For the love of all that is good, please stop referring to a family or individual making between $200,000 and $250,000 as part of the American "middle class." However you define "middle class" — and everyone has a different way of defining it — an upper limit of $250,000 makes no sense. Any way you slice it, anyone with an income over $200,000 is emphatically not a part of it.
The United States Census Bureau released its annual report on income and poverty in the U.S. Tuesday morning, which includes this doozy of a graph:
According to the U.S. Census Bureau, if a family of four had an annual income of $176,000 in 2012, it found itself in the 90th percentile of family income distribution in America. THE 90TH PERCENTILE.
That, my friends, is nowhere near the middle. And we're still dealing with sub-$200,000 numbers. It does a disservice to the other 90%-plus of American families to call one making $200,000 part of the middle class. The smack-dab median of family incomes is $66,000. Families right in the middle of American income distribution make roughly 38% of the income of the 90th percentile, and roughly one third of those making $200,000. It doesn't help that real incomes for those in the 95th percentile have increased more than $75,000 over the past 45 years, while real incomes for the 50th percentile have increased less than a paltry $9,000. Arguments that a family income of $200,000 is solidly part of the middle class hold no water whatsoever.
Part of the problem is how we define the middle class. Or, rather, the problem is no one knows how to define it. The $200,000 benchmark was employed by both President Barack Obama and last year's challenger Mitt Romney during the 2012 presidential election, and plenty pointed out an income that large would put a family in the top 4% of Americans. It doesn't make sense to have a middle class that covers 96% of America. That, by definition, isn't "middle." It's practically the whole.
Maybe it's incorrect to use "middle class" as a blanket statement for the entire nation. There are, after all, a variety of factors at play, most notably cost of living expenses. When adjusting for cost of living, an annual salary of $65,000 in Rochester, New York would be equivalent to a salary of roughly $85,000 in Nassau County, New York — that's a pretty hefty premium. Sometimes it just costs more to live where you live. And perhaps it's unfair to peg a family as "middle class" or not based on their location.
But at the end of the day, income remains the determining factor. Even if a family making $200,000 spends the same percentage of income on food as a family making $50,000 simply because food costs more where they live, they're still making $200,000. They're an upper-class family living in an upper-class area with upper-class costs. How the family making $200,000 spends its income is irrelevant. They're making three times as much as the median income family, and their income is going up faster (or going down slower, depending how you look at it).
It is a futile effort to attempt to nail down a concise definition of the "American middle class." There isn't really one way to define what the middle class is, or who is in it. But it's remarkably easier to define what the middle class isn't, and who is not a part of it. A family or individual making more than 90% of the rest of the country — that isn't someone in the middle class. For some reason the $200,000 benchmark haunts us. It lingers there, in the background of our economic policy, for god knows what reason. It's inaccurate, and insulting to a large portion of the American population. So let's do away with it, please?