- A new study reveals how the income needed to belong to the middle class has skyrocketed
- Maryland households need the most money to meet threshold
- Meanwhile, Mississippians need it the least, new graph shows
It’s an old question that’s sure to spark debate: What does it really take to be middle class in today’s America?
According to a new study from personal finance website GoBankingFeesThe answer has changed dramatically in the last decade.
Their analysis shows that the income needed to be considered middle class shot up almost $15,000, from $35,364 in 2012 to $50,099 in 2022, the most recent data available.
And findings can vary even more by state.
For example, Maryland households earn the most to be considered middle class. The income level to meet the threshold ranges from $65,641 to $196,922.
By comparison, Mississippi has the lowest salary: between $35,323 and $105,970.
Maryland households need the highest salary of any US state to be considered middle class. The income level to meet the threshold ranges from $65,641 to $196,922. Pictured: Baltimore, Maryland
The study defined the middle class as those with a household income that is two-thirds or twice the median income in each state.
Their data was obtained from the 2012, 2017, and 2022 American Community Surveys conducted by the U.S. Census Bureau.
The numbers suggest that Oregon, Washington and Colorado have seen their economic structure change most dramatically in the last decade.
The income range needed to be considered middle class increased more than 50 percent between 2012 and 2022.
The findings highlight how much living costs have skyrocketed.
But the real response is likely to be even greater in 2024, as red-hot inflation and the Federal Reserve’s aggressive interest rate hikes have hit households even harder.
The annual inflation rate, calculated based on the Consumer Price Index (CPI), reached 3.5 percent in March, down from a high of 9.1 percent in June 2022.
A separate NielsenIQ report recently found that inflation has eroded about a third of the purchasing power of $100 at the supermarket in five years.
In 2019, the sum would have bought shoppers a 32-item healthy bag complete with milk, eggs, cereal, dish soap and more.
However, today customers would have to remove at least 10 of those products from their basket to maintain the same budget.
By comparison, Mississippi has the lowest salary required to be considered middle class, with households required to earn between $35,323 and $105,970. Pictured: Jackson, Mississippi
An independent NielsenIQ report recently found that inflation has eroded about a third of the purchasing power of $100 at the supermarket in five years.
In response, the Federal Reserve has raised its funds rate to a 23-year high to control consumer spending and thus lower prices.
The Federal Reserve’s benchmark rate has a knock-on effect on credit cards, mortgages and personal loans.
But households have some respite from skyrocketing living costs in the form of higher wages.
Figures from the Bureau of Labor Statistics show that average U.S. wages rose 4.2 percent in the 12 months through March 2024.