A couple of interesting articles caught my eye this week on the subject of what constitutes a livable income. One is entitled "America’s Feast-or-Famine Reality: When $100,000 Feels Like Poverty," and it's an analysis of a more in-depth discussion called "My Life Is a Lie" by Michael W. Green, which breaks down the "real" definition of America's middle class. (For the second article, skip the top section and scroll down to the heading "How a Broken Benchmark Quietly Broke America." That's where the interesting stuff begins.)
Apparently the definition of poverty in America is wildly outdated; and as a result, so is what defines the middle class. Using "conservative, national-average data," Green argues that a family of four (two working parents, two kids) must earn a minimum of $136,500 per year to qualify as middle class. This is the financial breakdown (read the article for the explanations):
• Childcare: $32,773
• Housing: $23,267
• Food: $14,717
• Transportation: $14,828
• Healthcare: $10,567
• Other essentials: $21,857
• Required net income: $118,009
• Add federal, state, and FICA taxes of roughly $18,500, and you arrive at a required gross income of $136,500.
Phew.
I would imagine there are vast discrepancies between urban and rural costs for these categories, but they still seems crazy-expensive.
Since the vast majority of us don't make anywhere near $136,500 per year, the author makes some very compelling arguments for why those in true poverty (at or below $35,000/year) do better – because of government assistance programs – than those whose income exceeds the poverty threshold but doesn't reach "middle class" levels. Green terms this position the "Valley of Death" because it's so hard to escape or get ahead.
I strongly urge you to read the entire article – actually, both articles – and share where you fall on this financial spectrum.
No comments:
Post a Comment