Middle Class Income Range

Vital Factors That Determine the Income Range of the Middle Class

The middle class forms an important section of society, as it makes a substantial contribution in the growth of the GDP. The aim of this article is to explain what the range of income of the middle class is, and also the factors determining it.
The American Heritage Dictionary defines the term middle class as, The socioeconomic class between the working class and the upper class, usually including professionals, highly skilled laborers, and lower and middle management. Calculating the middle class income range is indeed a very tedious task. However, at the same time, it is extremely essential, as the growing middle class symbolizes prosperity and economic growth. The income range of the middle class varies from one place to another. So, the factors determining the income range of a particular place should be taken into consideration. Discussed below are some of these very factors.

Income Range of Middle Class People

Middle class income is believed to be between US $20,000/US $25,000 to $65,000/1,00,000 per year approximately, as per studies conducted by various institutions and economists. In some of the expensive cities, people earning up to $70,000 per year would also be included in the middle class bracket.

Upper Middle Class
  • The upper middle class usually consists of people having substantial assets and household earnings which are more than US $100,000 per year.
  • People in this class occupy considerably higher positions in their offices and are financially more stable than many people in the country.
  • These are the people who see a considerable rise in their incomes due to rapid economic growth of the nation.
  • They have higher disposable incomes than many of their fellow countrymen.
Lower Middle Class
  • The lower middle class, on the other hand, consists of people who have basic educational qualifications and have an income between US $30,000 to US $60,000 per year.
  • This class consists of a large part of the total population of a country.
  • The lower middle class struggles to get to the level of the upper middle class, which in turn aims at entering the rich or elite class.
Factors Affecting the Income of the Middle Class

A person living in a particular city is said to be in the 'middle class' bracket if his income fits into a range created by economists on studying the economic characteristics of the city. This implies that the income would be higher in the highly developed and advanced cities as compared to the lesser developed cities and rural areas. This is because the cost incurred on living and meeting basic needs is much higher in the developed cities than the underdeveloped ones. A person residing in a metropolitan city would have to spend a substantial amount of his income on home rent, transport, health care facilities, entertainment, etc. For instance, the income would be higher in expensive cities like New York and Los Angeles.

Another factor that plays an important part is how big a person's family is. Whether a person would fall in the middle class category also depends on the size of his family. If a person is the only bread-earner in his family, he would have to adjust his expenses according to the needs and necessities of his family members, depending upon the amount he is earning. Naturally, if it is a family of two people, the comfort level with respect to the earnings and expenses would be more, in comparison to a bigger family of say four or more people. Furthermore, a person earning a given sum of money and having a small family might fall into a higher middle class category when compared to another person who is also earning the same amount of money but having a bigger family. Such a person might fall under the lower middle class category.

The income range has seen a slow but steady rise in many countries of the world due to increased job opportunities. Asian countries like India and China have a middle class which is growing at a fast pace, and adding to the growth of these countries. High incomes help governments collect more taxes and utilize this money for infrastructure development and public welfare. Middle class is therefore an important constituent of a socioeconomic setup.