
Is an Ivy educated woman working at an NGO for 30k the same class as a shift manager at Walmart making 30k? Is a postdoc at Stanford lower class than a factory worker whose income is triple a postdoc stipend?
Would you say that an immigrant inner-city convenience store owner and a bootstrapped SaaS startup founder are the same social class? They're both working entrepreneurs...
http://www.bbc.com/news/magazine-21953364
It strikes me a bit as the traditional division of 'left' and 'right' in politics that, at least according to multiple professors in my PolSci classes, is not really accurate. Yet it's (understandably) still a commonly used method of classifying politics.
That's the thing though. The concept of social class in the US doesn't. So while I agree with you, there's nothing strange with the article.
"Social class in the United States is a controversial issue, having many competing definitions, models, and even disagreements over its very existence. Many Americans believe in a simple three-class model that includes the "rich", the "middle class", and the "poor". More complex models that have been proposed describe as many as a dozen class levels; while still others deny the very existence, in the European sense, of 'social class' in American society."
https://en.wikipedia.org/wiki/Social_class_in_the_United_Sta...
Most people don't seem to know what's good for them.
Upps forgot the source: http://www.politico.com/magazine/story/2015/01/income-gap-at...
The US has so many smart, hard working people, we deserve better.
In any case, saying that a broken system forces us to choose the lesser of two evils is quite different from saying that most Americans support one of these two candidates.
I wouldn't put it past them to choose Trump, but either way, the other leading contenders like Ben Carson or Ted Cruz are even more whacked-out. And god forbid the Bush dynasty would continue...
Of the Republican candidates, the only ones I find less crazy than Trump -- and to be clear, I more or less despise everyone I'm about to list -- are Carly Fiorina, Rand Paul, and perhaps Marco Rubio. Fiorina and Rubio because, maybe, they don't actually believe some of the panderous garbage that they say, and Paul because he occasionally expresses some anti-war sentiment (even if it's motivated by his desire to decrease federal spending).
get fucked over or do the fucking over
Maybe it varies from page view to page view, but my very first recommended link at the bottom of the story had a breakdown of middle class bounds in 30 different cities, and as one would expect, middle class incomes vary widely across those cities.
This article is a perfect example of the meaninglessness of averages in many cases.
i.e. what would be one standard deviation if income was perfeclty evenly distributed
So go watch a movie or read a book about it. The actual reality which doesn't care about your fanciful beliefs will be waiting for when you're ready to return.
I'm not saying this is what's happening, but based on the numbers and definitions, it's possible.
In general, this kind of snapshot definition trying to capture the middle class is misleading. You should follow individuals over their life to see whether they are thriving or struggling.
This is not even a class mobility issue. It's more of a life cycle issue.
Exemptions at the federal level seem to overlook this fact.