A month or two ago I got a letter from the Social Security Administration telling me what I would get in retirement if I keep making what I make now till I retire -- which is one of those things I usually ignore since I tend to assume that I'll never get Social Security. However, the letter also shows your Social Security eligible earnings every year since you started paying into the system, and that really struck me. There it was, my financial history over the last 18 years or so since I got my first paycheck.
The interesting part was looking at the fourteen years since we got married. I was a Classics major in college, with no intention to go on in Academia and no real connections when it came to getting a job. The job I had when we got married I got through a temp agency: $14/hr on the basis of acing the temp agency test of Word and Excel skills, plus being able to type at 80 wpm. As a result, we lived pretty tight those first couple years out of college. Almost everyone I kept in touch with from college was making more than I was, but then almost all of them had had more practical majors. When we were expecting our first child, I desperately searched for another job so that MrsDarwin could stop working. She was part time at Barnes & Noble and part time stage managing, the former paid minimum wage and the latter paid less, but to pay the $1,000/mo rent on our Los Angeles apartment we needed that bit of extra income each month. I found a new job, quit my old one, and then got an offer to stay on at $40k a year, which seemed a pretty princely sum to me at the time, it was still a good deal less than a lot of my friends made. And that's kind of where we stuck for a while, as I tried to improve our lot by starting my own business, moving, temping for a year and a half, and finally getting a new salaried job that paid a little bit more.
The Social Security statement related all that in a neat string of numbers: increase, decrease, increase, flat. When I started this blog, ten years ago, we had two kids and made a little under the median income for households at the time. We had a newly bought house, a car payment, and two kids. My just about any definition we were right there in the middle of the middle class.
Then the numbers started to climb, with some downs in years when the big computer company I worked for didn't do well and so didn't give bonuses, and a couple of jumps when I switched jobs and then did so again. I passed the threshold which Jenny rightly identified as that after which people don't like to talk about how much they make. And now here were are, with six kids, and a house which is twice and big and twice as expensive (and six times as old) as the one we had when we started writing here.
The other day I read someone angrily disdainfully denouncing people who make about what I do as "the rich" -- his rational being that at that level one could pay $30k/yr for your kid's college bill and still have an income above the median left over. Looking back to when I was ten years younger, I remember talking about how when I made more money, I would keep living at the same level, so that I could save and put money away for emergencies.
It oddly sets one's back up to be dismissed as "the rich". I suppose some of this is the great American love affair with the "middle class". Only about 2% of Americans identify as "upper class", and only 10% as "lower class". All the rest of us describe ourselves as "middle" or "upper middle" or "working" class. And as a creature of the right, apparently I'm even more likely to see myself as middle class.
Some of this, I think, is that I identify at least as much with my past as with my present, and my family and my own early working years were right around the mean. Another we spend a lot of time with other people like us. The people I work with mostly make around the same that I do (which is to say: above the average) and the main affluence differences between us are that they mostly have spouses who work and make as much again, plus have half as many kids as I do. So I'm used to thinking of my circumstances as being comparatively modest, even compared to people a paygrade or two below me.
Still, it's interesting that in our cultural climate, being accused of wealth is somewhat insulting, and that even those far more well off than we are at great pains to insist upon their middle class status.
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11 hours ago
31 comments:
People tend to define "rich" as, "Someone making 10% more than I do." It's a sliding scale.
It's a problem that people get insulted by being lumped in with "the rich." It's basically an acknowledgement that envy has become a mainstream value in our society. Does someone else's wealth materially affect my life? My living circumstances? No. Therefore, I should not worry about how much other people have.
We live in the most materially wealthy society in the history of history. This is a blessing to be enjoyed.
What would you think about someone who would come right out and *say* "Our family is rich?"
Assume a matter-of-fact tone.
Now: is that polite? Is it bragging? Is it confessional in nature?
Do people not say it because there is a stigma against being the sort of person who would just come right out and say it?
(Incidentally, one can be classified based on one's income, one's net worth, or both. There are a fair number of people who have apparently high incomes but a small or negative net worth. So there's that.)
What would you think about someone who would come right out and *say* "Our family is rich?"
I think I'd just take it as factual.
Like anything else, I could imagine it being said in a jerky way. But I don't think that saying it itself is rude.
In America, we don't like to associate ourselves with the upper class. We imagine rich people to be non-working nobility or trust fund babies. I doubt someone like Bill Gates thinks of himself as rich in that way. He goes to work and works hard, I assume. I grew up pretty well off, and we lived comfortably. However, my parents both worked. We didn't have servants (beyond once a week cleaning lady). We didn't mix with the charity ball ladies who lunch crowd. My family never called itself rich. We were upper middle class. So I really think these distinctions are more cultural than a just a number on your bank statement.
Ok, then. I'll come out. We're rich.
It takes a certain amount of getting used to, for a lot of people, I imagine, because class (or income bracket) is so often treated as a part of one's identity. And so when you move from one to the other it can take a while for the identity to catch up.
OTOH some come from a well-to-do background where wealth and status are flaunted and used to push lesser people around, and are ashamed of being rich for that reason. It can take time to understand that there are other ways to be.
Do they still send out those Social Security letters? I was just talking about them the other day and it seems it has been several years since I had received one.
"Some of this, I think, is that I identify at least as much with my past as with my present, and my family and my own early working years were right around the mean."
I think it is a cultural distinction. People who have worked hard for their money and have come from lesser means generally do not want to be associated with the leisure class which how "the rich" are perceived. My own parents, whose combined income is easily four times mine, still cling to the notion that they are middle class. They scoff at the notion of being considered rich. They will maybe concede being upper middle class, but rich? No way. Their childhoods were in solid working class families so that is where they have rooted their identities no matter how much income and how many assets they own now.
I guess, in part, I'd have to come to some sort of understanding of what I mean by "rich".
Our family is in the top 20% of incomes, so it would be pretty off not to admit to being at least upper middle class.
I suppose at some class level I vaguely associate "rich" with owning expensive cars and vacation homes and fully packaged vacations. The sort of lifestyle one sees in the style pages of the Wall Street Journal. At a guess, I think in this part of the country you'd need a household income of $250k+ for that. However, that's putting you in the top 1-2% in terms of household income. Are there really only 1-2% in the US who are rich?
I guess I'd tend to think of us as "well off" rather than rich, but that's probably heavily influenced both by what I'm comparing us to in our immediate surroundings and the current prejudices of the culture.
It is an interesting question of how exactly you define rich. Is it a question of income, assets or lifestyle? The definition of rich I have always heard is that you are not dependent on your income for survival. Rich means you could live off your assets if necessary. Of course I don't know how high your standard of living is supposed to be while living off your assets. By that standard, my parents are rich, but they are also very close to retirement which muddies the picture. By that definition, almost all retirees are rich which is a dubious argument.
Anyway...
One of the stranger developments of my life is that my parents are quite well off now or rich depending on how you define it, but this certainly was not the case when I was their dependent. It is a weird place to be.
I had the bizarre experience of growing up in two homes, thanks to a divorce, in which one parent owned flashy cars and went on expensive vacations and took us out to nice restaurants pretty much every week, and the other parent worried aloud about making ends meet, fretted about how long it would be before retirement was possible, and never took a single vacation that I remember.
As I search for a definition of "rich," I find myself wondering what the correlation between income percentile and net worth percentile is.
This says they're not really correlated at all. About 0.5
http://www.sagepub.com/upm-data/5008_Gartner_Chapter_5.pdf
That they are not correlated doesn't really surprise me. It is hard to save money even when it seems like you have plenty to save. It reminds me of that article a few years ago (whose details are just fuzzy enough in my mind to make a Google search futile) where it was explained that this family with a spectacular income wasn't rich because they didn't have any left after they spent it all.
In my own budget, there are a couple thousand dollars a year that I should theoretically be able to save, but I don't know where it goes. It always seems to vanish.
I've read something about being "merely rich" and being wealthy which might be the distinction most people fail to make. You can be rich without being wealthy.
And here is a nifty net worth calculator which might be a better indicator of whether a person feels rich or not:
http://money.cnn.com/tools/networth_ageincome/
Even though our income has been relatively low over the years--middle class low, not poor low--I think our net worth stacks up quite nicely especially given our age.
Am "upper middle" by these Wikipedia definitions, though
sorry, link
here
0.5 is a strong correlation. The author does explicitly describe it as a "relatively low" correlation, which is odd. Even the adjusted 0.3 correlation isn't low.
I've always assumed that the reason well-off people prefer to identify themselves as "middle class" is because of a perceived loss of credibility when speaking to a broad audience. Would you be shy about discussing your net worth when addressing only those who you *know* to have a similar net worth? I'd wager you are more reticent with a mixed audience or an audience of unknowns--as you have via the blog, for example.
I don't think it's a culture of envy as much as it is a matter of in-group/out-group dynamics. To admit to living at a standard well above the median is to admit to not being part of the 'in-group' of the majority. Which is an odd sort of in-group, I suppose.
For the more politically minded, identifying as "middle-class" may also be an expression of a desire to duck and cover when class rhetoric starts getting slung around against the very rich and the very poor. Easier not to be a "maker" or a "taker" in that atmosphere.
@Kate
I agree with your analysis in the case of audiences of non-intimates. I think relatively high-income people tend to avoid discussing money matters even within their in-group, though. Overtly signalling high status relative to your associates can't be good policy.
Coming from an engineering background rather than the social sciences, I'm trained to think "correlation of 0.5" is not high at all. My apologies...
I am astounded by the income chart on the wiki page. On what planet can you be considered lower middle class with an income of 100K? That's crazy. And I'll admit that seeing my income deemed lower class makes me a little sad. Upper lower class, but lower class just the same.
Am "upper middle" by these Wikipedia definitions, though
I was nodding in agreement to the Wikipedia income tables, until I realized that I was looking at the 1984 ones. The 2014 ones look pretty crazy to me. Yowza.
Kate,
I've always assumed that the reason well-off people prefer to identify themselves as "middle class" is because of a perceived loss of credibility when speaking to a broad audience.
Something of that, certainly.
Would you be shy about discussing your net worth when addressing only those who you *know* to have a similar net worth?
Yes, actually. I tend to be extremely reticent about that, and my experience is that others, even with very similar incomes, mostly are too. (Which also makes it a bit hard to tell exactly how similar other people's incomes are.) The one example is if you're actively discussing career advice such as whether to accept a job offer. But it's definitely not general conversation.
@bearing
Interesting. I come from a social science background myself. What's considered a strong correlation in engineering?
I was thinking of the word in a totally different context, R^2 in curve-fitting -- and physical processes usually being more predictable than human behavior, 0.9+ would be expected. But (not knowing any better) I took the author's word for it when they said 0.5 meant not much correlation.
Re lifestyle, so much varies culturally... Darwin mentions "vacation homes" as a marker for being rich. Up here in MN, though, it's totally a middle-class thing to have a (modest) vacation home up on a lake somewhere. Maybe that is an expectatipn that a previous generation had, but "the cabin on the lake" most definitely does not mark you as particularly wealthy.
And I don't know anybody with a vacation home. Maybe that's an upper mid-west thing?
Because I have read a bit about the decline of the unions and how it was totally normal for people to have second homes and now it is becoming harder to do as the manufacturing moves to the non-union South. I, being from the South, have always been incredulous that owning a second house was a normal, middle-class thing to do. The math on this endeavor is still fuzzy to me, but these articles made it seem expected.
Also I think the 1984 table on the wikipedia page is a much more reasonable breakout. On the 2014 table, the argument is that more than half the country is poor and have not attained middle class status. That's an absurd argument. That table looks like the class/income levels for NYC, not America as a whole.
"Have you ever wondered what it's like to have fewer gall bladders than stomachs?"
The basis of a consumer society is that you never have enough, therefore you are never rich. There is always more to get. No matter how good we have it, someone wants to convince us that our current state is lacking. Telling people that what they have already is great will not boost next quarter's earnings. I live better than ancient royalty in objective terms, but I still have envy when I think about the wealth of the senior VP's.
I am, of course, completely complicit in this. I invent the new and better things that make people unhappy with the old ones.
BearingHusband,
It's an interesting point. Being a fan of Victorian novels, I have a certain admiration for the goal of doing well and out of that building up to a point of having a family house that is owned outright and a set of family investments which can support future generations at a modest level.
However, in our current culture, the idea of building up wealth in order to pass on a modest stability is seen as almost immoral, with some people advocating that it be nearly impossible to pass on money via inheritance.
I wonder if a lot of that is the result of the needs of a consumer society. Must keep the wheels rolling.
There may be another reason readers of a Catholic blog might not want to self-identify as rich: regularly saying "...he has filled the hungry with good things, and the rich he has sent empty away."
And even though you know what you mean, there is always that niggle in the back of your head...
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