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Who Speaks For the Suffering Upper Middle Class?

New data suggest these high income earners are living paycheck to paycheck, have fewer assets, and can't retire.

It seems fatuous to argue, especially in a healthy economy, that the upper middle class faces overwhelming financial insecurities. After all, U.S. stocks have entered the longest bull market ever recorded, the labor force has markedly improved, and small business optimism is at a level unseen since the early 1980s. It appears that happy days are here again. But this halcyon period—marked by invigorating statistics—still hasn’t prevented even upper-middle-class Americans from feeling discontent. For countless families, especially in thriving metro regions, a six-figure salary fails to deliver economic security. Their sense of vulnerability is real, not imagined.

What defines the upper middle class? According to the Pew Research Center, middle-class households, as of 2010, had incomes ranging from $35,294 to $105,881. In 2016, U.S. Census Bureau data showed that the median household income was $59,039. Based on Census findings from that year, the highest earning households—before the top 5 percent ($224,251 and upward)—ranged from $74,878 to $121,018. Reviewing these findings, a household income ranging anywhere from $75,000 to $200,000 could fall under the upper-middle class.

A six-figure income should bring long-term stability. But members of the upper-middle class find themselves prisoners of voluntary yet inescapable costs. A multi-generational phenomenon has unfolded, its roots traceable to the economic slowdown of the early 2000s and the subsequent Great Recession. There is a feeling of anxiety among Baby Boomers who cannot retire, Gen. Xers saddled with expensive mortgages and child care costs, and Millennials paralyzed by insurmountable student debt. Data cannot measure emotion. The sense of unease is palpable despite the economy’s booming conditions.  

A helpful cultural reference point is HBO’s Divorce, which concluded its second season earlier this year. The comedy-drama focuses on the angst and dysfunction of a middle-aged divorced couple in Hastings-on-Hudson, an idyllic town in New York’s prosperous Westchester County. Frances DuFresne, played by Sarah Jessica Parker, quits her day job in the city to open an art gallery. Her ex-husband, played by Thomas Hayden Church, is a former Wall Street executive now struggling as a contractor. The estranged couple, raising two children, are undeniably upper-middle class. Their professional background, cultural tastes, and suburban lifestyle personify affluence. But their financial insecurity, mainly the result of career choices, remains a theme throughout the series. The DuFresnes’ social circles remind them that their economic position, while favorable, is vulnerable compared to the higher earners inhabiting their bucolic suburb.

The characters portrayed in Divorce exemplify a modern reality: many upper-middle-class households are high earning but asset poor. In 2015, Quartz’s Allison Schrager illustrated how “America’s upper middle class have almost no emergency cushion and are woefully unprepared for retirement.” Reviewing Federal Reserve data, Schrager showed the precarious financial position of upper-middle-class individuals aged 40 to 55 with household incomes ranging from $50,000 to $100,000. The data indicated that this income bracket had fewer assets than ever (assets exclude a house, car, or business, but include retirement funds). As Schrager noted, even a high earner who worked for many years typically had only $70,000 in financial assets. Approximately 25 percent of upper-middle-class 40- to 55-year-olds, meanwhile, had less than $17,500 in financial assets.

Such findings suggest that seemingly high earners are living paycheck-to-paycheck. While Federal Reserve data has since found that median family income grew 10 percent between 2013 and 2016, a disproportionate number of upper-income Americans still cannot retire. In addition to their own financial woes, they must support their elderly parents, which involves innumerable costs. Overwhelming debt has become a vicious trap.

In one Brookings Institution study, researchers reported that nearly one quarter of households earning $100,000 to $150,000 a year claim to be unable to pull together $2,000 in a month to pay bills. Sustained economic growth has not repaired this cycle of debt. According to Deutsche Bank economist Torsten Slok, Americans have more debt than cash than at any time since 1962. The 2018 Northwestern Mutual Planning and Progress Study found that the average American’s personal debt (independent of home mortgages) now exceeds $38,000. Stock market growth and rising home prices have not altered this trend.

In a Washington Post report last year, Todd C. Frankel demonstrated how modern life adds up for an upper-middle class family. Frankel reported on a couple in suburban Atlanta with a combined income of $180,000, an indisputably high earning level. But financial uncertainty rises from a mortgage, three children, day care costs, and the prospect of college tuition. “I don’t feel wealthy,” the wife, a tax manager, told Frankel. “I don’t have a bunch of money stashed away anywhere.” While the 2017 tax reform bill brought relief for many Americans, limits on state and local tax deductions have further engendered economic unease.

In her new book Squeezed, Alissa Quart captures how middle-class American families are struggling to attain the standard of living once enjoyed by their parents. And in an important chapter on the upper middle class, she profiles “life at the bottom of the top.” Quart argues that higher earners, like most Americans, contend with income disparity and the extreme wealth enveloping metro regions. In the San Francisco Bay Area, for instance, upper-middle-class families go broke hiring tutors and maintaining lifestyles that permit their children to compete with their wealthiest peers. The parents, working professionals, are emotionally ravaged by endless costs. They discover few perks in geographical serendipity, graduate degrees, or traditionally high-earning professions like law.

Quart reveals how the legal profession has induced economic stress since the 2008 recession. In the past decade, law firms and corporations have hired fewer lawyers. Yet for lawyers just entering the profession, student debt is a crippling part of their lives. As Quart notes, student debt at the average law school increased from $95,000 to about $112,000 in 2014. It is difficult to fathom how simple steps in life—getting married, buying a home, starting a family—are financially possible with such debt levels. But the struggle transcends age. Quart profiles a 59-year-old Mississippi lawyer who, following health setbacks, was ultimately “pushed out” by her employer. Life continued at its indifferent pace. The mother still had to pay for her son’s college tuition during her initial medical leave. “This is a vastly different life from what I expected to be having at this age,” she told Quart. “The six-figure salaries and benefits are long gone.”

The upper middle class’s discontent also transcends political ideology. A seemingly high-earning Republican household in suburban Cleveland confronts expenses similar to a high-earning Democratic household in suburban Philadelphia. These are people who tune out the minute-by-minute plot twists of the Trump presidency. If anything, they are streaming Netflix or watching HGTV for a nurturing distraction. Their daily focus is on remaining financially viable.

Aspirations prove costly regardless of geography. A four-year degree at a public college, for example, costs nearly twice as much as it did in 1996. Exorbitant college debt now dictates the financial future of Baby Boomers, Gen. Xers, and Millennials. Boomers, at the peak of their earnings, postpone retirement and support children with student loans. Gen. Xers, nearing the height of their careers, remain broke due to years of paying off higher education debt. Millennials, still young in their professional lives, primarily work to pay off monthly federal and private student loan bills. Credit cards are a necessary prescription for each generation’s economic survival. In 2017, the nation’s total credit card debt was over $1 trillion.

Economic insecurity is not limited to higher education. The cost of health care has also doubled since the 1990s. Obamacare only accelerated the costs incurred by households. The Journal of the American Medical Association has reported studies suggesting that the consolidation of medical practices actually “drives up costs.” Obamacare hastened the swallowing of regional hospitals by larger health care systems. This merger frenzy has empowered hospital systems to negotiate with insurance companies. But the mergers have increased costs, eliminated competition, and created barriers to care. The upper middle class, like so many others, are absorbing the costs of this transformed landscape. Rising premiums only add to their financial burden.

Of course, the upper middle class is in a better position than most Americans. In Dream Hoarders, Richard V. Reeves correctly unveiled how they are collectively removed from the socio-economics of the nation’s majority. Their economic outcomes remain favorable compared to the struggles of countless working-class Americans. But a sizable number of higher earning households are not “opportunity hoarding.” There is a cost to working parents ensuring their children have better lives than their own. In the booming 2010s, this segment of the population thought they would be in a better place than what they’d anticipated during the booming 1990s. Yet their diplomas did not translate into liquid cash. Upper-middle-class families, while affluent and well connected, have been met with empty pockets and unfulfilled dreams in this brave new economy.

Charles F. McElwee III is a writer based in northeastern Pennsylvania. He’s written for The American Conservative, City Journal, The Atlantic, National Review, and the Weekly Standard, among others.