November 7, 2012
Vol: 19 No: 45

Director's Corner

What economic class are you?

by: Alan Preston , Managing Director

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If someone asked you, “What economic class are you?” what would you say? Invariably, when I lead a workshop about class in America, almost everyone initially identifies as middle class. Those who grew up poor usually describe their experience as “lower-middle class,” and those who grew up wealthy invariably use “upper-middle class.” But it’s all an association with the middle class. On both ends of the economic spectrum, people want to avoid the stigmas attached to being “poor” or “wealthy.”

Empirical research supports my experience. In a July 2012 survey by the Pew Charitable Trusts, 89 percent of respondents identified as lower- middle class, middle class or upper-middle class. Aside from this being a mathematical impossibility, it’s a clear indication Americans don’t have an accurate perception of class. It’s also ironic that the vast majority of Americans continue to identify as middle class while economists show the middle class is rapidly disappearing.

Our political leaders perpetuate and exploit this disconnection. Seeking to include as many people as possible in grand promises of returning middle-class prosperity, Romney, Obama and their counterparts have expanded the definition of middle class to extend from households with incomes of more than twice the federal poverty line (about $30,000 for a family of four) to those with incomes of up to $250,000 per year. Really? We live in a society where households with nearly 10 times the income of others can occupy the same class? By creating such a broad definition of middle class, politicians can avoid responding to poor voters or challenging wealthy voters. And the populace, because of stigma and self-interest, plays along.

The problem isn’t only that many high-income earners take cover as middle class. It’s that as a society, we’ve bought into a reductionist definition of class that focuses on income. We pay little attention to sociologists who frame class in terms of cultures and values, and we rarely acknowledge wealth or power as the critical drivers of class privilege.

Income is what you earn. Wealth is what you own (minus what you owe). On the basis of my income at Real Change, my family is “middle class.” Yet I own property and have assets that provide me and my family with investment income and a safety net. There are many people whose economic prosperity is based on wealth, not income.

At the other end of the spectrum reside scores of people, including many people of color, without any real wealth, who have risen into the middle class on the basis of income. They have no safety net and often have a negative net worth due to the debt they carry. So when the economy collapses, as it did in 2008, they lose their jobs and free-fall into poverty. Many Real Change vendors face this danger.

It’s time to change the conversation about class. We can reject that someone who earns $250,000 is middle class. Hell, only 2 percent of Americans earn more than that. But it’s also important to take the next step and distinguish between income and wealth. While poor people (and people of color) have made some progress in the past few decades in terms of income, the racial wealth divide is still stark. Generations of structural discrimination, anchored by public policies such as the Homestead Act, the gi Bill and fha homeownership programs have created a legacy of intergenerational wealth accumulation among more privilged white Americans; it has also led to economic insecurity and vulnerability among poor people and those living in communities of color. Until that’s part of the discourse, we’re not having honest conversations.

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