REVEALED: The six cities where earning $200k-a-year is still only enough to be considered middle class
An income of $200,000 a year may seem like enough for a luxurious life.
But in six of the 25 largest U.S. metropolitan areas, inflation has been so high over the past two years that this six-figure salary is enough to qualify for middle class status.
In San Francisco, even a family earning more than $250,000 a year would be considered middle class, although they would be at the top of the category.
In Washington, D.C., a city filled with well-paid lawyers, politicians and consultants, and probably just as many poorly paid congressional staffers, things aren’t much better. A household in the nation’s capital can earn $235,000 and still be firmly in the middle class.
In Seattle and Boston, two tech centers like San Francisco, a salary of just over $200,000 is sufficient.
One of the most common definitions of the middle class — as specified by the Pew Research Center — is that someone earns two-thirds or twice the median income in his or her area.
The figures below represent double the median income in the cities mentioned.
If most Americans’ salaries were even remotely similar to these figures, perhaps there would be no cause for concern.
But since incomes peaked in 2019, the amount Americans earn from their jobs has steadily declined for three years in a row.
Skyrocketing inflation has eaten up their dollars, with price increases hitting a 41-year high in June 2022.
For the average person, the cost of staple foods like meat and eggs has skyrocketed after the pandemic.
Some families still struggle to stock their pantries on less than $400 a week.
Relatively new homeowners are not only faced with high interest rates, but also record-high home insurance premiums.
Turning again to San Francisco, while incomes are high, the median home price was still $1.2 million in December 2023.
Jeff Rose, founder of Alliance Wealth Management, explained how difficult it can be to keep these numbers realistic, even for a household with an income of $150,000. That’s well above the median of $136,692.
“Monthly payments on a $1.2 million home, even with a significant down payment, can easily add up to $5,000 or more, depending on mortgage terms and interest rates.
“If you make $150,000, this could be more than 40 percent of your gross monthly income.”
Auto insurance is also starting to become a burden, with the average annual premium set to hit $2,019 in 2023 and expected to rise 7 percent this year.
This is especially a problem for the US, a country more dependent on cars than many other countries.
Mark Hamrick, senior economic analyst at Bankrate, said: “Many Americans are caught between the ongoing shock of rising prices, a lack of income growth and a sense that their hopes and dreams are out of sync with their financial capabilities.”
Economists don’t all agree on what really constitutes a middle-class salary. There is also some disagreement over Pew Research’s definition that two-thirds of the middle income doubles the median income.
Suppose you live in Holmes County, Mississippiwhich has one of the lowest median household incomes in the country, at $28,818. By this definition, you could earn just $19,212 a year and technically be middle class.
It is important to note that even the government has not yet given an official definition of what middle class means.
Legislators are typically much more interested in classifying poverty and wealth.
San Francisco has the highest burden of being considered middle class according to Pew Research’s definition. A family earning more than $250,000 a year would be considered the top of the middle class earners
Washington DC was not far behind San Francisco, as any household with an income over $230,000 would be considered middle class
In Seattle, pictured, a household can earn up to $214,000 a year and still be considered middle income
Boston families with incomes over $200,000 can still be considered middle class
For example, according to an American study, the poverty line for a family of four is $31,200 per year. Health and social services.
And President Joe Biden often talks about how He won’t raise taxes on families making $400,000 or lessin effect revealing where he draws the line between who is rich and who is not.
But is the middle class really between $31,200 and $400,000?
Most economists and policy think tanks don’t give such a big range.
So maybe it’s better to rely on people’s feelings about how much money they need to feel “comfortable.”
A Bankrate survey found that the “magic number” the average American thinks they need to earn to be financially stable is $186,000 a year. That’s far more than double the average American salary of $79,000.
Additionally, only 6 percent of Americans say they earn enough to feel secure, while the majority think this will probably never happen, the survey found.