Maine news, sports, weather from Portland Press Herald / Maine Sunday Telegram, Portland, Maine

July 19, 2012

Undefined 'middle class' expanding

With no firm standard at hand, the middle class is becoming whatever a politician wants it to be.

By HOPE YEN The Associated Press

In a recent speech, President Barack Obama referred to the "middle class" 14 times, defining it as a family that makes up to $250,000 a year. Republican challenger Mitt Romney has looked at it from the other direction, saying that someone who falls into poverty "is still middle class."

In the fuzzy labels and loose speech of this political season, "middle class" has ballooned to cover just about everyone. So what does the term really mean?

There's no official definition.

If anything, a slew of economic data suggests a middle class that's actually shrinking. Mid-wage manufacturing and other jobs are disappearing due to automation and outsourcing, while lower-income positions and poverty spike higher. The White House's chief economist, Alan Krueger, said in January that the middle class fell from 50 percent of U.S. households in 1970 to 42 percent in 2010, as more families moved to the extreme ends of income distribution.

But it's not just about economic ranges. And politicians are not bound by such gauges anyway.

"Politicians love to use the term, because it's vague and connotes an image of regular American people." said Dennis Gilbert, a sociology professor at Hamilton College and author of "The American Class Structure in an Age of Growing Inequality." He said, the varying uses of "middle class" on the campaign trail are "dishonest, and it's absurd."

In recent months, the phrase has been popping up with increased frequency. Referring to the election as a "make-or-break" moment for the middle class, Obama used the term repeatedly in his July 9 speech calling for an extension of "middle-class" tax breaks for families making less than $250,000, or $200,000 for individuals - basically everyone but the top 2 percent. He mentioned the phrase seven times at a fundraiser Tuesday in San Antonio.

Romney has suggested that the upper bounds of the middle class include families earning $200,000. He's pushing an extension of the Bush-era tax cuts for everyone, including the wealthiest 2 percent. Romney's campaign seeks to highlight a weak economy that he says is a "kick in the gut to the middle class," with a new video this week attacking what he calls an Obama record of "political payoffs and middle-class layoffs."

The meaning of "middle class" has grown even harder to parse following a populist Occupy movement that for months protested high unemployment and income inequality with a rallying cry of "We are the 99 percent."

Formal definitions vary, but few academics would say it covers more than 60 percent of Americans.

When it comes to earnings, the Census Bureau divides household income into quintiles, or groups of 20 percent. Some economists narrowly define the middle class as those in the middle 20 percent of the distribution, earning between $38,000 and $61,000. Others define it more broadly to include the middle 60 percent of the income distribution, between $20,000 and $100,000.

Defining who is poor, by contrast, is officially more absolute. The federal poverty line is based on the minimum income needed to have what the government considers a basic standard of living. Two times the poverty line is often a cutoff for "low-income" families who may be eligible for government aid. The poverty line currently is $22,314 for a family of four.

Yet another way to gauge class is what income tax bracket you're in. The IRS has six of them. This year, the bottom bracket sets a tax rate of 10 percent for taxable income up to $17,400 for couples. The top bracket is 35 percent, applied to taxable income above $388,350. The middle class is commonly seen as falling in the 15 and 25 percent brackets, or couples whose taxable income is between $17,400 and $142,700.

(Continued on page 2)

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