Who is actually the middle class?
The Boston Globe - 03/23/2014
There is a fundamental obstacle to most conversations about income inequality: Just about everyone likes to believe that they are average. Whether you make $32,000 or $200,000, you tend to think that you earn at or about the US’s median income.
Of course, this can’t be true — actual US median income is about $51,000. Yet the term “middle class” is often bandied about in political discourse because, correct or not, a significant majority of people self-identify as belonging to the middle class. When asked to define “middle income,” a plurality of poll respondents at each income level state that middle income is whatever they themselves make. In addition, researchers Michael Norton and Dan Ariely find that where people are on the income spectrum affects not only what they believe wealth distribution looks like but also what an ideal wealth distribution would look like — not surprisingly, people tend to think that an ideal distribution gives their income group more wealth than people in other income categories think is ideal. More surprisingly, however, all income groups understate the true level of wealth inequality in the United States but nonetheless believe that an ideal wealth distribution should be more equal than the status quo. That makes it all the more important that discussions on income and wealth inequality be put in the context of what the actual distributions look like.