Monday, January 09, 2006

Question Hour: Upper Middle Class Incomes

by Tom Bozzo

Friday's request for information on sociological conceptions of the upper middle class succeeded beyond my expectations, as I was quickly directed to some relevant scholarship — with special thanks due to Kim Weeden of Cornell for providing a couple of papers and a comprehensible summary discussion via e-mail, which I will try to carve out some time to read and digest.

While I did consider rescinding the words "sociological consensus" just after I typed them, there is a consensus of sorts among the responders to the post and me that defining the upper middle class via income and/or wealth ranges is not really appropriate, or at least a gross reduction of a host of other quantitative and nonquantitative factors.

You can say that an income range from X to Y — given some circumstances, with X comfortable enough and Y not too comfortable — is upper-middle-class-ish, but you'd better also be prepared to start making a long list of qualifications. (My qualitative definition of an upper-middle-class income, BTW, is an income sufficient to eliminate most day-to-day worries over money, and which would no longer be an upper-middle-class income if the labor income were taken away.)

To respond to a couple specific comments, Jeremy suggests that "above a cutpoint" criteria aren't useful in characterizing the "middle," even if the particular "middle" is off-center. I agree. In particular, the Wikipedia entry for "Upper middle class in the U.S." suffers from this problem, providing basically incoherent "income and wealth above $X and $Y" and "income and wealth in the top quartile" definitions. (*) This goes to show that as incredibly useful as Wikipedia can be, information from it must be employed with care. In the absence of a substantive improvement to submit, I was somewhat inclined to delete the existing entry as not being better than nothing.

Sep offers the opinion that no wealth index will get at the social meaning of class, noting that it's a "mighty strong" statement. The core point about the insufficiency of wealth (and/or income) measures is well taken, as it effectively responds to what would have been my main objection, which is that to the extent "it's not how much money you make [or have] but how you spend it," there are likely to be strong correlations between the former and the latter. Sep usefully notes that there is much research on the importance of social ties in determining upper-class membership. I can imagine measurement difficulties scaring economists away from social capital measurement (given, for instance, that physical capital goods already pose a host of measurement problems), but the "value" of social networks is certainly among the aspects of class that is measured by standard wealth and inequality statistics coincidentally at best.

*) An alternative type of income-based definition is to define middle class incomes as a range of multiples of the official policy level and the upper middle class as the top end of that range. In one such case I found, the authors were even careful enough to describe incomes above the upper middle class range as "high incomes" rather than "upper class," though the "high income" floor was what I'd have considered solidly upper middle class in typical cases.
The traditional measure of eligibility for government aid is xxx% of the [indicator] (e.g., LEQ 150% of the poverty level for CHIPS in Texas; 200% elsewhere).

The sociological equivalent should be something like "125-250% of the median income for the region"--with the implicit presumption that anything over the top number would enable one to (effectively) buy your way into the Upper Social Class, at least for your children. (This generation's nouveau riche becoming NextGen's "landed gentry," as it were.)
I like the 'ability to buy into the upper class' angle, though I don't know that 250% would quite do it. Luxury house prices, country club memberships, Ivy League tuition, etc., being what they are (at least for now for the first).
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