Income disparity and “Middle Class” assumptions

I had wanted to write about the concept of the middle class and “who counts” back when McCain was criticizing Obama’s tax plans and Palin was self-labeling as a middle class American to explain why those media elites are against her, you betcha. At the same time, I have been teaching Sociology 101 for the first time (after majoring in it in undergrad), which obviously involves a lot of discussion over class, economic inequality, the meritocracy myth, the race-class connection, among other things that are the elephant in the room when addressing income, poverty, and taxation in the United States.

But teaching kept me I was super busy at the time, so I missed the opportunity to write about the realities of American’ income back then, but I have been given another chance with a recent Factcheck.org update, raising the issue of taxes and the poor that I want to discuss. I also thought it would be the perfect lead-in for my new blog, “Speak Truth to Power”, which will focus on social justice and issues of institutional inequality that I am interested in, but seem out of place on Don’t Ya Wish Your Girlfriend Was Smart Like Me?, my gender-sexuality cultural analysis blog.

So without further adieu, I want to delineate a few thoughts about income, the “middle class”, average Americans, and economic disparity. This first part goes back to those campaign moments that bothered me so. The second part takes a look at who exactly are the middle class. And the next parts will touch on issues of taxation, poverty, entitlement, and socialism that came up in the campaign and will not die.

1. During the first presidential debate, McCain made the following comment:

I know that the worst thing we could possibly do is to raise taxes on anybody, and a lot of people might be interested in Senator Obama’s definition of “rich.” (you can simultaneously read the transcript and watch the video here; clip begins at 11: 25 and the exact comment is made at 18:55).

According to Factcheck.org:

  • Obama’s plan will cut the taxes for 95% of families with children and 81.3% of households overall. (citation)
  • “Obama’s plan would raise taxes only on individuals making more than $200,000 a year, or couples or families making more than $250,000.” (citation)
  • “Those reporting adjusted gross income of more than $250,000 to the IRS are projected to make up 2 percent of households next year […] Joint returns with more than $250,000 adjusted gross income and single returns with more than $125,000 adjusted gross income together are estimated to make up 3.1 percent of households next year.” (citation)

So when McCain says we’d be surprised who Obama considers rich, I wonder who he considers rich, if it’s not the mere 3.1% of households making $125,000+ per capita (adult).

But the even bigger question in my mind is that if McCain thinks that singles/families with incomes of $125/$250k are not rich, then who does he think the poor or even the middle class are?

2. Sarah Palin at an October rally (via Washington Independent):

I know what Americans are going through,” she said after the stock markets took another dive last week. “Todd and I, heck, we’re going through that right now even as we speak — which may put me again kind of on the outs of those Washington elite who don’t like the idea of just an everyday, working-class American running for such an office. (emphasis added)

and Palin at the Vice-Presidential debate:

Now you said recently that higher taxes or asking for higher taxes or paying higher taxes is patriotic. In the middle class of America which is where Todd and I have been all of our lives, that’s not patriotic […] We’re going to fight for the middle-class, average, everyday American family like mine.

The Palins earned about $250,000 in 2007, according to the Washington Post. Their family net worth is over $1 million.

Is this what a “middle-class, average, everyday American family” looks like? Who a “working class” American is?

______________________________

Who Is the Middle Class?

McCain and Palin have a conception of who the middle class, “average” Americans are. Their statements struck me because their conception does not at all correspond to the reality of Americans’ lives.

The Tax Foundation has an excellent paper on income distribution in the United States that sheds light on the “middle class” definition problem, and the income statistics might shock you. First, the paper very rightly points to the fact that “middle class” is an imprecise, political term, meant to appeal to those people who “feel” they are middle class, average Americans, not the statistical average or median income earners. As such, middle class becomes a political term that serves as shorthand for not-millionaires and the not-poor; indeed, those individuals are invisible in American politics. It indicates policies that are supposed to be for “regular” Americans, regular being defined as not uber-rich and not for “welfare dependents.”

Almost 80% of people see themselves as middle class and only 2% of people see themselves as “upper class.” So clearly, many Americans don’t recognize their economic privilege in defining themselves as “average” when they are much better off than most. Yet these Americans feel the financial strain in our tough economic times. I’m not denying their plight, but if so many Americans see themselves as financially burdened, average Americans, when they are in fact not at all average, then an awful lot of people have a warped conception of what the plight of the actual middle class, working class and working poor!

To bring this point home, let’s look at who actually is middle class, or more accurately put, middle income. There are two different ways that economists describe middle income: either the middle 20% (the 3rd quintile), with 40% higher (4th and 5th quintiles) and 40% lower (1st and 2nd quintiles), or as the middle 60%, with 20% higher and 20% lower.

According to the 2006 U.S. Census, among all households (married, single, with and without children),

Median income among all U.S. households in 2006 was $48,201. The middle 20 percent ranged from about $38,000 to $60,000; and the middle 60 percent—the “Baucus middle class”—stretched from about $20,000 to $97,000 […] The range of the middle 20 percent [of married households] was approximately $57,000 to $83,000, and the range of the “Baucus middle class”—the middle 60 percent—was about $35,500 to $122,000. This $122,000 figure, then, represents the highest possible income that a married household could accurately call middle income, or “middle class.”

By contrast, for all single households, the middle 20 percent of incomes fell between $22,000 and $36,000 with a median of $29,000. That’s less than half of the median for married households. The middle 60 percent stretched from about $12,000 to $60,000. (emphasis added)

Did you catch that? Half of married households earn less than $69,716; half of single people earn less than $29,000. The most you can earn as a married household and call yourself middle class is $122,000; the most you can earn as a middle class single person is $60,000. If you make over those incomes, you are earning more than 80% of those in your household type. And we had a presidential candidate suggesting that married households earning over $250,000 weren’t rich? And that singles making over $125,000 weren’t either? Say what?! Saying those incomes are not rich, and Palin suggesting she is middle class, makes a mockery of the actual middle class, not to mention makes the working class and the poor completely invisible, as if they don’t exist.

Regarding Sarah Palin’s middle-class-ness, clearly her income puts her outside of what qualifies as middle income. But from a sociological perspective, class isn’t all about income; rather, it includes wealth (net worth), education, and prestige. And with her college education, job as governor with associated prestige and power, as well as her $1 million+ net worth, she is clearly and upper-middle class American.

Part 2 coming soon: Taxation, socialism, and the right’s rhetoric on those who pay no income tax.

 

(Cross-posted to The Reaction)

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Published in: on November 15, 2008 at 12:46 am  Leave a Comment  

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