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How Many Slots Are Open In The Upper Middle Class? Not As Many As You Might Think
Submitted by Charles Hugh-Smith via OfTwoMinds blog,
Not only are there not that many slots in the upper middle class, the number of open slots is considerably lower.
If America is the Land of Opportunity, why are so many parents worried that their princeling/princess might not get into the "right" pre-school, i.e. the first rung on the ladder to the Ivy League-issued "ticket to the upper middle class"? The obsessive focus on getting your kids into the "right" pre-school, kindergarten and prep school to grease the path to the Ivy League suggests there aren't as many slots open as we're led to believe.
Let's set aside the endless debate over what qualifies a household to be "middle class." Most people define themselves as middle class, with little regard for their income. Let's cut to the chase and ask: how many young people aspire to joining this ill-defined middle class? Does this mean a rising standard of living and security? Not any more.
If you want those things, you must aspire to join the upper middle class.
So the more fruitful question is: what qualifies as upper-middle class? Here's a handy line in the sand: Stanford University covers the tuition for all incoming undergraduates whose household income is less than $125,000.
According to the U.S. Census Bureau data (here displayed on Wikipedia), $125,000 is right about the 85% line--only the top 15% households make $125,000 and up annually:Household income in the United States.
For context, median household income in the U.S. is around $52,000 annually.
A few years ago, I calculated What Does It Take To Be Middle Class? (December 5, 2013) and came up with an absolute minimum of $111,000 for two self-employed wage earners, as this includes the cost of healthcare insurance and the employer's share of Social Security and Medicare taxes. This was bare-bones.
Since employees of the government or Corporate America receive healthcare and retirement benefits (matching contributions to employee 401K plans, etc.), these can be subtracted from the $111,000. But this didn't allow for vacations or any of the finer things in life, so if we are talking about a truly comfortable household income, around $105,000 for state/corporate employed people sounds right and $125,000 for self-employed people is more or less the minimum required.
(Obviously, money goes further in the Midwest and not very far on the Left and Right coasts.)
Stanford's cutoff of $125,000 isn't as outlandish as it might seem at first glance.See where your household income fits in the spectrum with this online tool: What Is Your U.S. Income Percentile Ranking? (This confirms that an income of $125,000 puts the household in the top 15%.)
Meanwhile, wages for every category of worker, from the highly educated to the high school graduate, have been declining:
How many slots are there in this upper middle class? A household income of $190,000 is in the top 5% nationally. According to the Social Security Administration data for 2013 (the latest data available), Wage Statistics for 2013, individuals who earn $125,000 or more are in the top 5% of all earners. Two such workers would earn $250,00 together. The 2.8 million households with incomes of $250,000 or more are in the top 2.5%. If we define the top few percent as upper middle class, then who qualifies as wealthy? Only the top 1%?
I think it is reasonable to define the 10% of households earning between $125,000 (top 15%) and $190,000 (top 5%) as upper middle class. This is around 12 million households, out of a total of 121 million households.
Most of those jobs are already held by people with years of experience and abundant social and human capital. Yes, there are plenty of wastrels living off trust funds and free-riders doing as little as possible in their guaranteed government jobs, but by and large the people earning these incomes are working hard and will do whatever it takes to maintain their current incomes for the sake of their kids and their own security.
This explains the frantic drive to be one of the 2,100 students accepted by Stanford out of 42,000 applicants. These low admission numbers reflect the admission realities in the upper crust of Ivy league universities, both public and private.
The assumption is the few open slots in the upper middle class (or dare we hope, the 1%) will disproportionately go to those who have the credentials that signal they have the social breeding and brains to fit the corporate culture and they're willing to work hard and make their bosses lots of money.
Meanwhile, the top 5% of households in San Francisco earn a whopping $423,000 annually. (brookings.edu)
This is enough to put those households in the top 1% of California residents, roughly $433,000 annually: 10 States Where You Need The Most Money to Be In the 1 Percent
If you're curious what jobs those living in top 1% households have, check out this chart: Explore the occupations and industries of the nation's wealthiest households (NY Times).
4,575 writers (out of 92,000 nationally) are in top 1% households. Where do I sign up? Another 10,134 writers in "other industries" (out of 465,000 people claiming this employment category) are also in top 1% households. 15,000 retail clerks also live in top 1% households.
Perhaps the trick is not to make a lot of money writing or selling accessories, but to marry a top-level attorney, doctor, business owner, dot-com millionaire, lobbyist or trust funder?
(You can look up what qualifies as a 1% household income in this link, which has a chart of all 50 states and Washington D.C.)
Not only are there not that many slots in the upper middle class, the number of open slots is considerably lower. No wonder so many parents are desperate for an insider's pathway for their offspring.
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Yep, but a lot of middle and lower middle-class anal slots are being opened up.
Always opportunities at Bendover University.
Charles, your definition of middle class is really a cushy upper-middle class professional lifestyle. Being a professor isolates you from real people. Time to wake up!
Disagree. Try getting by on 125k in Manhattan. Hardly upper middle class. These stats would look much different when broken down by zipcode.
It's hard to have a good old fashioned lower class when people can escape it. One of the most important things any socialist system has to do is make the population into fixed classes where you never are allowed to rise above the station in life you were born into, except maybe if your a special pet or a trained seal like our 'dear leader'.
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
When I die you can have my slot.
Simply obtain the same education that I have and do the same work. Simple. You can even have my slot while I'm alive if you do that.
Speaking of dying...
There is a somewhat monotonous expression in Japanese that goes:
Get into a good kindergarten, to get into a good elementary school, to get into a good high school, to get into a good university, to get into a good company, to get into a good grave.
Given the limited amount of space in Japan, finding a beautiful, convenient place for a memorial stone which needs to be cared for at least once/year at Obon, is tough.
earn enough to cover your shelter,food,health needs, after that it is just greed or fear of poverty. live not to earn but to live - take your interests to new levels..just money goals and you are not better then a Fed Chairman or a corrupt pol or those billionairs who pollute the planet.
Anything more than shelter, food, health needs is just greed and fear of poverty? You couldn't be more wrong.
For some reason, you have it in your head that people working hard for more than the bare minimum is bad. In fact, the reason you have a nice warm house, abundant food, and health services is because people wanted more than the bare minimum.
I'll dumb it down for you:
A baker decides not just to bake bread for himself, but bakes enough for an entire village. The villagers can buy or exchange their labor for the bread. The baker can than buy whatever he wants with the excesses of his labor and the village is full on bread. You're calling this greed? I call it free trade.
If only life was that simple. Money should be pursued after to afford more opportunities and independence. Independence should be viewed as FREEDOM.
At what point did the baker have to raise his prices?
When Obamacare got mandated
lordy what a name btw...the baker makes his living, he must work more to produce more, keeping another baker poorer, so he gains wealth and looses time for other joys of life, while keeping others from making a living competing with mr big baker. you would make a fine international corp head, screw the workers in USA and move off shore to pay them slave wages, is that you?
No, you are the one sending jobs overseas. You do not buy products ONLY made in the U.S.A. with raw materials mined, grown, or produced in the U.S.A.
Ignorant, judgmental, hypocrite.
BTW - You are laughably ignorant in the field of economics.
Which is why there is a forest somewhere in Japan where the teminal/old can go to just die, there skeletons litter the place.
Old school elderly. not wanting to be a burden to their children.
The old school Samurai must be spinning..
How about the screwed class? If getting sick makes you bankrupt, you are in. If SS will not be available when you retire, you are in. If you cannont invest long term because the markets are broken and unregulated, you are in. If your money grows worthless and taxes grows, well just grows, you are in. If a jet cannot link you to a NZ refuge, you are in.
Because affirmative action and jews take up more than their fair share of slots?
The numbers are about right but this "slots" talk is obscene. You really want more slots open in the top 10%? How do you put more slots into a single percent? WTF
The Stanford number is socially amazing, but Stanford is also chock full of endowment money from their billionaire alumni at Google, Yahoo, and such. They've always been generous, it's just that the numbers have gotten so huge.
Doesnt make a diff how good a head start kids get today...fluoride will turn 50% of them autistic...
All you have to do to become middle class is by the S&P500. Get with the modern times, ZH
College or not - the best education that parents can give to their children is to teach them to work hard, be truthful, be respectful, be open to new opportunites, and to not be afraid to fail.
A number of surveys of top ten best jobs or fastest growing jobs indicate that many of those jobs did not exist 10 years ago. The ticket to (most of) the 1% may require a fancy education from a prestigious school - but the upper middle class and middle class is still obtainable by using the best education I describe above.
While I would love to agree with you, I would tell my children that the uber class for the most part are liars and psychopaths. I would tell them that TPTB are not to be trusted. That governments lie. That the uber class is above the law, and if ever confronted by police to lawyer up as fast as possible. Deny, deny, deny and if caught to blame it on someone else. In a perfect world hard work and honesty would mean something. Much of my success was due to a good work ethic, integrity, and the ability to sympathize, empathize with the people I worked with and for. Unfortunately that seems like a lifetime ago. If you look at the people at the top its always about blaming someone else, making excuses, or lying. Do as they say not as they do. Our government, our banking system, our legal system all set up for the enrichment of the few. This work ethic might work on a small scale but if you want to make it big, I mean really big, you're going to have to screw a lot of people over.
If not have a good life, enjoy what you have, know that you're a better person, not in a cocky way, but In a humble satisfied way. Be kind and generous, be genuine, but don't be a fool like me and believe in justice or fair play, it will just make you angry and cynical.
This is what I would tell my children today.
This is why "working hard" doesn't and can't guarantee success.
Economics is a zero-sum game because it functions on limited resources.
If one person has a thing there is less for everybody else.
Be sure to put "/sarc" in your post in the future.
No sarcasm necessary.
Physics disagrees with your ideals. Physics will win.
You argument is nonsense. When two people voluntarily trade, both parties benefit. I trade you shoes for bread. We both benefit. So much for your zero sum.
Sluts !? oh slots.... never mind. BTW .... Can you add the stopped working by choice or evaporation to that? No that would be -100%....never mind that also.
Fingers are up. Boogers are down.
Some British politician was on Bloomberg today saying how they want a more educated workforce to get the high skilled high paying jobs.
Then it hit me. The companies hiring people for high skilled high paying jobs are working their asses off to eliminate and/or reduce the number of high skilled high paying jobs required by their business.
And then it hit me again. If the above statement wasn't true and there will always be demand for high skilled workers, if all of the governments succeed in educating their unemployed citizens for high skilled tasks, then there will be excess supply of high skilled labor which will mean that the jobs are no longer high paying.
Did he say anything about higher educated politcians?
I'm going to dispute CHS's numbers on the basis that the value of FRN's is skewed to a Nth degree; therefore we have no idea what it buys and what it is worth.
(Just bringing up the fact that nothing measured in FRN value is what it appears to be, by the numbers, anyway.)
What's that ... "middle class" ... ???
The only way that there could be fewer "slots" within any given percentile of income earners would be if there were fewer total workers, which is not true. The only thing this article proves is that Charles Hugh-Smith is mathematically illiterate.
Not only that, he writes about upper middle class income, "Most of those jobs are already held by people with years of experience and abundant social and human capital." Right Charles, unlike the good old days when your average bum on the street could make big money as soon as he hit fifteen.
The horror.
Well Chelsea Clinton went to Stanford and now is changing the world, especially Haiti, with her job at the Clinton Foundation. Before that her "starter" job was a $600,000 a year part-time reporter for NBC News. She picked up some good learning at Stanford that's for sure! Whooooeeee!
Duh