The power of six-figure (or higher) salaries, depending on where you live, appears to be waning, pushing some American earners into “lower middle class” status.
“The bar to be considered ‘middle class’ has certainly risen in America’s most expensive cities,” Andrew Murray, lead content data researcher at GOBankingRates, told FOX News Digital. “To break out of the lower middle class, you need to earn $150,000, which is significantly more than you were used to.”
A recent study found that in some expensive cities, an annual income of $150,000 is economically marginal and falls into the category of “lower middle class” income. Analytics from GOBankingRates.
Topping the list are Northern California and Virginia, which have a maximum lower middle class income range of $128,964 to $152,652, making them among the top five most expensive cities.
In descending order, the cities with the highest incomes to be considered “lower middle class” are: Arlington, VA, Arlington, VA, Arlington, VA. San Francisco; San Jose, California. Irvine, California. Seattle; Gilbert, Arizona; Plano, Texas. Scottsdale, Arizona. Washington, DC; and Chandler, Arizona.
“Just to break out of the lower middle class in the top 15 cities, you need to make six figures or more, as much as $150,000. These high income requirements push many Americans to look for more affordable options. You may feel safer choosing to live in a city, especially one where the average income is around $75,000,” Murray explained.
GOBankingRates noted in its analysis that the top 25 cities have higher housing, childcare, and transportation costs compared to the national average. According to data analysts, housing and real estate costs can have the biggest impact on affordability and wealth.
“Eight of the top 25 cities are in Virginia, Washington, and Arizona. Virginia and Washington generally have higher costs of living, but all of the cities on the list had very high median household incomes,” Murray said. he pointed out.
“Most notable is Arlington, Virginia, a suburb of Washington, D.C., which has the highest median household income in the entire study, at about $140,000,” he added. “Seattle and Gilbert, on the other hand, both have median household incomes above $115,000. It’s notable that her three Arizona cities in the top 25 are all in the Phoenix metropolitan area. Masu.”
California dominated the list due to its impact on housing, taking seven of the top 25 spots.
“It’s no secret that California has the highest housing costs in the nation. According to the Bureau of Labor Statistics, Californians can expect to pay an average of nearly $30,000 a year in housing costs,” Murray noted.
“This means that anyone who wants to live comfortably in California needs to be a high-income earner, and that is reflected in our findings. “The three ranked California cities, San Francisco, San Jose, and Irvine, each have median household incomes above $120,000,” he continued. “That’s nearly $50,000 higher than the national median income.”
U.S. Census data reports that the median household income in 2022 was just under $75,000, and Murray said the study supports the argument that being “wealthy” is related to where you live. We have explained in detail how to join.
“Our findings show that the income that qualifies as lower middle class in San Francisco ($152,652) is nearly four times the income that qualifies as lower middle class in Cleveland ($41,412),” he said. said. “In another recent analysis, GOBankingRates found that the income required to be ‘rich’ (top 5%) in Massachusetts is more than $200,000 higher than in Mississippi.”
Regarding the most important takeaway from the study, Murray highlighted that income expectations have increased significantly in these expensive cities.
“In 15 cities, a six-figure income is no longer enough to get you out of the lower middle class. In three cities, even a $150,000 income is no longer enough,” he said. “It’s important for potential home buyers to consider these income differences when deciding where to move.”
