What do you consider the working class?

RX Reven' said:

mazdeuce - Seth said:

In reply to RX Reven' :

On that same page, it's a little demoralizing to work for almost half a year and have that money not matter because daily swings are bigger than your total take home during that time. 

The hard part for people is going from accumulating to spending. 

I totally understand that, a standard 10% market correction would cost me 15 months in in gross salary at this point.

You just have to trust that the universe tends to favor responsible aggression and...

I've seen that idea constantly, but the "loss" of money is only true if you sell.  People complain that the house they own isn't getting an assesment that they like- again, that only matters if you are going to sell  it, if not, the house value is largely irrelevant (other than for tax purposes).

I'd just spend a little less while the market is down to minimize what is "down".  

I want my house to assess for very little. Right up until I sell it or refinance it. Because I'm paying taxes on the assessed amount. 

In reply to Adrian_Thompson (Forum Supporter) :

My brother is a Doctor who earns well above your Wealthy class.  However Doctors carry very expensive liability insurance.   For a variety of reasons he lives in Texas,  but commutes to Northern Minnesota to practice.  
    Those costs plus other things put him well beneath me net worth wise.    
   I've other relatives who earn double my income yet they too fall behind me. 
     So the catagories you've set up really have little relationship to wealth. 

We're car people so it plays out every day at gas stations.  Lower income/class people operate on a cash system, they come in and buy 20-40 dollars worth of scratch off lotto tickets and 10 bucks worth of gas.

I'm pretty solidly middle income/class and use my card to pay at the pump, filling the tank.  I do play the lotto but just the big ones (powerball and megamillions) so I pay for a multi draw ticket that for three weeks costs me $24.  It gives me a glimmer of hope which I probably wouldn't need or want if I were part of the upper class/income.

A few years ago I went in and was feeling a bit grousy about something that was acting up on my car (one of my several cars) and the cashier at the gas station said something along the lines of: he really liked my car and that he was saving money at that job (his second) in order to afford a car of his own soon because taking the bus ate up a lot of time.   So part of the answer is time.  Being poor takes a lot of time, being middle class takes less.  Being wealthy makes things much more effortless.  

mtn said:

I want my house to assess for very little. Right up until I sell it or refinance it. Because I'm paying taxes on the assessed amount. 

Assess /= appraise. 

You ALWAYS want your house to assess for very little. Low taxes is a benefit to the next buyer as well, especially with housing where most buyers first figure out a monthly payment they can handle and then back into the top price they can pay for a house including mortgage/taxes/insurance. Less tax means more of the monthly goes to mortgage meaning for two equal houses the one with lower taxes is worth more. 

/nikpik

You're right. My bad. 

mtn said:

I want my house to assess for very little. Right up until I sell it or refinance it. Because I'm paying taxes on the assessed amount. 

 You are looking at cost of realestate rather than return.  It's a fact that extremely wealthy neighborhoods pay a small fraction of what poor neighborhoods relative to their appreciation.  There have been months where the appreciation on my house has gone up more than a  whole years property taxes.  
     Put it another wayI bought my first house in 1975 for $28,700.   I've been on that elevator ever since.  Some is inflation. Some is appreciation. 

ProDarwin said:

STM317 said:

 a big chunk of the US doesn't have the option of changing their hours.  I could live quite comfortably on less pay & less hours, but that isn't an option.

Pretty much any retail place will employ a person part time. Especially in the current environment where they're desperate for bodies. You could negotiate a flexible schedule and (relatively) decent wage pretty easily. The FedEx hub near me was starting people over $20hr 10 years ago when I worked there. You worked about 20-25hrs per week with solid benefits. I'd imagine the $$$ rate has gone up since then. If you want to work fewer hours, and you're comfortable making less money I'd say there are plenty of options.

 

In certain brackets yes.  What I meant by a 'big chunk' that is many people have white collar jobs where reduced hours are not an option.  For example, for those making $100K, working 4 days a week for $80K isn't going to happen.

Well yeah, you're not going to get the same hourly pay rate in most cases. It's hard for a part time job to match the $50/hr + benefits of a $100k + benefits white collar job unless you're a self employed consultant or some sort of contractor. And those scenarios have obvious drawbacks too. Everything is a trade off of some sort.

STM317 said:

 a big chunk of the US doesn't have the option of changing their hours.  I could live quite comfortably on less pay & less hours, but that isn't an option.

Pretty much any retail place will employ a person part time. Especially in the current environment where they're desperate for bodies. You could negotiate a flexible schedule and (relatively) decent wage pretty easily. The FedEx hub near me was starting people over $20hr 10 years ago when I worked there. You worked about 20-25hrs per week with solid benefits. I'd imagine the $$$ rate has gone up since then. If you want to work fewer hours, and you're comfortable making less money I'd say there are plenty of options.

 

That gets much more complicated with medical benefits thrown in. Lots of part-time jobs do not offer insurance or benefits of any sort. 

The vast majority of Americans, whether rich or poor, are locked into roughly 40-48 working weeks a year, 2,087 working hours a year.

That to me, indicates a flattening of the lifestyle of the middle class. Both parents working. Working the same amount that their parents did, but paying more for housing, medical care, education, childcare, etc. 

Sometimes, being forced to do something can illustrate the benefits to things we see as "impossible" to do in the USA as compared to European nations. COVID has shown that not only can lots of business be profitable while most of the workforce is remote, but without the need for office or commercial space, we can maximize earnings and efficiency, while actually providing a better work/life arrangement to employees. 

Imagine if US employers were required to give full-time employees 10 holidays (unpaid), plus 10 vacation days (unpaid)(half for part-time employees), plus sick time and universal healthcare. Free childcare would be cool too. Maybe more perks for stay-at-home parents. That to me would be a major change in the middle class lifestyle. 

In reply to pheller :

The guys that work for me would be E36 M3ting mad if they were required to take 20 unpaid days a year. 

pheller said:

wae said:

I remember there was an episode of the Cosby Show where Dr. Huxtable told his kid that the definition of "rich" was when your money worked for you versus you working for your money. 

I agree with that 100%. When people ask me "why do you think we need to tax the rich" I make the distinction between working rich and non-working rich. Yes, I do think non-working rich should bare the largest burden of our taxes. 

Having some intimate knowledge of how the later considers their finances, they give a tremendous amount of money to charity to avoid additional taxation, but as a whole, a few percentage points of taxation doesn't threaten them. They have such tremendous wealth that even at absurd levels of taxation they'll still make money doing virtually nothing.  At those levels the theme of "money is no object" really rings true, especially when they themselves didn't necessarily make that wealth (generational/old money). 

For the rest of us mere mortals, I know some folks who make above $200k/year but they work damn hard for it. Granted, it's not physical labor, but its a lot of time in airplanes, flying around the world, doing highly technical or tedious work when they are in the office, and sitting in meetings all day everyday. I give a lot of credit to someone who despite making more in a single year than I'll make in five, still goes to the office everyday at 8AM. Should that person still pay taxes? Yes. 

I also know some business owners. This is where my views on taxation get a little bit hard to quantify. I give lots of credit to job creators, but I don't think every person who invests in a company is a job creator, and therefore, I have some concerns about saying that because someone is rich and doesn't do work, that they should get a tax break because their investments create jobs. Not necessarily. Real estate is a great place to make money out of proverbial thin air. There are plenty of other examples. Where I want incentives is for businesses and business owners to create good paying sustainable jobs. No, not just $15/hr minimum wage, but the local AMI rate. And it'd be rad if somehow we could tie the taxes of the ownership to the difference in incomes across the company and investors. If a business owners makes $100k but his employees make $80k, then I'd be inclined to give that business owner some serious tax breaks. 

 The thing that worries me the most is how the lower and middle classes just haven't seen big changes in their lifestyles in the last 30 years. Granted we all carry around mini-super computers that can get the world's information nearly anywhere, and we drive far nicer vehicles that 30 years ago, but our lifestyle hasn't change - ie, we still work 8AM-5PM, M-F, because we desperately need to maintain healthcare coverage, and we get roughly the same amount of vacation time we did 30 years ago, same amount of Holidays, and now, we pay significantly more of our household income towards housing. 

And we're all mostly locked into that. Sure, some people could live off grid and only "work" a few hours a week to pay their bills, but for most people, even in places with very low cost of living, you still need some sort of steady income and more importantly, still need healthcare. 

The "Middle Class" shouldn't just be about "stuff" it should be about lifestyle. If our lifestyles have drastically changed in 50 years since the middle class was coined, we need to revaluate that definition. If now it require two incomes to afford a house, and then we pay for childcare, and we pay higher amount for healthcare, then its hard to say that lifestyle matches that of the 1960s. 

I'd like to see changes in country that allowed the middle class to live easier lives, with less stuff, and more time. 

You have some very valid points.  But one assumption not mentioned directly but should.   
 Taxes. Should we collect taxes on income?   Or on spending?  
      My argument is that there should never be income on earnings. Thus rewarding work.  But always income on spending. 

  Imagine  how easy and fair a spending tax would be.  When you want something you pay a price plus a tax.  Don't want to pay taxes? Don't buy things.  
    Everything should be taxed.  Stocks , taxes, Hot Dogs, Taxes, buy  a company Taxes, buy a bubble gum pay taxes.  No exceptions.  That would keep the percentage down.  Those that have the most, would have paid the most. 
   Win or lose on your investment?  Doesn't matter tax wise.  No income tax.  
   Buy a used lawn mower  from your neighbor pay taxes.  If every purchase  is taxed, the percentage would be extremely low.  

KyAllroad said:

We're car people so it plays out every day at gas stations.  Lower income/class people operate on a cash system, they come in and buy 20-40 dollars worth of scratch off lotto tickets and 10 bucks worth of gas.

I'm pretty solidly middle income/class and use my card to pay at the pump, filling the tank.  I do play the lotto but just the big ones (powerball and megamillions) so I pay for a multi draw ticket that for three weeks costs me $24.  It gives me a glimmer of hope which I probably wouldn't need or want if I were part of the upper class/income.

 

 

A few years ago I went in and was feeling a bit grousy about something that was acting up on my car (one of my several cars) and the cashier at the gas station said something along the lines of: he really liked my car and that he was saving money at that job (his second) in order to afford a car of his own soon because taking the bus ate up a lot of time.   So part of the answer is time.  Being poor takes a lot of time, being middle class takes less.  Being wealthy makes things much more effortless.  

I'll also add that being poor is very expensive to the last bit

In reply to frenchyd :

That's a MASSIVELY regressive plan. If you're poor, you have to spend all the money you make, so everything is taxed. If you're welthy, you can afford to save, so you pay much less (percentage wise) in tax. There's a reason we do things the way we do. 

Last year I traveled 16,000+ miles, worked 1240 hours of overtime, and I would consider my household ok for my area. My wife does her 40hrs a week.

I figure if you have a E36 M3ty house and a couple running vehicles plus a few projects, you are doing well. Key bit is in your area.

I would instantly become the cheapest bastard you ever saw.  In the US.  My Italian Villa would be spectacular!

My kids think we are poor, but I think we are middle class/lower middle class depending on people's opinion. We just live a very frugal lifestyle with no debt other then our house. I consider poor 25k or less in most areas . Around here as a single male 25k provides a decent living! 
 

Im firmly in the working class, better decisions as a young man would have moved me way up. I consider 30-60k middle class. 60k+ a year is upper class around here. With a lot of people in that bracket swimming in debt because they want to keep up with people making 200k+ a year for the same job in larger city's 

Toyman01 + Sized and said:

In reply to pheller :

The guys that work for me would be E36 M3ting mad if they were required to take 20 unpaid days a year. 

Why? Couldn't they work weekends?  

20 unpaid days off is not 20 Wednesdays. 

The problem with our current Federal Holiday system is that not everyone wants to take those days off. I propose that instead of Federal Holidays, that we just have 20 days off a year. Whenever. All together. A few each months. Whatever. 

If your guys really work 365 days a year, and they wanted to do that, they probably could. I don't think Germans or French or whatever that get mandated vacation time and lots of Holidays penalize people who work thru those holidays IF ITS VOLUNTARY. Plenty of people work temporary or part-time jobs do take advantage of the higher pay or more demand on those days. 

That lack of vacation and time off given to Americans is a result of a "well those guys don't use it, so we won't give it everyone." I could care less if Larry over there is in debt to his ears and needs to work 70 hours a week to afford his bills for the truck he shouldn't be driving, the sidebyside he shouldn't own, the private art degree he spend $100k on decades ago. That's not my business. His lack of interest in vacation shouldn't impact my ability to be granted it. 

mazdeuce - Seth said:

In reply to frenchyd :

That's a MASSIVELY regressive plan. If you're poor, you have to spend all the money you make, so everything is taxed. If you're welthy, you can afford to save, so you pay much less (percentage wise) in tax. There's a reason we do things the way we do. 

 

Every attempt to make a honestly progressive tax winds up doing just the opposite.  The richest 1% pay 40% of the taxes. But what that doesn't tell you is they have 90% of the wealth. Why don't they pay 90% of the taxes?  
77,000 pages of the tax code will show you. 

mtn said:

Robbie (Forum Supporter) said:

In reply to mtn :

Treating a property of a population like a bell curve and assuming that it follows bell curve statistics when it doesn't is a huge logical fallacy that many people fall into (and one of the main reasons that the traditional income classes are mostly useless). 

Yep. We're talking about this as if it is a bell curve. In reality, it looks like a very, very steep quarter-pipe.

Well, the bell curve is for things that have an upper limit. There is no upper limit to wealthy. So really it's jut the left half of the bell.

Also, if you graph wealth on X and population on Y, it probably is a bell, except the right side tail goes waaaay off to the right.

frenchyd said:

mazdeuce - Seth said:

In reply to frenchyd :

That's a MASSIVELY regressive plan. If you're poor, you have to spend all the money you make, so everything is taxed. If you're welthy, you can afford to save, so you pay much less (percentage wise) in tax. There's a reason we do things the way we do. 

 

Every attempt to make a honestly progressive tax winds up doing just the opposite.  The richest 1% pay 40% of the taxes. But what that doesn't tell you is they have 90% of the wealth. Why don't they pay 90% of the taxes?  
77,000 pages of the tax code will show you. 

The top 1% also spend the least amount of money relative to their income.  So why do the exact opposite, and tax every dollar that someone living paycheck to paycheck?  Doesn't make any sense.

I had to take a comparative government class in high school.  We compared the USA to the USSR.

I remember being quite surprised that the average person in the Soviet Union at that time (1970's) had less real income than what the USA considered "poverty" level.

USA poverty level is quite a nice income in a lot of the world.   Think about all the people risking their lives at the southern boarder in order to live on USA poverty level income.  

Then consider that people today spend thousands on cell phones, cable TV, all the special channels,  have a vehicle for mom and dad that with probably combined notes close to $1000/month.   And we don't have  just health insurance as our benefit, we want health maintenance, which costs a lot more.  

People want it all and right now so go into debt for life.  

alfadriver said:

Antihero (Forum Supporter) said:

Not too long ago, like....2 years or less, you could live on 25k in my area. Rent was cheap, $500-700 is a good range, utilities were cheap and cost of living was relatively cheap. You weren't wealthy but you could make your bills.

 

Now rents start at $1000 and easily go into the $2k range. Basic costs everywhere have jumped a lot. It's kinda terrible because wages are just starting to go up, for years the local grocery store was at $9 an hour. Now it's $14 and it's still not enough. People are being squeezed out of their rentals because a house that was worth maybe $75k is worth $250k, landlords are selling and I don't blame them.

 

It's kinda sad to see really, but the area has been found out

IMHO, that is going to happen in quite a few places with WFH in the Tech world.  Who happen to have "homes" in some of the most expensive cities in the country.  

Well, with one caveat- assuming that there is good high speed internet.

But it won't take much movement to have a pretty significant impact.

I agree totally.

Even though I perceive those rents as high, it's nothing compared to say....San Francisco. WFH is kinda leveling the rent field I think

I think most people consider themselves middle class, no matter what they "technically" are because they surround themselves with similar people. If everyone around you makes $50k a year, you think you're middle, and $200k is rich. If everyone around you makes $200k, you think you're middle and $500k is rich. I don't think the amount matters much, it's how you spend/save/invest it that gives you an idea of where you stand. Do you pay attention to what stuff costs, and at what level? If you need to budget to eat dinner out, I'd say you're on the lower end, if you can hit outback when you're in the mood for steak without thinking about it, middle, if it's Ruth's Chris anytime you're in the mood for steak, leaning towards upper. 
 

if you ask my Wife, and kids, I'd bet they'd say we are middle class because everyone around them lives the same way, so they don't know any different. As far as they know everyone goes on a few vacations, attends private school, doesn't think about the cost of stuff, etc. because it's how they've lived for years. My next door neighbor has said they're "upper middle" and since he played MLB for years, I know that's not close to being true. Next to him, I'm poor, but next to most, I'm not, so what am I?
 

I'd venture most here would be on the upper scale of income, yet not consider themselves anything more than "middle class" because it's a mindset. It's what we all think we are, we don't want to be "poor" and we don't want to be the "greedy rich" so we figure we must be in the middle. 
 

AT $11M weary is statistically pretty far up there, but based on where he lives, I bet he doesn't feel like he can stop without moving someplace cheaper to retire, that's the issue. It's a mindset. 

RX Reven' said:

alfadriver said:

So there is an odd class of people.  Ones who do have a considerable amount of money, but never, ever, ever use it.  It's a pretty small percentage of people- but they do exist.

How about this...

Lower Class = Don't have cake and don't eat cake.

Middle Class = Can either have cake or eat cake but not both.

Upper Class = Can both have cake and eat cake.

FWIW, I'm squarely in the have cake but don't eat cake camp...natural born worrier who despite finding good success in life, can't ever seem to really believe in myself.

Cake - cake - cake...must acquire more cake...never enough cake to feel safe.  

RX Reven

Your reply really resonated with me. I think it describes me, pretty much exactly.. so after posting nearly 3,000 times here, THIS is the first GRM post I shared with my wife. (She is surprised that it is not about cars).

her response:

I get it. But you have to remember to enjoy the cake. Cake is yummy

....Great conversation, this. Good people, y'all. Keep it going  

jharry3 said:

I had to take a comparative government class in high school.  We compared the USA to the USSR.

I remember being quite surprised that the average person in the Soviet Union at that time (1970's) had less real income than what the USA considered "poverty" level.

USA poverty level is quite a nice income in a lot of the world.   Think about all the people risking their lives at the southern boarder in order to live on USA poverty level income.  

Then consider that people today spend thousands on cell phones, cable TV, all the special channels,  have a vehicle for mom and dad that with probably combined notes close to $1000/month.   And we don't have  just health insurance as our benefit, we want health maintenance, which costs a lot more.  

People want it all and right now so go into debt for life.  

Yea, some people do all of that spending.

Not everyone, and especially not the poor.  On the same side, we can't fault poor people for having smart phones, as they are becoming very required in some aspects of society- otherwise, they can't even participate.  There are many things that used to be luxuries but have become requirements, and we should not fault people for having to buy and use those things just to operate in our society.  Looking back on the past 14 months, it should be pretty clear that good internet connection WITH good hardware to run it has become a requirement.  

It's very popular to criticize people for their purchases- and granted many of them are very much not required.  But some of them are.   Otherwise, the hole that you are in just gets deeper.