- Economic Terms
ByKimberly Amadeo
Updated on December 30, 2021
Reviewed by
Erika Rasure
:max_bytes(150000):strip_icc()/CSP_ER9-ErikaR.-5942904ef41f4814a94dd1a5c1c03f32.jpg "What Is Middle-Class Income? (1)")
Reviewed byErika Rasure
Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.
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Fact checked byDavid Rubin
In This Article
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In This Article
- How It Works
- How Is Middle-Class Income Measured?
- Alternatives
:max_bytes(150000):strip_icc()/definition-of-middle-class-income-4126870_final-13aa22c370f64fcaa8cc8998f752af8d.png "What Is Middle-Class Income? (2)")
Definition
Middle-class income, or the income of middle-class households, generally ranges between two-thirds and double the U.S. median household income, according to the Pew Research Center.
Definition and Examples of Middle-Class Income
Although the U.S. governmentdoesn't have an official definition ofmiddle-class income, the Pew Research Center considers a household to have "middle-income" if it's between 67% and 200% of themedian household income.
The U.S. Census Bureau found that the 2020 median household income was $67,521. This median income decreased 2.9% from 2019 when the median income was $69,560. For comparison, the median was $58,627 in 2010 and $63,292 in 2000 (calculated in 2020-adjusted dollars).
Using $67,521 as the base, the Pew definition of middle income would include households earning between $45,239 and $135,042.
Note
The U.S. Census Bureau reports mean and median incomesfor the previous calendar year every September. These figures were last released on Sept. 14, 2021.
How Middle-Class Income Works
The Census Bureau estimated that there wereabout 130 million householdsin the United States in 2020. They can be divided into groups that correspond to the Pew definitions of the middle class.
The lowest income groups are within range of the federalpoverty level.As of 2021, the federal poverty level ranges from $12,880 for one person to $44,660 for a household of eight.
The highest income groups roughly correspond to the highest tax brackets for the tax year 2021. These include individuals earning over $523,600, married couples earning more than $628,300, and heads of household earning over $523,600. (For 2022, they'll include singles making more than $539,900, married couples making more than $647,850, and heads of household making more than $539,900.)
This chart shows the breakdown of 2020 income levels using Census data:
| Household Income Range | Number of Households (Millions) | % of Total | Notes | |
| Less than $20,000 | 17.9 | 14% | Below or near poverty level | |
| $20,000 to $44,999 | 26.5 | 20% | Low income | |
| $45,000 to $139,999 | 59 | 45% | Middle class | |
| $140,000 to $149,999 | 2.9 | 2% | Upper middle class | |
| $150,000 to $199,999 | 10.4 | 8% | High income | |
| $200,000+ | 13.3 | 10% | Highest tax brackets | |
| Total | 130 |
How Is Middle-Class Income Measured?
Pewstarts with the U.S. Census Bureau data on median income per household. Then, it createsdifferent middle-class standards for each "metropolitan statistical area." These are Census Bureau areas that correspond to cities. Pew reports 260 of the 384 metropolitan areas.
Pew does this to address discrepancies in the cost of living throughout the nation. For example, housing costs and taxes inSan Francisco are very high. As a result, a middle-class income in San Francisco is much higher than the national median.
Note
CNN provides amiddle-class income calculatorthat will tell you how your household income ranks in your county. It's based on the Pew Research Center's analysis. Pew also developed itsown calculator.
Alternatives to Middle-Class Income
Former U.S. Secretary of Labor Robert Reich suggested that the middle class should be defined as households with income levels ranging from 50% below the median to 50% above it. That would place the middle class between $33,761 and $101,281, based on the Census median income of $67,521.
The Brookings Institution defines the middle class as the middle 60% of households. In other words, everyone from 30% below the median income to 30% above it.
Former President Barack Obama said in 2012 that themiddle class is occupied by families who make less than $250,000. He said this to support an extension of the Bush tax cuts to the middle class only. He did not want those who earned more to receive the tax cut extension.
Congress had a higher definition of the middle class. The American Taxpayer Relief Act extended the tax cuts to anyone making less than $400,000 or couples making less than $450,000.
Many experts warn that income isn't the best way to define the middle class. For example, many people who don't have high earned incomes can still afford a high standard of livingby drawing from high-value retirement funds, investments, or family fortunes.
Similar to measuring middle-class income, middle-class wealth would be the middle three-fifths of the spectrum. Those with zero wealth or less are in debt, while those in the highest fifth are considered wealthy.Here's an example of a breakout of class by net worth:
| Quintile | Mean Net Worth |
|---|---|
| Bottom 40% (two quintiles) | -$8,900 |
| Third Lowest 20% | $81,700 |
| Middle 20% | $273,600 |
| Top 20% | $2,999,000 |
And what about those who don't earn high incomes but spend a lot? They may appear to have a middle-class way of life and live off savings, alimony,or government payments that aren't measured as income.
Professor James Sullivan of the University of Notre Dame proposed a consumption-based measure that included housing, transportation, and entertainment. The consumption measure defined the middle class as households that spend between $38,200 and $49,900 a year.
Key Takeaways
- According to the Pew Research Center, middle-class incomes are generally from two-thirds to double the U.S. median household income.
- There are other definitions of middle-class income, depending on the source.
- Some experts say wealth or consumption are better measures of the middle class.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Pew Research Center. "America’s Shrinking Middle Class: A Close Look at Changes Within Metropolitan Areas." Accessed Nov. 28, 2021.
United States Census Bureau. "Table H-9. Type of Household—All Households by Median and Mean Income," Download "All Races." Accessed Nov. 28, 2021.
United States Census Bureau. "Income and Poverty in the United States: 2020." Accessed Nov. 28, 2021.
Federal Register. "Annual Update of the HHS Poverty Guidelines." Accessed Nov. 28, 2021.
Internal Revenue Service. "Rev. Proc. 2020-45," Pages 5-7. Accessed Nov. 28, 2021.
Internal Revenue Service. "Rev. Proc. 2021-45," Pages 6-7. Accessed Nov. 28, 2021.
U.S. Census Bureau. "HINC-01. Selected Characteristics of Households by Total Money Income," Download Excel Spreadsheet "Household Income in 2020: All Races." Accessed Nov. 28, 2021.
The White House. "OMB Bulletin No. 18-04," Pages 1-3. Accessed Nov. 28, 2021.
Pew Research Center. "Are You in the American Middle Class? Find Out With Our Income Calculator." Accessed Nov. 28, 2021.
Moyers & Company. "Inequality for All," Video at 28:06. Accessed Nov. 28, 2021.
The Brookings Institution. "There Are Many Definitions of 'Middle Class'—Here’s Ours." Accessed Nov. 28, 2021.
The White House. "Remarks by the President on Extending Tax Cuts for the Middle Class." Accessed Nov. 28, 2021.
Congress.gov. "H.R.8 - American Taxpayer Relief Act of 2012." Accessed Nov. 28, 2021.
National Bureau of Economic Research. "Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered?," Page 46. Accessed Nov. 28, 2021.
Meyer, Bruce, C. and Sullivan, James X. "Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families." The American Economic Review, vol. 98, no. 5, Dec. 2008, pp. 2221-2241
The Brookings Institution. "Defining the Middle Class: Cash, Credentials, or Culture?" Accessed Nov. 28, 2021.
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