Are you a part of the middle class?
In San Luis Obispo County in 2017, the income range it took to be considered “middle income” was wider than at any other point in recent history — but the percentage of local households that fall into that income bracket is smaller than decades past, according to data from the United States Census Bureau.
Essentially, the middle class is shrinking in size, even though the parameters are larger than ever.
Before we get into what this means for San Luis Obispo County, let’s first define what exactly middle class is.
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By the numbers
There are a lot of different definitions. For many, it’s a social label, denoting things like education and perceived financial stability. For others it can also point to an old-fashioned idea of the American dream: a modest home, two kids, two cars in the garage and so forth.
There is an economic definition; the Pew Research Center uses “middle class” the same as “middle income,” defining it as the income range between 67 percent and 200 percent of the median household income for a region, adjusted for household size.
In San Luis Obispo County, this means households earning between about $48,000 and $144,000 are situated solidly in the middle class.
This assumes a household size of three people, the national average — smaller households would require less to count as middle class, and larger require more.
According to Pew’s calculations, about 56 percent of adults in San Luis Obispo County were in the middle class in 2016. Twenty-one percent were in an upper income tier and 23 percent in the lower tier.
The percentage of adults in the upper and middle class in San Luis Obispo County are both higher than the national percentages. Nationally, about 52 percent of adults count as middle income, and 19 percent as high income.
In new numbers released by the U.S. Census Bureau in September, the percentage of local households fitting into the middle class bracket in 2017 was roughly 52 percent, up slightly from 51 percent in 2016.
A shrinking middle class
The size of the local middle class fluctuates each year, but in recent years it has been significantly smaller as the area suffered the effects of the 2008 recession and its aftermath.
The size of the middle class hit a modern low in 2011, when only 47 of households fit within the definition of middle income. That year also saw the largest percentage of households in the lower-income tier in recent years, with about 39 percent falling below the middle.
In recent years, the percentage of households in the upper income bracket has also fluctuated.
In 2007, the percentage of households that could be described as high income dropped from 19.5 percent to 16 percent. The percentage of high-income households stayed between 13 and 14 percent through 2011, before steadily increasing to a high of 21 percent in 2016.
In 2017, upper-income households counted for roughly 16 percent of the population
Though it’s mostly stabilized to its pre-recession numbers, the middle class of the millennium is smaller than decades past.
In 1980, the first year in which the census started tracking household income as opposed to family income, the median income was $14,805. (Household income relates all people in a housing unit, regardless of relationship.)
This meant households earning between $9,900 and $29,610 qualified as middle class in 1980. According to census data from that year, roughly 57 percent of households fit that description.
In 1990, the percentage of middle-class households in San Luis Obispo County was about 69 percent.
For most of the 2000s, however, the percentage of middle-class households has hovered around the 50 percent mark.
How does SLO County compare?
San Luis Obispo County’s median income in 2017 was $71,880 — roughly comparable to that of its neighbors, Santa Barbara and Monterey counties.
However, it vastly outpaced the median incomes of Kern, Kings and Fresno counties, which ranged between $49,000 and $58,000.
The size of San Luis Obispo County’s middle class was also smack dab in the middle. At roughly 52 percent, it was neither the largest middle class in the region — that distinction goes to Monterey County with 55 percent of its households being middle income — nor the smallest. That was Fresno County, where the middle class in 2017 comprised roughly 42 percent.
All of this fits with a larger trend in the country toward a slightly smaller middle class than in decades past.
According to a report by the Pew Research Center, the American middle class has shrunk from its height in the 1970s, when 61 percent of adults were considered in the middle class. In recent years, that has stabilized to between 51 and 52 percent.
Of the country’s major metropolitan statistical areas, Sheboygan, Wisconsin, had the largest middle class in 2016 with 65 percent of adults living in middle-income households, according to the Pew analysis. Laredo, Texas, had the smallest, with only 39 percent of adults in middle-income households.
Notably, the Pew analysis revealed that the highest concentrations of middle-class adults tended to be in the Midwest or Northeast — areas that are more reliant on manufacturing than the rest of the country — while California and the Northeast led for the largest shares of adults in upper-income households.
Pew’s analysis indicated that, although the national middle class seems to have stabilized in recent years, income disparity around the country could continue to grow.
In fact, in 2016, the wealth gap between upper-income families and lower- and middle-income families was at the highest level ever recorded, the Pew Center said in its report.
”Although the wealth of upper-income families has more than recovered from the losses experienced during the Great Recession, the wealth of lower- and middle-income families in 2016 was comparable to 1989 levels,” the group wrote. “Thus, even as the American middle class appears not to be shrinking (for now), it continues to fall further behind upper-income households financially, mirroring the long-running rise in income inequality in the U.S. overall.”
Wondering whether your household qualifies as middle class? Check out the Pew Center’s interactive calculator at http://www.pewresearch.org/fact-tank/2018/09/06/are-you-in-the-american-middle-class/.
Do you count yourself among the San Luis Obispo County middle class? Reporter Kaytlyn Leslie wants to talk to you — email your story to firstname.lastname@example.org and help her reveal what exactly being middle class in San Luis Obispo County means.