- Middle-class America isn’t faring that well, according to several results from an INSIDER and Morning Consult survey.
- Middle-class Americans are behind on homeownership and retirement savings, partly because they have debt to pay off.
- Even some of those making six figures identify as middle-class rather than affluent.
- These findings reflect a shrinking middle class and a higher cost of living.
- Visit Business Insider’s homepage for more stories.
Middle-class America is changing.
A recent survey by INSIDER and Morning Consult of 4,400 Americans asked respondents to define their financial situations as “poor,” “working class,” “middle class,” “upper middle class,” “affluent,” or “don’t know.”
The results, in conjunction with other answers related to demographics and financial behaviors, indicated a shifting landscape in terms of socioeconomic status.
The middle class in particular carries several financial burdens – middle-class Americans are behind on homeownership and lagging behind in saving for retirement, and they have debt to pay off.
Most striking, though, is that many respondents identified with a class that didn't necessarily align with their income level or their socioeconomic background. For example, many of those earning six figures or who said they grew up affluent defined themselves as middle-class.
People identifying as a station lower than their backgrounds underscores previous studies that found a shrinking middle class and a higher cost of living.
Six key findings from the survey show the state of America's middle class today.
Nearly half of Americans earning $100,000 or more think they're middle-class.
Nearly 42% of those earning $100,000 or more said they're middle-class. About 36% of them said they're upper-middle-class, and only 6% of those respondents said they're affluent.
Of the respondents who identified as affluent, 17% said they earned less than $50,000, nearly half said they earned $100,000 or more, and about 34% said they earned between $50,000 and $100,000.
But the class with the biggest difference in income levels was the self-identified middle class - 36% said they earned less than $50,000, 18% said they earned $100,000 or more, and about 50% said they earned $50,000 to $100,000.
Class and wealth aren't the same, and both are relative - some people can earn less and still feel rich, while others can earn more and feel that they're struggling financially.
But these findings are also indicative of a shrinking middle class. According to the Pew Research Center, the size of middle-class America decreased by 9 percentage points from 1971 to 2016. And from 2010 to 2016, their wealth didn't increase at the rate of the upper class, widening the income gap between the two groups.
One-third of millennials earning at least $100,000 a year consider themselves middle-class.
About 38% of millennials earning $100,000 a year or more think they're middle-class, the survey found.
Of the respondents who answered the question, less than half who earn $100,000 or more said they considered themselves rich: About 23% of them said they're upper-middle-class, and nearly 6% said they're affluent.
About a quarter of those earning $100,000 a year or more consider themselves below middle-class: Nearly 7% said they're poor, and almost 20% said they're working-class.
The middle class is particularly squeezing millennials out, Richard Partington reported for The Guardian last month, citing the Organization for Economic Cooperation and Development.
A six-figure salary may no longer be what it once was. While millennials have benefited from a 67% rise in wages since 1970, according to research by Student Loan Hero, this increase hasn't kept up with inflating living costs: Rent, home prices, and college tuition have all increased faster than incomes in the US.
Less than half of city dwellers consider themselves middle-class.
Only 37% of city dwellers consider themselves middle-class or upper-middle-class, while more than half consider themselves poor or working-class.
In contrast, more than half of those living in suburban areas think they're middle-class or upper-middle-class. About 14% said they're poor, and roughly 27% said they're working-class.
City dwellers tend to be younger and earn less and are more likely to have student loans. They're also likely to have tighter budgets because of a higher cost of living - something that has hit the middle class particularly hard in cities like Sacramento and Houston, according to GoBankingRates.
Urban residents may also be more inclined to feel as if they're not part of the middle class because many don't own a home - nearly half are renters, compared with a little more than a quarter of suburban residents, the survey found.
More than half of Americans who grew up rich don't think they're wealthy anymore.
Of those who responded, about 36% who said they grew up affluent think they're still affluent today.
Nearly 60% of those who said they grew up affluent now consider themselves to be in a lower class - about half of this group said they're middle-class or upper-middle-class, while the other half said they're poor or working-class.
But it's not just those born into wealth who now identify with a lower class. A good chunk of respondents who said they grew up in the middle-class tiers do as well.
Nearly 60% of those who said they had an upper-middle-class upbringing identified with a lower class - half of this group said they're middle-class, while the remaining half said they're poor or working-class.
And while half of those who said they grew up in the middle class said they're still in it today, more than one-third identified with a lower class. Only about 12% said they're now part of a higher class.
The middle class is behind on homeownership and retirement savings.
The middle class has more non-mortgage debt than upper classes, the survey found.
About 62% of the middle class has credit-card debt, compared with roughly half of the affluent.
The middle class also has more student-loan debt - nearly half have student loans, compared with 39% of the affluent. Of those who have taken out student loans, more of the middle class than the affluent are still working on paying them off.
Having more student-loan and credit-card debt to pay off makes it harder to save, which may place homeownership further away for people in the middle class, more of whom are still renting, compared with the affluent.
It may also be why the middle class isn't as well prepared for retirement as the affluent, more of whom expect to retire at an earlier age than the middle class. That might be because more are saving for retirement - 80% of the affluent respondents said they had a retirement account, versus 63% of the middle-class respondents.
The middle class is most likely to save an extra $1,000.
When asked how respondents would spend a hypothetical $1,000, the self-identified poor and working-class respondents were most likely to choose to pay off debt. The middle-class respondents were most likely to choose to save, and the affluent respondents were most likely to choose to invest.
The self-identified middle-class respondents' desire to save reflects the findings of previous studies, according to Business Insider's Tanza Loudenback. A report from the Urban Institute found that one-third of middle-class Americans, defined as a family of three earning between $40,840 and $81,680, felt financially insecure in 2017.
