Who is the Middle Class?

As most of us know, the definition of middle class is far from simple. There is no official government definition but rather a broad analysis of income based on the census data.

“Based on 2005 Census Bureau reports, some 40 percent of the nearly 115 million households in the U.S. earned less than $36,000 a year. That represented just 12 percent of all income. The 40 percent on the next rung up the economic ladder took in between $36,000 and $91,705 — or about 37.6 percent of all income. The top 20 percent, who made $91,705 or more, collected half of all income” (MSNBC 10/17/07)

One could conclude that the middle class is the 40% of people making between $36k and $92k. Considering that the 2007 federal guidelines state that the poverty threshold for a family of four is $20,650, this definition makes sense. However, this data would make it seem that many of us on Long Island are well-off. Enter The Fiscal Policy Institute (FPI), a nonpartisan research and education organization that focuses on the tax, budget, economic and related public policy issues that affect the quality of life and the economic well-being of New York State residents. According to their press release dated June 12, 2008 the federal poverty level is a poor indicator by which to base affordability standards.

“The federal poverty level is the same whether the family lives in Manhattan or rural Mississippi. That makes it an especially inappropriate measure for New York, where the cost of living is high…In New York, the basic budgets are higher than in most other states, and range from just over $41,000 for a four-person family in rural areas to over $60,000 in Nassau and Suffolk counties.”

This data probably confirms what most people living on Long Island already know. If you live on Long Island, earnings of 90-100k plant you firmly in the middle class even if census data puts you in the top 20% of earners for the United States. The teachers, policemen, county officials and other public service personnel tell us this repeatedly when defending their 90-100k salaries - without these salaries they cannot afford to live on Long Island. I certainly agree with this assessment if you read their defense to mean that they cannot afford the middle class lifestyle on Long Island. (note: My problem with their earnings is that they get these salaries along with lucrative benefits and pensions all at the taxpayer’s expense.)

Make no mistake about it, if $60k is needed to cover basic needs then many middle class Long Islanders are struggling (as we know they are). However, federal poverty level guidelines disqualifies them for any public assistance. When calculating these guidelines, the government does make regional adjustments for Alaska and Hawaii. Based on the FPI data, the government definitely needs to reconsider its classifications and extend those regional adjustments to include other high cost of living states like NY and California.