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Who or what is the middle class? - Gut_Check - MSNBC.com



Who or what is the middle class?

Economic data can't fully explain why so many feel financially squeezed

By John W. Schoen Senior Producer Updated: 8:38 a.m. MT Oct 17, 2007

When politicians, economists, academics and journalists try to assess the current economic status of the "American middle class," the debate often begins with a question that some concede is all but impossible to answer: Who, exactly, is middle class in America today?

One way to find out is to ask Jerry Orzechowicz, a salesman in the hospitality industry, who lives in Merrillville, Ind., population 30,000, tucked in the northwest corner of the state, about 35 miles outside Chicago.

"I'm about as middle class as you can get," he said.

Orzechowicz and his wife, who also works, earn a combined annual income of between $70,000 and $90,000 and have two kids, one of whom is still in college. They own their own home, four cars and four TVs — including a high-definition widescreen model with surround sound.

Orzechowicz says just about anyone living on $50,000 a year can enjoy a middle-class existence in his neighborhood, which is why he says he’s puzzled when he hears that it’s getting harder to maintain that lifestyle in America.

“You can have a house and pay the bills and put food on the table and save a little and take a little vacation once a year," he said. "To me, that’s maybe lower end of the middle class, but it’s better than 98 percent of the people in the world.”

Despite income of $100,000, ‘We are squeezed tight’ But many Americans who consider themselves middle class told msnbc.com they do feel financially squeezed. One of them is Kathy McClain, a wife and mother of three teenagers in Westbrook, Maine.

McClain and her husband have a combined income of $100,000 a year, which leaves about $80,000 after paying income and property taxes. They have no credit card debt, don’t take expensive vacations, and she drives a 9-year-old car. Tuition for their oldest child, now at the state university, costs another $16,000. The family makes too much for her to qualify for work-study.

“I can tell you quite honestly that we are squeezed tight,” she said in a recent e-mail. “We live paycheck to paycheck. Yet, by all standards, we are doing well.”

The varied experiences of Americans who consider themselves middle class aren't really surprising. As economic and social forces buffet families chasing the American Dream, there’s disagreement among the experts who crunch the numbers about how just well or poorly this group is faring — or even who they are.

There is near-universal agreement that the gap in wealth between the richest American and the poorest is widening to levels not seen in nearly a century. But that doesn't tell you much about how those in the middle are faring.

Data aside, being “middle class” in America today appears to be mostly a state of mind. And there are very real sources of anxiety for those who aspire to a comfortable middle-class life in America.

Congress to the rescue? With the campaign season gearing up, there’s a great deal of talk about the need for government to take a greater interest in this key demographic group. In theory, that's where the bulk of American voters are. So earlier this year, Congress asked its research service to come up with a definition of middle class.

The researchers started by looking at income levels. 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.

But those numbers don’t adequately reflect the state of mind of those who consider themselves middle class. Surveys have shown that, while people consider $40,000 a year to be the low end of what it takes to buy a middle-class life, some people who make as much as $200,000 a year still consider themselves middle class, the researchers said.

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10/17/2007 2:45 PM

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