Punchinello’s Chronicles

September 10, 2008

The Middle Class

Filed under: View from the Bottom — Punchinello @ 2:31 pm
Tags: , , ,

At last I’ve found a decent definition, thanks to economist Lester C. Thurow, of what constitutes the middle class. The middle class (middle income wage-earners) are those who make between 75% and 125% of the median income. Of course that means knowing what “median” means.

If you take a bunch of numbers and add them all together, then divide by the count of those numbers, you have the “mean,” also known as the “average.” So if you have 2, 6, 9, and 8 and add those you get 25. The count of the numbers being added is 4, so 25/4 is an average of 6.25.

On the other hand, if you take a group of numbers and arrange them from lowest to highest, the number right smack dab in the middle is the “median.” Use 1, 4, 8, 9, 12 as an example, five numbers. The median number is 8.

The median income is right in the middle of the lowest and highest reported income in some area. As of 2007, the Census Bureau reports that median income for the whole United States is $50,233. Taking Mr. Thurow’s formula, then if you make between $37,675 and $62,790, you’re in the middle class.

Okay, that’s not too bad. When I was a kid, I thought $20,000 a year was terrific! But that was back in the 60s and 70s, so fuggeddaboudditt nowadays. What’s the poverty threshold? Well, as defined by the OMB (Office of Management and Budget), the poverty threshold for a single individual is $10,590. Hmm, so it seems that if you’re making about 21% of the national median income, you’re totally poor!

Now the thing is that HUD (Dept. of Housing and Urban Development) defines “low” income as not exceeding 80% of the median. In this case, the numbers would say that if you make less than $40,186 you’re in the low income world. That’s quite a gap from $10K to $40K per year!

Around here, people on disability or Social Security are lucky to get between $8,400 and $18,000 a year. I’m figurin’ that means Social Security is designed to provide people a poverty income. Of course, if you remove food and energy (heat, A/C, fuel, gasoline) from the mix, then anyone ought to be able to live just fine on, say, $15K per year, right?

The consumer price index (CPI) is basically just a bunch of things the government claims are typical for people to buy. But what’s in that list isn’t any kind of real or objective standard, it’s whatever the government says it is; kind of like “obesity” statistics, based on nothing.

Beginning in the Carter administration, federal economists have cleverly redefined the CPI, with the goal of removing from the index expensive items, including food and energy, that would push the it higher. — Jerome R. Corsi, Worldnet Daily.com

I wonder how many people were in the middle class, and with the real estate “concerns” now, are starting to fall into the low-income bracket? I’m guessing people will start wondering what’s going on with that middle class, eventually, and maybe even wonder if perhaps the whole bracket is actually disappearing.

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