$250,000 A Year Is Not Middle Class Anywhere In America

04/24/2010 05:12 am ET | Updated May 25, 2011
  • David Sirota Newspaper columnist, radio host (AM760), bestselling author

Last year, the New York Times told us it's difficult for people to make ends meet on $500,000 a year, and the Washington Post insisted that it's hard to "squeak by" on $300,000 a year. Now the Denver Post insists that if you make $250,000 a year, you may only be "middle class":

The $250,000 income cutoff has become a near-mythical figure in American politics, setting up a heated and sometimes highly personal debate...Are (those who make $250,000 a year) rich? Or, as some define that income range, simply middle class?

This follows CNN's Kiran Chetry famously insisting that "Some would argue that in some parts of the country" $250,000 a year "is middle class" -- which itself was a follow-on of ABC anchor Charlie Gibson making a similar assertion at a 2008 presidential debate. Put it all together, and you have a pretty intense misinformation campaign to make us believe that the very wealthy are, in fact, poor.

It is, of course, misinformation. Even in the wealthiest, highest-cost-of-living places in America, $250,000 is most decidedly not "middle class":

As census data show, state median incomes vary from $65,933 in New Jersey to $35,971 in Mississippi. But even in wealthy states, $250,000 ain't bad-it's nearly four times the median income in wealthy states like Maryland and Connecticut. And even if you look at the wealthiest metropolitan areas-Washington, D.C. ($83,200); San Francisco ($73,851); Boston ($68,142); and New York ($61,554)-$250,000 a year dwarfs the median income...

[T]he number of places where $250,000 stretches you is small indeed-certain parts of Greenwich, Conn.; several neighborhoods in Manhattan; some of California's coast. Even in the most exclusive communities where the wealthy congregate, $250,000 is still pretty good coin. Consider this: CNNMoney recently ranked America's 25 wealthiest towns. In all of them, someone making $250,000 would have a difficult time buying his dream house. But in all of them, making $250,000 means you're doing better than most of your neighbors. Even in America's richest town, New Canaan, Conn., the median income is $231,138.

This isn't to say that you are living the life of Bill Gates if you make $250,000 a year. Nor is it to say someone making that amount isn't working hard. But it is to say that if you make $250,000 a year, you aren't anywhere near the "middle" - and, in fact, you have plenty of money to not have to worry about money, unless you are making profligate discretionary choices.

That's a key point in what constitutes "rich" and "not rich," and kudos to the Denver Post for at least examining that problem of profligacy among the wealthy:

"One of the things we know about people is their consumption expectations uniformly expand to fill their income," said Jeffrey Zax, a professor of economics at the University of Colorado at Boulder. "But there's strong social pressure not to think of ourselves as wealthy. There's a fair amount of self-deception going on here."

Indeed, while "wealthy" can have negative connotations in the minds of the wealthy, it's not a word that automatically connotes value judgment. You can be a wealthy person who fully earned your wealth through the hardest of hard work, and you can be a wealthy person who received your wealth through no work at all (think: trustafarian). You can be an honest wealthy person or a dishonest wealthy person. You can be a greedy wealthy person or a charitable wealthy person.

You get the point -- in attempting to avoid any negative connotations, wealthy people delude themselves into believing they aren't actually wealthy, when, based purely on math, they are both relatively wealthy in comparison to everyone else, and extremely wealthy in terms of being able to afford the basic necessities of life even in the highest-cost-of-living locales in the nation.

The problem, of course, is that perception can become reality.

Media voices perpetuate these myths of the impoverished wealthy, in part, because many media voices are themselves wealthy -- and there's no more powerful class solidarity than that which exists among the rich.

Indeed, the wealthy don't just convince themselves they aren't wealthy, they try to create the perception among themselves, politicians and the public at large that they are "middle class" and thus persecuted by taxes. Put another way, the real danger of the New York Times, Washington Post and Denver Post article floating the idea of the wealthy as not wealthy is in skewing our political debate over economics. If someone making $500,000 is just "getting by," and someone making $300,000 is barely "squeaking by" and someone making $250,000 is in the persecuted "middle class," then having any fact-based discussion about tax inequities becomes that much harder.