Wall Street Journal says more households move into upper middle class

[iris lilies]

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.

[iris lilies]

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

[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.

[Alan]

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.

Tripled? In just 6 years? Wow!

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

[Tybee]

Tripled? In just 6 years? Wow!

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

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.

[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.

[iris lilies]

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?

[iris lilies]

Tripled? In just 6 years? Wow!

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

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.

[catherine]

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?

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.

[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