If We're All Middle-Class, Who Do We Help?
REBECCA ROBERTS, host:
In this final month leading up to the November election, candidates around the country are talking a lot about helping the middle class. They want middle class tax breaks and middle class jobs. But who exactly are they talking about?
Here to tell us about the latest data defining the much-discussed middle class, is NPR senior business editor Marilyn Geewax. Welcome.
MARILYN GEEWAX: Hi.
ROBERTS: So, how do we define middle class?
GEEWAX: In this country, most people really do view themselves as being neither rich nor truly poor. They see themselves as being somewhere in the middle, and technically, thats probably right. Four out of five people are either above that Federal poverty line or below that much-debated top level for taxable income.
This year, the Federal poverty line is set at about 11,000 annual income for one person, or 22,000 for a family of four. Now, how many people fit that? Well, about 14 percent of the U.S. population would be considered poverty-stricken by that standard. And about two or three percent of people are considered really well-off; those are those households that make $250,000 a year. Those people would see higher taxes if President Obama were to win the debate on fiscal policy.
So everybody that's between those two extremes of rich and poor, they could make a claim to be in the middle class.
ROBERTS: So if we're talking about 14 percent considered poor, two or three considered rich, that still leaves over 80 percent of the country.
ROBERTS: I mean, do economists have a narrower definition?
GEEWAX: Well, to make it a more useful definition of whats middle class, you could whittle it down. The Census Bureau says that the median household income is just about exactly $50,000 a year. And median means that we've got a total of 117 million households, about half of them make more than 50,000 and half make less.
But of all those households, you know about one-fourth of them have just a single person working in the house.
ROBERTS: So whats the median if two people are working?
GEEWAX: Well, let's say you had a husband and wife and each one is working full-time, and they're earning the median income for their respective gender, that household would make about 82,000 a year.
So when you take into account everybody - the single people, the married couples - and you line up all incomes, about half of all the people in this country would fit between two brackets: About 25,000 and 80,000 a year.
ROBERTS: So this is a lot of numbers. What do the statistics actually tell us about people? How are they doing?
GEEWAX: Well, the thing thats really become clear from all the data is that this recession has really bullied people in the middle class. Theyve seen their pay cut, the home values have been cut, theyve had reduced retirement earnings. In a lot of cases, people have permanently lost their jobs.
The latest census data shows that about, between 2008 and 2009, four million people fell out of the middle class all together and now they're living below that poverty line. In just the past year, the number of households collecting food stamps has jumped up about 18 percent. So that means millions of people who used to be self-reliant are now being - depending on the government to get their food on the table.
ROBERTS: So is there anywhere in the country where the middle class is holding up well?
GEEWAX: No. The new census data shows that no matter where you live, you probably felt squeezed. Because of layoffs and reduced work hours, income fell in 34 out of 50 states. North Dakota was really the only state where people saw any uptick in their earnings.
ROBERTS: So what are people doing? How is the middle-class coping?
GEEWAX: NPR is going to take a look at that question later this week. Starting Wednesday, we're going to have a series of reports from all over the country about how middle class people are dealing with all these financial strains.
The series is called Living in the Middle. And we're going to have a lot of interesting information at Npr.org, too.
ROBERTS: NPR senior business editor Marilyn Geewax. Thanks, Marilyn.
GEEWAX: You're welcome.
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