More Americans are breaking into the upper middle class | Hacker News Reader

More Americans are breaking into the upper middle class

wsj.com

32 pointsalephnerd85 comments

the thing that doesn't compute for me is that the definition of upper middle class here is 5-15x the federal poverty line, ok, but in 1970 the federal poverty line was like ~$3k (and ~$22k today) 10x in 1970 (~33k/year) in nyc you could buy a 2,000 sqft apt for like 2.75x your salary [1] today, that same apartment is like >10x - so while perhaps more people are earning "upper middle class" incomes, what that gets you has declined significantly.

[1]https://www.elikarealestate.com/blog/tracing-buying-real-est...

The poverty line, as established in the 60s, is simply 3x the minimum food budget. Food as a percentage of spending has decreased, while housing and other expenses have dramatically increased.

If the poverty line were to be adjusted to reflect the share that food takes up of income today, from ~30% in 1963 to ~6% today, the threshold for a family of four would go from ~30k a year to ~150k.

More in-depth explanation here: https://www.yesigiveafig.com/p/part-1-my-life-is-a-lie

that's really interesting thanks.

That article is BS, the author even acknowledges that in a later post.

The main reason the share went from 30% to 6% is because people are richer. Poor people spend more money on food than rich people.

It's true that lower income families spend a higher proportion of money on food [0], but that was equally true in 1963. It's a static fact about income brackets at any time, and doesn't explain the change in average share.

Food share dropped from ~30% to ~6% because real incomes have risen and food has become cheaper relative to housing, healthcare, education, and so on. That shift affects all income levels, including the poor. Your point doesn't contradict the article's, that the poverty line, based on 1960s food budgets, no longer reflect current costs of living.

Could you send the article where the author revises their claim?

[0] https://en.wikipedia.org/wiki/Engel%27s_law

In the 1950's poor people in America may have had housing, but there's a good chance that housing didn't have plumbing. Poor people in the 50's spent roughly 0% of their income on childcare. Much of the article is complaining about the cost of child care.

You may think that poor people should be able to afford child care. That's a valid thought. But then you can't compare that to a 1950's definition of poverty where child care is definitely not affordable by the poor.

In the 60s (and 50s, though not sure why we're moving backwards) most households were single income; childcare costs were virtually nonexistent because mothers typically stayed at home to raise children, and a family would get by on the father's income alone.

That actually illustrates the point nicely: typical economic and living situations from when the metric was created were very different from today in a variety of ways, and once again, the reason the 3x food costs number was chosen -- that roughly 1/3 of income of low-income households was spent on food -- is simply no longer true.

Now, what the poverty line should be is a whole 'nother topic -- for the record the ~150k number is more as an demonstration of how broken the metric is than an actual suggestion, at least as I see it. This discussion doesn't seem to be going anywhere though so I'm tapping out, but I would still appreciate it if you would link to the article you mentioned.

That sounds specifically like the housing shortage that is afflicting some of the most dynamic, productive parts of the country, like NYC and the California Bay Area.

Driven by NIMBYism and some other things, those areas stopped building anything like enough housing, with the obvious result that demand outstripped supply and prices rose, putting them out of reach of many.

That's kind of the origin story of the YIMBY movement, which started forming to fight that trend.

I don't disagree but i also think in terms of actual numbers, the majority of the people that earn these upper middle income salaries are living in more expensive urban areas (at least before work from home)

> in 1970 (~33k/year) in nyc

Comparing NYC in the 1970s to today isn't a "big apple to big apple" comparison.

NYC in 1970s was on the verge of bankruptcy [0] and federal receivership, saw 1,000 industrial firms leave annually leading to 500K jobs lost from 1969-76 [1], and saw around 880K residents [2] leave for suburbs or other states. NYC didn't recover until the 2000s [3].

For your discussion, a better comparison should be cities+towns that were rich in the 1970s that remained rich in the 2020s, and cities+towns that were poor in the 1970s and remained poor in the 2020s. Similarly, a better contemporary comparison for NYC in the 1970s would be Detroit or potentially even Los Angeles.

[0] - https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article...

[1] - https://www.polyarchives.hosting.nyu.edu/exhibits/show/strug...

[2] - https://www.pbs.org/wgbh/americanexperience/features/blackou...

[3] - https://www.osc.ny.gov/files/local-government/publications/p...

yeah that was a pretty cheap time to buy in nyc for sure - but i don't think that anyone would argue that the the ratio of home price/income has stayed flat/decreased over the past five decades

I remember 1970.

Few people had air conditioning. Cars might last 100,000 miles, if you got a good one. They performed poorly, got awful mileage, and crushed the passenger compartment if you got into an accident.

Many people smoked, and people died younger. Medicine wasn’t as good.

Rich kids might have a giant set of books called an ‘encyclopedia’. It was about the only way to learn things that were outside your circle, there was no internet.

TV came in 3 channels, and you had to be sitting in front of it when your show came on. There was no way to record a show for later viewing.

Of course race relations were much worse then. So were things for women and others. Job advancement wasn’t the same as it is today.

I wouldn’t go back for anything. The poorest people today ( even the homeless, who seem to often have really nice tents and weather gear, relatively ) have it better than in 1970.

I don’t care what things cost. Practically everybody is richer today.

The 1970s energy crisis as a result of issues in Israel and Iran did indeed help improve cars.

We had this thing called a 'library', with 'books', which helped me learn things outside my circle. Our schools even had a full-time librarian to help us with the technology. Even our church had a library, with a bunch of Tom Swift books.

We didn't live in the boonies like you did. On VHF we had 3 commercial network TV stations, an independent station, and PBS. On UHF there were more, including another PBS station, another independent station, and a commercial station in the Spanish International Network (SIN).

My parents could afford to buy a home and raise a family on a single income from my high school educated father. He died 10 years ago. My mother still gets benefits from his pension plan.

It's also true that cheap ass nylon tents are better than the canvas tents we used to camp in. While we metaphorically drown in plastic as the anthropogenic global warming predicted by the 1970s tightens its grip ever more.

Am I misunderstanding something or is your point - Poor people have air conditioning and better (but certainly not cheaper) medical outcomes, and netflix today, therefore they have a better quality of life than 1970? And people without homes have better tents and jackets, today?

Aren't these two different things?

Should "upper-middle class income" refer to your income regardless of COL, or should it refer to an arbitrary measure of what you can buy with it?

At least in my mind - if we were talking about statistical segmentation of income I think that’s right - but “middle class” and “upper middle class” denote a level of economic security, social status, lifestyle, disposable income whatever that I do think correlates with cost of living.

The headline is a remarkably rosy spin on it when the subheading is "Research shows that ranks of higher earners have grown markedly over last 50 years, while lower rungs of middle class have shrunk". The article is behind a paywall but it makes it sound like inequality is increasing.

That's the whole point. When people hear "the middle class is shrinking" they intuitively believe people are slipping down a rung and joining the ranks of the working poor. The data doesn't back that up. The middle class is shrinking, but more people are moving up a rung than falling down one.

Which isn't to say that you're wrong about wealth inequality increasing. The share of wealth controlled by the ultra wealthy IS increasing, but the specifics of how that is playing out are nuanced and, at times, counter-intuitive.

> more people are moving up a rung than falling down one.

How do you figure that? Do we have any data that backs that up?

You are commenting on the article that contains data that backs that up.

Since 1970. It's quite misleading to take two data points spread 55 years apart and make the titular claim as though the trend is continuing.

If you look at the top of this page you'll see an article with data.

But, Doctor, the data does back that up. The US middle class is shrinking, and most of the shrinkage is on the low end. There's no mystery about this, only potential for distractions.

Pretty much. It's reiterating an observation of mine [0] that we now live in a K-shaped economy where the 70th percentile and above are distinct from the 50th percentile and below.

Most HNers and their social peers are in the 70th percentile and above.

[0] - https://news.ycombinator.com/item?id=47064222

My son graduates college next month. Although he has an ok job lined up, he and most of his cohorts are incredibly pessimistic about the future and I'm not sure I can say that I blame them.

I don't know a single young person who has entertained any hope of owning a decent house at any point in the next 20 years.

It's the norm now, depressingly. Prior to 2020, It seemed like it might be eventually possible for some of us if we make smart decisions in terms of careers, saving money, and everything else.

Post 2020, and now especially with the economy being propped up by AI that appears to be on the verge of killing (or at least significantly wounding) one of the last viable career paths that would allow for homeownership, I've accepted that it probably just won't happen. Same with having children. Somehow having both feels like a pipe dream.

It's also why I'm not shocked that a significant number of startups lately are just young people doing whatever they can to grab some wealth before things get even worse. Overall, there's an expectation that things will simply keep getting worse with little chance of turning around. It'll be interesting (in a morbid way) to see how this affects the kids currently growing up today.

Also, more Americans are living in poverty. But don’t look over there.

Doesn't look like it. What's your source? https://www.statista.com/statistics/200463/us-poverty-rate-s...

Poverty line is different from living paycheck-to-paycheck.

The growth is not dramatic, but steady over time:

https://institute.bankofamerica.com/content/dam/economic-ins...

>We consider a measure of necessity spending that includes but is not limited to childcare, external credit card payments, gasoline, general retail, grocery, housing (mortgage/rent), insurance, cable TV/broadband, public transportation, tax payments, vehicle costs and payments. We consider spending across payment channels (ACH, credit and debit card, bill pay). Income is defined as regularly recurring payments into accounts, such as payroll, social security, unemployment insurance pensions, and annuity income. Households are defined as living paycheck to paycheck if in the quarter their necessity spending exceeds 95% of their income

This is more thoughtful than some "paycheck to paycheck" discourse, put objectively well-off people definitely put themselves into this picture by signing up for more house, more car, or more credit card spending than even the relatively high level they can afford.

Where I live the income limits for entering homeless housing are over double the federal poverty threshold. It is a completely failed metric.

Relatively, the 1%er money isn't being spent on education, health, housing and broad productive investment.

https://wid.world/country/usa/

source?

Great for these people, but will there be such opportunities for their children?

I thought I did well for myself, finding myself among the middle class, the end is on the horizon.

The social elevator works well enough to expect that one's children will do well if you provide them with the tools they'll need (which are basically a good education and love and support).

Is that an assertion? I don’t know that is necessarily always true in modern America.

It does seem like a lot of people have extrapolated the second half of the 20th century to be the baseline expectation from here on out.

I'm worried about my kids, but don't forget to worry about yourself, too! I've got just enough saved up for retirement by current retirement calculator standards (if I keep working and contributing until I'm 67), but inflation could easily end up negating all of it long before I can use any of it.

> but will there be such opportunities for their children

Yes, assuming they grew up in a household in the 70th percentile or above [0] income bracket and/or are on good terms with your parents and siblings.

At the end of the day, the family unit matters because intergenerational wealth has always been important.

> I thought I did well for myself, finding myself among the middle class, the end is on the horizon

Are you maxing out your Roth 401K (and if possible) your Roth IRA as well while also keeping fixed costs like rent or mortgage at around 40% of post 401K+IRA disbursement?

If so, you have a shot of climbing up into the upper middle class.

[0] - https://www.cbo.gov/publication/60807

> but will there be such opportunities for their children?

Yes there always are.

To Downvoters: This statement is obvious. I'll tell you why then:

In 2008, most of you remember the 2008 crash Don't you? There were opportunities then.

We had the 2020 crash in the Covid era, there were opportunities as well back then.

There will obviously be another crash in this AI hype cycle and the moment the crash arrives, there will certainly be more opportunities from that.

I'll give you a massive head start: crypto, x402 / tempo, energy, and robotics.

> Research shows [...]

In American mice, perhaps.

Anyone have a gift link?

https://archive.ph/2026.04.05-025428/https://www.wsj.com/eco...

Ive found lately that a few sites, including WSJ, archive.ph just hangs on the loading screen. The existence of your link should make it skip the loading, as in understand it. Is there a trick to this?

Thanks.

No kidding. If you allow a population to gamble online, with prediction markets, derivatives, etc. don't be surprised if you widen the wealth gap.

More winners, but even more losers.

But hey, you only ever hear about the winners, so it's great for the image. America is doing great!

The subtitle specifically says 'the lower rungs of middle class have shrunk'? This seems a little ridiculous to just say. As trendy as it is to hate on modern day life and talk about how awful it is, in material terms it's pretty clearly better than it's ever been.

> The subtitle specifically says 'the lower rungs of middle class have shrunk'?

Yes, perhaps because they are now in the class below that?

>in material terms it's pretty clearly better than it's ever been.

On a time scale of centuries, sure. On a time scale of decades, absolutely not.

"For the first decade of his career, he lived in an apartment and worried about paying for vacations. Then, in his early 30s (...)" ... here is America, without paid vacation guaranteed by law since the government does not truly care about the middle or working class. It's amazing how serious media can write articles about economy, while the blatant obvious deficits slip right by their nose..

Mandating by law paid vacations, laid parental leave, etc... doesn't make those things materialize out of thin air.

Every company accounts for those things and takes a bite off the paychecks of their employees to cover those expenses.

In america a lot of companies offer those without being mandated and those that don't have to offer higher salaries to stay competitive. End result is that employees that want can user those higher salaries to pay for the vacations or take some time off. And those that don't get to keep the extra money, of course.

While I agree with your sentiment, the article seems to be referring to being able to afford vacation trips, not that vacations are unpaid.

Reminds me of when all the Silicon Valley freaks decided to suddenly care about the fertility crisis, but also would turn around and pronounce how young professionals need to be 996 slaves to survive their brave new world.

The blatant obvious deficits are where the money is made. The articles are written to help you focus either on pie in the sky or on meaningless stock jitters.

As someone that thinks of myself as a low-caste, middle class American it's interesting seeing all of these people listed in the article making less than me

A lot of people consider themselves middle class and are wrong in that self assessment. It goes both ways, you have people making a half a million a year and people making twenty thousand who both consider themselves middle class.

I went to a state school, worked at Amazon and didn’t get a 2300 on my SAT - I definitively am lower caste but the caste/class divergence isn’t well understood in culture I think.

You're the one bringing up caste. Middle class is determined by income and it's not subjective.

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