Wall Street Journal says more households move into upper middle class

I suppose this article from the Wall Street Journal is bad news for Bernie bros and the doomsayers of the progressive Democratic Party so I imagine it will be ignored because it’s inconvenient. But it also supports the idea that there is a “shrinking middle class “so that falsehood could be promoted even though this article shows the middle class is shrinking because more households are moving into upper middle class territory,.

This is one view of economic prosperity in the United States, and it has some good information.

https://www.wsj.com/economy/more-ame...m_medium=email

excerpts, bolding mine:

…The gains [in income] span generations. Many baby boomers, born to parents who grew up in the Great Depression, are living well on their savings, aided by steady Social Security checks and decades of stock-portfolio gains that they can now tap. Millennials, who everyone worried would be permanently set back by the 2008-09 financial crisis, are earning solid incomes, buying homes and surpassing their parents.
Many families are surprised to find that they have moved into this new economic tier, and see themselves as comfortable, not rich. They tend to have jobs that are white collar but not flashy—think accountants, not tech founders.
This doesn’t mean that all Americans are climbing the ladder. Entrenched inflation and higher prices on major necessities have pushed many families closer to the financial edge, or locked them out of homeownership. Those costs weigh on high-earning families too, and for many are the reason they don’t feel wealthy.
The AEI report divided families into five different groups by income. Three groups were in the middle: lower middle class, core middle class and upper middle class.
The authors found that more families now fall into the two highest-earning groups—upper middle class and rich—and fewer fall into the three lower-earning categories.
In 2024, about 19% of American families were considered “poor or near poor,” according to the AEI report, down from about 30% in 1979. The report defined that group as a family of three earning about $40,000 or less in 2024 dollars.

I can editorialize about one point in this article about people who “don’t feel wealthy “and I’ll tell them they don’t FEEL wealthy because

1. feelings are not facts (thank you Ben Shapiro)

2. you all are likely spending your money on stupid crap you don’t need, causing you to run out of money at the end of the month .But dude, that’s on you

Housing prices here have tripled since the start of the pandemic. So I think that is why a lot of people don't feel wealthy, because they aren't, since their money has not kept up with housing prices.

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Originally Posted by Tybee

Housing prices here have tripled since the start of the pandemic. So I think that is why a lot of people don't feel wealthy, because they aren't, since their money has not kept up with housing prices.

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Tripled? In just 6 years? Wow!

Prices in my neighborhood have doubled since we moved here, but that was 31 years ago.

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Originally Posted by Alan

Tripled? In just 6 years? Wow!

Prices in my neighborhood have doubled since we moved here, but that was 31 years ago.

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Yeah, a friend who is selling her house said the same thing last week, that prices had tripled. Today I looked at one that I looked at that was 53,000 about seven years ago, and it is for sale for 287000 today. That's even worse. I am seeing several of the same houses from before we moved here that are now up for sale again, and I have seen some that have more than tripled.

My little cottage has almost doubled in price since 2017 when we bought it.

So, here is my very dumb, uneducated take on the story behind the numbers in the WSJ article. I have seen other stories about how great it is that the "core" middle class is now moving to the "penthouse in the sky." Here is a picture I took of a graph that made the same case:

Attachment 6772

Here is the analysis: https://www.aei.org/research-product...-middle-class/

And here is my feeling about affordability.

The more people who are richer than Joe Shmo, the more the affluent class drives prices up. Isn't the free market all about "what the market will bear?" Well, if 75% of the people think a little shack on the beach is worth a half a million dollars to them, it limits the opportunity for people like the grandfather who purchased it two generations ago for a cheap price.

When it comes to food, 75% say, "oh, $15.00/lb for steak! No big deal!" And 25% are saying, "I'm going to have to look for ground beef in the expired pile." And this isn't just for low-income earners. if things are skyrocketing beautifully for the nouveau riche, what's happening to all the Baby Boomers who are retiring and relying on Social Security for the most part. They are presented with a double whammy--not only do they have too little in their limited stash to comfortably get by, but now basic needs are rising. You can say "too bad--you should have planned better," but until you've walked in the shoes of everyone who is struggling today, it's unfair to blame the nouveau poorer core middle class for feeling squeezed.

It just warps the value of everything when 75% of the people have higher thresholds of affordability.

Now, I don't know what these lines mean in terms of income and buying power because I only scanned the analysis. I'm just looking at the picture that tells me that the "core" middle class is no longer "core" in the way that the middle class was in the post-war years. That's my other point of contention--what is the definition of prosperity? That's a whole other thing that these financial analyses don't do a good job of explaining. We felt pretty good in the 50s and 60s about our place in the economic spectrum. But now we have so many cultural forces that are diminishing our core values that "affordability" is an exercise in scarcity of other aspects of a good life. And we can't totally blame people whose worldviews are shaped by forces outside themselves.

I have no idea if this makes any sense, but I'm open to discussion. I'm a qualitative (not quantitative) researcher for a reason--statistics aren't my strong suit, so I'd love to see counterarguments.

catherine says:

“…It just warps the value of everything when 75% of the people have higher thresholds of affordability...”

Hmm, I have to think about this in my response to it. But my off the top of my head reaction is:

“everything “isn’t for everyone, and different products at different price points are marketed to populations with different income streams.

not all people can afford a 3,000 sq ft 4/3 new house in suburbia, I mean a nice one.

Not all people should be able to afford this in my opinion. Who’s gonna buy the little old houses that need families to live in them? Why must everyone strive for what the upper classes buy?

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Originally Posted by Alan

Tripled? In just 6 years? Wow!

Prices in my neighborhood have doubled since we moved here, but that was 31 years ago.

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well when you live in flyover country like we do, things move more slowly, including the real estate market.

I don’t honestly know about how my house values have gone up because we buy uninhabitable houses for the most part and then make them habitable. So of course their market value increases but we also put crap tons of equity into them so who knows.

real estate values are local anyway, and the coasts are always more expensive because people think they have to live there.

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Originally Posted by iris lilies

Hmm, I have to think about this in my response to it. But my off the top of my head reaction is:

Not all people should be able to afford this in my opinion. Who’s gonna buy the little old houses that need families to live in them? Why must everyone strive for what the upper classes buy?

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Well, one of our friends' sons got married and bought a little Cape Cod outside of Boston. Tiny. They showed me pictures and it looked a lot like the Cape Cod I grew up in. They paid $600,000!! Her family has money, apparently. With a 20% down payment, that's $4000/month! On a 30-year mortgage! Now, I made good money in my prime years, but I could not have afforded $4k a month. My home, which I felt I could comfortably afford was under $2k a month. I don't get how people earn enough to live in some of these places. I wish people would go back to investing in communities like yours, IL.

Here's a good buy (really cheap for Portland) but it's 960 sq feet 2 bd, 1 bath old house--really pretty
166 Maine Ave, Portland, ME 04103 | MLS# 1657103 | Redfin

But it's 490k. Here's another one that is a bargain in Portland:
93 Caron St, Portland, ME 04103 | MLS# 1653853 | Redfin

Neither of these are in fancy neighborhoods

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Originally Posted by catherine

Well, one of our friends' sons got married and bought a little Cape Cod outside of Boston. Tiny. They showed me pictures and it looked a lot like the Cape Cod I grew up in. They paid $600,000!! Her family has money, apparently. With a 20% down payment, that's $4000/month! On a 30-year mortgage! Now, I made good money in my prime years, but I could not have afforded $4k a month. My home, which I felt I could comfortably afford was under $2k a month. I don't get how people earn enough to live in some of these places. I wish people would go back to investing in communities like yours, IL.

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key words “ outside Boston.”

well no chit Sherlock, the upper classes are centering in coastal paradise.

Just to iterate, I LOVE New England. Is super attractive but for those awful winters. And in my younger day, the real estate would’ve been beyond me, but now I can afford it mainly because I’ve lived in flyover country where real estate is cheap and I can build up assets outside of primary home.

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Originally Posted by catherine

My little cottage has almost doubled in price since 2017 when we bought it.

So, here is my very dumb, uneducated take on the story behind the numbers in the WSJ article. I have seen other stories about how great it is that the "core" middle class is now moving to the "penthouse in the sky." Here is a picture I took of a graph that made the same case:

Attachment 6772

Here is the analysis: https://www.aei.org/research-product...-middle-class/

And here is my feeling about affordability.

The more people who are richer than Joe Shmo, the more the affluent class drives prices up. Isn't the free market all about "what the market will bear?" Well, if 75% of the people think a little shack on the beach is worth a half a million dollars to them, it limits the opportunity for people like the grandfather who purchased it two generations ago for a cheap price.

When it comes to food, 75% say, "oh, $15.00/lb for steak! No big deal!" And 25% are saying, "I'm going to have to look for ground beef in the expired pile." And this isn't just for low-income earners. if things are skyrocketing beautifully for the nouveau riche, what's happening to all the Baby Boomers who are retiring and relying on Social Security for the most part. They are presented with a double whammy--not only do they have too little in their limited stash to comfortably get by, but now basic needs are rising. You can say "too bad--you should have planned better," but until you've walked in the shoes of everyone who is struggling today, it's unfair to blame the nouveau poorer core middle class for feeling squeezed.

It just warps the value of everything when 75% of the people have higher thresholds of affordability.

Now, I don't know what these lines mean in terms of income and buying power because I only scanned the analysis. I'm just looking at the picture that tells me that the "core" middle class is no longer "core" in the way that the middle class was in the post-war years. That's my other point of contention--what is the definition of prosperity? That's a whole other thing that these financial analyses don't do a good job of explaining. We felt pretty good in the 50s and 60s about our place in the economic spectrum. But now we have so many cultural forces that are diminishing our core values that "affordability" is an exercise in scarcity of other aspects of a good life. And we can't totally blame people whose worldviews are shaped by forces outside themselves.

I have no idea if this makes any sense, but I'm open to discussion. I'm a qualitative (not quantitative) researcher for a reason--statistics aren't my strong suit, so I'd love to see counterarguments.

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The study is indeed the one the Wall Street Journal article used because they share one of the graphs.


This economic study reiterates that the middle class has been “hollowed out “because many households have moved into upper middle class territory. The authors do mention there should be a gain of goods and services these families “should “ be able to afford with their increased wealth.

If as you say rising costs do not afford these families tangible betterment, then I guess it doesn’t really matter if they are increasingly upper class.

it’s too bad that the cost of Moderat houses have risen so much. But I can’t get too sad that today’s young families can’t afford the vacation home that their grandfather could afford because vacation homes are not a necessity. If the vacation homes in prime spots are increasingly desirable, why shouldn’t the prices rise? Why must everyone who wants a vacation home, a cabin on the lake, get one? In the Bernie utopia, does everyone get a house on a lake?

Quote:

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Originally Posted by Tybee

Here's a good buy (really cheap for Portland) but it's 960 sq feet 2 bd, 1 bath old house--really pretty
166 Maine Ave, Portland, ME 04103 | MLS# 1657103 | Redfin

But it's 490k. Here's another one that is a bargain in Portland:
93 Caron St, Portland, ME 04103 | MLS# 1653853 | Redfin

Neither of these are in fancy neighborhoods

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that red house is super sweet, and the other one is nice too.


I look at real estate in Portland. There is a row of red brick Victorian attached houses that I really really like.

Our neighbors bought a small house in 2016 for $295,000. They're putting it on the market for $550,000, and I bet they'll get at least $600,000. for it. It's 790 SF, 2 bdrm, 1 bath, almost no back yard. It's in pristine condition. We are "outside Boston," i.e. 12 miles or 1.5 hours away.

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Originally Posted by iris lilies

But I can’t get too sad that today’s young families can’t afford the vacation home that their grandfather could afford because vacation homes are not a necessity. If the vacation homes in prime spots are increasingly desirable, why shouldn’t the prices rise? Why must everyone who wants a vacation home, a cabin on the lake, get one? In the Bernie utopia, does everyone get a house on a lake?

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I agree with you. Waterfront property appreciates much faster than other properties. I used that just as an example. It's just a little mind-blowing to me that the little shack I bought in 2018 for $164,000 is worth so much more just nine years later. And I know it's because there is so much more disposable income in a larger proportion of the population, but it feels like there is a lot less disposable income for the rest.

I agree with you that the culture has pushed "need creep" much higher, so these perceived needs have added to the sense of deprivation and lack of affordability overall, but again, some of this has been pushed by omniscience of social media. Anyone with an Instagram account can make it look like they are better off than you are. Yet, I still think that the rise of the middle classes to upper middle class in numbers a) doesn't tell the whole picture of what they are and aren't purchasing and b) the true impact of widening inequality overall.

This overlaps with a discussion on another thread, but our neighbors who are putting their house on the market are planning to go back to renting, because "we just don't want to do this anymore." He is retired and she is an RN planning to work for 6 more years; they are in their mid-sixties. I was surprised, because he seems to really like puttering around his property, and has a sideline of buying cars, fixing them up and selling them. It also seems like a great little home for aging in place. I wonder what he will do with his retired self in an apartment, but it's definitely not my problem. To DH and I, it seems crazy to sell a house and then rent, but I suppose it can be sensible in many respects at a certain age. I'm sorry they will be moving though; they are good neighbors.

I sometimes wonder about our former member Cathy A, who lived in a very rural setting on a large piece of property. She had a lot of medical issues and I believe some mobility impairment, but was determined to stay in her home. Hopefully that works out OK for them, because it didn't seem like there was any willingness to develop a Plan B.

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Originally Posted by rosarugosa

…I sometimes wonder about our former member Cathy A, who lived in a very rural setting on a large piece of property. She had a lot of medical issues and I believe some mobility impairment, but was determined to stay in her home. Hopefully that works out OK for them, because it didn't seem like there was any willingness to develop a Plan B.

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I see this far too often with my friends and acquaintances.

As I’ve mentioned before, I have a cohort of senior and elderly people because that’s who tends to be in the plant societies and garden club. They dig in their heels about moving any place else. Their house gets junked up because they lose some executive function and how to sort and be rid of things, plus, they’re always at doctors offices and doctors appointments so they have limited time to live their old life. A layer of grime and dust settles on everything.

but there are are exceptions. One garden club acquaintance who was hobbling around after multiple surgeries put her house on the market practically the moment after her husband died and moved to a condo. I like this condo in many ways and would live there.

The degradation of my big Iris beds is starting to weigh on me. I Have many flower beds, and the ones attached to my house are well kept, orderly and planted up. One of them is incredibly beautiful because it’s a full four years old now and fully mature.

But the big Iris planting down the hill in our one acre is suffering and has suffered for years. Even after a major renovation and some of the beds last year, things are not looking good. So, I’m thinking about abandoning yet another 60 spots for iris.

The realtor who sold us our house here also lives in my town and became a good friend. She had a beautiful 10-acre plot with a home that she updated tastefully. Gorgeous house, but she has that personality where everything has to be perfect. Her dream was to only stay there a few years and then move into Manhattan. Her dream was slightly deferred, but sure enough, last year she gave signals that she was readying her home to list and show it.

She listed it in the summer 2025, and it sold by the end of the day for 1.2M. Here's the listing: https://www.zillow.com/homedetails/1...53318232_zpid/

She sold her cars and most of her furniture and moved into a 1BR place on the East Side. She is thrilled. I don't care how exciting NYC is, or how great it is not to have to mow 10 acres, I would NOT get a 1BR as a principal residence. And she paid probably close to a million for it. Different strokes. She is SO happy, constantly posting pictures of her and her dog at Centrl Park doggie meet-ups (it's amazing that the meetup is breed-specific, and a lot of people show up).

I could be tempted, though to live in a place maintenance-free. If I did, I could still garden as a volunteer Master Gardener.

My DH has a saying… “Pretty only goes so far”! Good for her! Doing what SHE wants to do and not listening to others trying to dissuade her.

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Originally Posted by catherine

The realtor who sold us our house here also lives in my town and became a good friend. She had a beautiful 10-acre plot with a home that she updated tastefully. Gorgeous house, but she has that personality where everything has to be perfect. Her dream was to only stay there a few years and then move into Manhattan. Her dream was slightly deferred, but sure enough, last year she gave signals that she was readying her home to list and show it.

She listed it in the summer 2025, and it sold by the end of the day for 1.2M. Here's the listing: https://www.zillow.com/homedetails/1...53318232_zpid/

She sold her cars and most of her furniture and moved into a 1BR place on the East Side. She is thrilled. I don't care how exciting NYC is, or how great it is not to have to mow 10 acres, I would NOT get a 1BR as a principal residence. And she paid probably close to a million for it. Different strokes. She is SO happy, constantly posting pictures of her and her dog at Centrl Park doggie meet-ups (it's amazing that the meetup is breed-specific, and a lot of people show up).

I could be tempted, though to live in a place maintenance-free. If I did, I could still garden as a volunteer Master Gardener.

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I would live in a one bedroom house as a single person. I spent a couple of weeks focused on conversion vans. Now I’ve moved into the world of tiny houses which of course have been around forever and I’ve dipped into it, but I could definitely live in the right tiny house. Again, as a single person.

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Originally Posted by catherine

The realtor who sold us our house here also lives in my town and became a good friend. She had a beautiful 10-acre plot with a home that she updated tastefully. Gorgeous house, but she has that personality where everything has to be perfect. Her dream was to only stay there a few years and then move into Manhattan. Her dream was slightly deferred, but sure enough, last year she gave signals that she was readying her home to list and show it.

She listed it in the summer 2025, and it sold by the end of the day for 1.2M. Here's the listing: https://www.zillow.com/homedetails/1...53318232_zpid/

She sold her cars and most of her furniture and moved into a 1BR place on the East Side. She is thrilled. I don't care how exciting NYC is, or how great it is not to have to mow 10 acres, I would NOT get a 1BR as a principal residence. And she paid probably close to a million for it. Different strokes. She is SO happy, constantly posting pictures of her and her dog at Centrl Park doggie meet-ups (it's amazing that the meetup is breed-specific, and a lot of people show up).

I could be tempted, though to live in a place maintenance-free. If I did, I could still garden as a volunteer Master Gardener.

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Your friend’s house is nice, but it’s too big for my taste, and it’s not intrinsically very interesting although it certainly is light and bright, and that view!!! That is certainly lovely.

I have a theory now that ideally, each person in the home as 600 square feet, so for the two of us, we would need 1200. We have lived in 800 and 1200 sq feet and I really felt okay in 1200, felt cramped in 800. So ideally, my son and dil and two children would have 2400 sq feet. They don't--I think they have about 1400, and it's a little tight. But this is just aspirational, of course.

I think my preferred amount of land would be 2 acres, as it is enough to do the things you want to do but now too much to care for. But we have too much woods now. I'd want two acres of clear land.

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Originally Posted by Tybee

I have a theory now that ideally, each person in the home as 600 square feet, so for the two of us, we would need 1200. We have lived in 800 and 1200 sq feet and I really felt okay in 1200, felt cramped in 800. So ideally, my son and dil and two children would have 2400 sq feet. They don't--I think they have about 1400, and it's a little tight. But this is just aspirational, of course.

I think my preferred amount of land would be 2 acres, as it is enough to do the things you want to do but now too much to care for. But we have too much woods now. I'd want two acres of clear land.

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As I scanhouse listings on Realtor.com, my eyes first look at the exterior of the place to see if it’s at all aesthetically acceptable, and the second point I look at is square footage. If I ever have to move, I do not want more than 1500 ft.². If it’s just me, I could go down quite a bit lower.

Our current house is 1800 ft.² some of it was designed for us and some of it was pre-determined by existing walls. Our public rooms are nice size, the bedrooms are small and the bathrooms are minuscule. I really like minuscule bathrooms, but I know a lot of people are going to hate them when we go to sell this place

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Originally Posted by iris lilies

As I scanhouse listings on Realtor.com, my eyes first look at the exterior of the place to see if it’s at all aesthetically acceptable, and the second point I look at is square footage. If I ever have to move, I do not want more than 1500 ft.². If it’s just me, I could go down quite a bit lower.

Our current house is 1800 ft.² some of it was designed for us and some of it was pre-determined by existing walls. Our public rooms are nice size, the bedrooms are small and the bathrooms are minuscule. I really like minuscule bathrooms, but I know a lot of people are going to hate them when we go to sell this place

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Yeah, man, I hate the comments on HGTV when prospective buyers walk into small bathrooms. My one bathroom is minuscule, also. We considered getting a walk-in shower, but we would have had to take out the clawfoot tub and there was no way that was going to happen. We made a walk-in shower outside, and so we have one five months of the year.

BTW, this link is the the one that my friend moved to in NYC. What do you think? Would you want to live there? https://www.realtor.com/realestatean...2_M45295-86240

I am enamored of small houses but they are very hard to find in more "desirable" areas for a price that makes sense. We have two of the dreaded "small" 5 x 8 bathrooms in this house so it may be hard to sell. I have just spent two weeks sharing my upstairs bathroom with DH while his was being reconstructed after a leak. It was an interesting experience trying to negotiate/share bathroom time for shaving, bathing, etc. in a very small space but back in the day even large families made do with one 5 x 8. It feels wonderful now that he has his own bathroom again.

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Originally Posted by Tybee

I have a theory now that ideally, each person in the home as 600 square feet, so for the two of us, we would need 1200. We have lived in 800 and 1200 sq feet and I really felt okay in 1200, felt cramped in 800. So ideally, my son and dil and two children would have 2400 sq feet. They don't--I think they have about 1400, and it's a little tight. But this is just aspirational, of course.

I think my preferred amount of land would be 2 acres, as it is enough to do the things you want to do but now too much to care for. But we have too much woods now. I'd want two acres of clear land.

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We have around 1400 sf, not including a screened in porch …. 2br, 2bath with 9 ft ceilings so it feels bigger. It is perfect for the two us. So, Tybee, I think your the theory is pretty close! If I were single, I think I’d want less. The lot is larger (1 1/2 lots) which is the only aspect I would change… too large. I’m in my minimalistic phase where less is best. No desire to have more to take care of.