The Haves, Have Nots, & Have Lots - Reformulation of the Middle Class

[Aloysius]

Was chatting with Joker about an interesting presentation my team got at work (I work for a TV Network) - it was, in broadstrokes, a look at socio-economic class dynamics, how it's changed through the years, and how that might impact marketing and content messages.

One of the takeaways had to do with "marketing to the middle class". The presenters noted that the anxieties, concerns, fears, mentality of the "Have Nots" (let's say households <$50k) were strikingly similar to the "Haves" (households >$80k but <$150k).

One driver of this phenomenon is the increase in wealth in the top 1% of the country over the past 20 years (which is now at like 18% or so IIRC now, very similar to the turn of the 20th century, compare this to the 1950s, where the Top 1% was at like 12% of the nation's wealth).

The difference today, vs. 100 years ago, with elite wealth perception and desire / envy is the very public face of this 1%. We are inundated by them.

Basically, "middle-class" as a destination is a long dead idea, and the only preferred destination is "upper class", or Have Lots.

Thought this might be an interesting concept to discuss - some questions maybe to help kick it off:

1) Are you a Have Not, Have, Have Lots?
2) How important is this to you going-forward?
3) Will this impact your decision to have a family, number of children?
4) Is your sense of what I wrote above true? Is this true only in expensive metropolitan areas?

-Al

[NajdorfDefense]

Disagree with premise, only true in expensive cities.

The rich got poorer and made less during 2001-2004, and the average, poor, and middle-class Americans all made more money.

NYTimes, Feb 24, 2006:
"The savings of people at the top 10 percent of the income scale declined by 6 percent, ...their income, on average, fell by about the same proportion. (Meanwhile, the typical American's income rose by 1.6%.)"

Top 10% average income fell by 6.297% according to the FRB survey of Consumer finances.

The poorest 20% made 1.8% more over that time frame.

All numbers are real, that is, inflation-adjusted.

In Manhattan, 2 people can not live easily on $150k, much less an entire family.

[ QUOTE ]
the only preferred destination is "upper class", or Have Lots.


[/ QUOTE ]

I don't know anyone who doesn't aspire to be rich someday, if only to give it all away.

[Aloysius]

[ QUOTE ]
The rich got poorer and made less during 2001-2004, and the average, poor, and middle-class Americans all made more money.

[/ QUOTE ]

Right - but not sure how that rebuts the premise - that the concerns / mentality / outlook of "Haves" are similar to "Have Nots" (also bear in mind this was a fairly "fuzzy" study, heh marketing you know, not numbers guys - though they did a lot of consumer polling / research etc.).

[ QUOTE ]
I don't know anyone who doesn't aspire to be rich someday, if only to give it all away.

[/ QUOTE ]

Also true - but at some point in this country's history, aspiring to and achieving a middle-class lifestyle was both acceptable and a goal for people. Not so anymore, is the contention of the study. That we're increasingly becoming a country of Have Lots and everyone else.

How far does $100k household income for a family in Ohio with 3 kids get you?

-Al

[econophile]

I read this wiki article yesterday: affluence in the United States

It's interesting, relevant, and has references to many sources of detailed information.

edit: btw, i am amazed that 20% of american household earn $18,500 or less per year.

[Aloysius]

[ QUOTE ]
edit: btw, i am amazed that 20% of american household earn $18,500 or less per year.

[/ QUOTE ]

That is sick.

So the Top 10% HH earn >$118k... to me it does sound like the "middle class" is being drastically redefined.

I am not an economist and don't study this, but it does make sense to me that, well, 90% of the country is stressed on some level about their finances - and one can see how a middle class anxiety or mindset is very pervasive in this country.

The presentation I cited in the OP was much more about the consumer mindset than anything else - good to get some facts in here, thanks Econo.

-Al

[NajdorfDefense]

[ QUOTE ]

edit: btw, i am amazed that 20% of american household earn $18,500 or less per year.

[/ QUOTE ]

Why? Isn't the average househould now $44k or so?

Naj

[Dids]

1) Are you a Have Not, Have, Have Lots?

I guess I feel like a "have" if you removed the $ amount from that. I've got a decent life relative to poor folks, but I'm technically a "have not". I've got cool toys (thanks poker!), a nice place to live, nice-ish car, etc. Of course, I also have a ton of consumer debt as well...

2) How important is this to you going-forward?

Not very. I've never HAD to have cool new toys. I grew up reasonably poor (although thanks to my folks, was never really aware of that until that changed). I would want to maintain my currentl lifestyle, which does impact some choices I might make career wise.

3) Will this impact your decision to have a family, number of children?

It shouldn't. Although I couldn't really afford to have kids etc if my wife didn't work.

4) Is your sense of what I wrote above true? Is this true only in expensive metropolitan areas?

I think middle class still very much exists. I feel like that's exactly where I fall. Is that something that's considered ideal, or ok? Not by most, but I'm ok with that.

[Los Feliz Slim]

1) Are you a Have Not, Have, Have Lots?

Have lots, but I am obsessed with having lots and lots and lots. Living in LA has much to do with this, but I have a feeling that I cannot shake that I will never feel financially secure until I have so much money I don't know what to do with it all.

2) How important is this to you going-forward?

Very important. Dominates my thoughts. Every time I see a Bentley I think "What the [censored] is the matter with me?"

3) Will this impact your decision to have a family, number of children?

Absolutely. I already have one child, and won't have more until I have more money. Biggest reason is I want a 4+ bedroom house, and to do that in a neighborhood I like in LA is at least a $2 million proposition.

4) Is your sense of what I wrote above true? Is this true only in expensive metropolitan areas?

It's certainly true for me.

[7ontheline]

1) Are you a Have Not, Have, Have Lots?

Just below Have Lots - soon will be a Have Lots after I start practice this summer (ophthalmology). That said, starting salary is only 135k, so once wife stops working or cuts back severely to finish her MBA things will be tighter.

2) How important is this to you going-forward?

Very important. Dominates my thoughts. (Just copying LFS here, since I agree.) Although I don't see too many Bentleys in Chicago. I guess I stare in drooling desire at all the nice houses in Chicago.

3) Will this impact your decision to have a family, number of children?

Definitely. My wife and I want to have kids that we can support to the fullest extent possible - not going to happen for a little while with me just starting out and her finishing school. Then it's not like she can take maternity time off right after school, so it could be delayed further.

4) Is your sense of what I wrote above true? Is this true only in expensive metropolitan areas?

Also true for me, here in Chicago. If we were to live off only my salary, we would be ok but not have much extra cash. The 200k medical school debt is just crushing.

I kinda like the demographics threads here in EDF - feels like I get to know a group of posters that I find interesting.

[mmbt0ne]

1) Are you a Have Not, Have, Have Lots?
Right above a Have Not, but since I live by myself and in one of the cheaper urban areas I'm pretty comfortable.

2) How important is this to you going-forward?
I certainly want to be a Have Lots, but not in the sense of buying $300k cars. Apparently I grew old and lame in the last 3 years because luxuries like that don't really appeal to me any more.

I still worry about money constantly though, despite the fact that I'm in no danger of starving, or losing anything. I just really really really want to get rid of debt so I can start stashing money.

3) Will this impact your decision to have a family, number of children?

Nah. My gf's going med school, so no babies soon and I don't see myself settling down soon with anybody else assuming something suddenly goes wrong. She'll make the cash we need by the time a family is in issue.

4) Is your sense of what I wrote above true? Is this true only in expensive metropolitan areas?

I think that companies have gotten MUCH better lately about creating demand. We have become very caught up on measuring ourselves by possessions and constantly wanting new things not because what we have is broken, or even out of date/style, just because it's not what's new.