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MIDDLE CLASS

IN AMERICA

Prepared by the

U. S. Department Of Commerce 

Economics and Statistics Administration 

for the 

Office of the Vice President of the United States

Middle Class Task Force

January 2010

ACKNOWLEDGEMENTS

I would like to acknowledge the contributions of those who assisted in the preparation of

this report. 

I am particularly grateful for the work done by members of my staff. David Beede and Beethika

Khan are responsible for most of the research and analysis that went into this report and were

assisted by staff at the Census Bureau. George McKittrick, Jane Molloy and Sabrina Montes also

contributed significantly to the final product.

We have also benefited greatly from the comments and suggested edits that were made by my

colleagues at the Departments of Labor, Health and Human Services, and the Treasury, as well as

those from the National Economic Council and the Council of Economic Advisors. Their astute

observations greatly enhanced our work.

Finally, I want to thank Jared Bernstein for inviting us to undertake this effort for the Middle Class

Task Force and for his assistance in helping us formulate our approach to this important topic.

Rebecca M. Blank

Under Secretary for Economic Affairs

U. S. Department of Commerce 

Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 

MIDDLE CLASS IN AMERICA

EXECUTIVE SUMMARY

Most Americans consider themselves middle class. This raises the question, what does it meanto be middle class? This report examines various definitions, discusses middle class values

and aspirations, and presents hypothetical budgets showing how these aspirations might be achieved

with different incomes. Finally, we consider whether or not it is harder to live a middle class

lifestyle today than it was twenty years ago. 

Income levels alone do not define the middle class. Many very high and very low income persons

report themselves as middle class. Social scientists have explained this by defining “middle class” as

a combination of values, expectations, and aspirations, as well as income levels. Middle class

families and those aspiring to be part of the middle class want economic stability, a home and a

secure retirement. They want to protect their children’s health and send them to college. They also

want to own cars and take family vacations. However, aspirations alone are not enough; middle

class families know that to achieve these goals they must work hard and save. 

This report examines how two-parent two-child families and single-parent two-child families at

different income levels might achieve a middle class lifestyle. The result is a snapshot of

hypothetical family finances during a single year when both children are in school and before they

start college. The estimates in this report present a picture of the possible spending and saving

decisions that families might make. A major conclusion to be drawn from this report is that

planning and saving are critical elements in attaining a middle class lifestyle for most families. 

Our results indicate how difficult it might be for many families to achieve these goals, particularly

families in areas with higher housing prices. In addition, any number of uncontrollable events can

make it hard to achieve middle class aspirations, including extra medical bills, payments for child

care or elder care, or other demands on income. Families also face uncertainty about their future

income, especially in an environment of high unemployment. 

Finally, we look back two decades to examine whether it is more or less difficult to attain a middle

class lifestyle today. While incomes for married-couple and single-parent families with two children

have increased significantly, much of this rise occurred in the 1990s. In part, these increases occurred

because parents are working more hours in order to maintain higher income levels. Unfortunately,

while incomes have risen, the prices for three large components of middle class expenses have increased

faster than income: the cost of college, the cost of health care and the cost of a house. Thus, we

conclude that it is harder to attain a middle class lifestyle now than it was in the recent past.

One of the hallmarks of American society has been the common desire among families of all

backgrounds for economic security and a better life for their children. Unfortunately, many families

are not able to afford the sort of expenditures that we lay out in this report. If American families

are to realize their middle class dreams, the nation must have a healthy economy, a responsible

private sector that offers decent jobs with benefits, and an effective public sector that provides high

quality schools for all children.

Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 

MIDDLE CLASS IN AMERICA 

PRINCIPAL FINDINGS

■ Middle class families are defined by their aspirations more than their income. We assume that

middle class families aspire to home ownership, a car, college education for their children, health

and retirement security and occasional family vacations.

■ Families at a wide variety of income levels aspire to be middle class and under certain

circumstances can put together budgets that allow them to obtain a middle class lifestyle. 

■ Planning and saving are critical elements in attaining a middle class lifestyle for most families.

Under the right circumstances, even lower-income families may be able to achieve many of their

aspirations if they are willing to undertake present sacrifices and necessary saving. 

■ However, many families, particularly those with less income, will find attaining a middle class

lifestyle difficult if not impossible. Areas with high housing costs can make even higher-income

families feel pinched. Lack of employer-provided health insurance can confront a family with

bankrupting health costs. And unforeseen expenses can ruin even the best-laid budget plans.

■ It is more difficult now than in the past for many people to achieve middle class status because

prices for certain key goods – health care, college and housing – have gone up faster than income. 

Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 

MIDDLE CLASS IN AMERICA 

Most Americans consider themselves middle class. A 2005 New York Times survey found that

only 1% of respondents considered themselves to be ‘upper class’ and only 7% considered

themselves part of the ‘lower class.’ The remainder said that they were either ‘middle class’ or

‘working class’ (Cashell, 2008). 

The fact that so many people consider themselves part of the middle class raises the question of

what it means to be middle class. What characteristics are shared by so many people? 

This report assumes that middle class families and those who wish to be middle class have certain

common aspirations for themselves and their children. They strive for economic stability and

therefore desire to own a home and to save for retirement. They want economic opportunities for

their children and therefore want to provide them with a college education. Middle class families

want to protect their own and their children's health. And they want enough income for each adult

to have a car and for a family vacation each year. Middle class families are forward-looking, and

they know that to achieve these goals, they must work hard, plan ahead and save for the future.

Indeed, being middle class may be as much about setting goals and working to achieve them as it is

about their attainment.

This report presents hypothetical budgets to show how families with middle class aspirations might

achieve these goals at different income levels. The report suggests that even some lower-income

families can achieve middle class lifestyles (particularly if they live in lower-cost housing areas),

although they would have to make more difficult trade-offs and settle for less than would higherincome families. For many families, however, these goals will be difficult to achieve. In some areas

of the country, higher housing prices make a middle class lifestyle hard even for those above the

middle of the income distribution. Extra medical bills or higher family expenses for child care or

elder care can easily make a middle class lifestyle unattainable.

We end by comparing the opportunities facing middle class families two decades ago, in 1990,

versus today. While incomes have increased substantially among families with two children, even

after accounting for inflation, much of this rise occurred in the 1990s; incomes have been relatively

stagnant since 2000. In addition, many of the adults in these families are working more hours to

support their higher incomes. Most importantly, prices of three big expenditure items – housing,

health care, and college – have gone up faster than incomes. These factors make attaining a middle

class lifestyle harder today than it was two decades ago.

Middle Class in America ● January 2010 1

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
I. How is the Middle Class Defined?

No single accepted definition of middle class appears in the academic or popular literature

but numerous definitions have been suggested. A few of the most common definitions are

outlined below.

The Pure Income Definitions. Most economic analyses of the middle class use income as the sole

defining measure (Frank, 2007; Isaacs, et al., 2008). Examples of income definitions include ranges

based on:

■ absolute dollar-value income levels;

■ income levels relative to median household income; 

■ fixed portions of the income distribution (e.g., quartiles or quintiles); and

■ income levels relative to the poverty line. 

In this report we have selected two-parent two-child families and one-parent two-child families as

the focus for analysis. A family with two children under age 18 is often considered the typical

American family. Table 1 shows the median, lowest quartile and highest quartile income levels for

these two types of families in 2008. (The median is the income level at which half of all families

earn less and half of all families earn more; the 25th percentile is the income level at which onequarter of all families earn less; and the 75th percentile is the income level at which three-quarters

of all families earn less.)

Table 1

Income Levels for Selected Families, 2008

In the distribution of In the distribution of 

two-parent two-child one-parent two-child

families families

Lowest quartile cut-off $50,800 $13,200

(25th pecentile)

Median $80,600 $25,200

(50th percentile)

Highest quartile cut-off $122,800 $44,000

(75th percentile)

Poverty Line $21,800 $17,300

Sources:

Incomes: U.S. Census Bureau, Current Population Survey, 2009 Annual Social and Economic (ASEC) Supplement and 

ESA calculations.

Poverty lines: http://www.census.gov/hhes/www/poverty/threshld/thresh08.html 

Note: Calculations are based on the income distribution of each family type with two children under age 18.

2 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
The family at the middle of the income distribution of two-parent two-child families has $80,600

in income. In contrast, one-parent families have significantly lower incomes. The family at the

middle of the income distribution of one-parent two-child families has only $25,200 in family

income, far below the 25th percentile among two-parent families. More than one-fourth of singleparent two-child families have incomes below the poverty line, an income level that cannot support

a middle class lifestyle. 

The data in Table 1, which we use throughout this report, are based on family income, which

combines the income of all related individuals who live together. This includes the income of the

primary family with any related secondary family living in the same household. The income of

unrelated cohabiters, including unmarried partners, is not included in family income. While this

has little effect on the income of married couples, it does reduce potential income among singleparent families. About 20% of single-parent families with two children reside with an unrelated

individual. Including the income of unrelated individuals would increase the total median income

available to single-parent families by about $5,000. The research on how much income is shared

among non-related cohabiters shows mixed results, however. Cohabiters share some income, but

much less than married couples. Most family income statistics count only income of related

individuals and we follow this convention, excluding the income of unrelated cohabiters.

Throughout this report, “income” refers to gross money income (before tax payments and tax

credits) which includes earnings and nonlabor income such as interests and dividends, child support

and cash payments. It does not include in-kind (noncash) benefits. 

Self-Reported Class. Another approach to defining the middle class has been to simply ask people

to identify their social class. Respondents generally choose from the following options: lower class,

middle class, and upper class. (Some surveys also provide a ‘working class’ option.) A 2008

Congressional Research Service report summarized results from three surveys in which people were

asked about both their income and their class status and concluded that the self-defined middle

class consists of people with household incomes roughly between $40,000 and $250,000

(Cashell, 2008). 

A 2008 Pew Research Center survey found that there is not always a good match between a

respondent's class identification and reported income (Pew Research Center, 2008). In the Pew

survey, 40% of respondents with incomes below $20,000 considered themselves to be middle class

as did a third of those with incomes above $150,000. About half of each racial and ethnic category

– blacks, whites and Hispanics – indicated they were middle class even though minority income

levels are lower in general. These findings suggest that income alone is not a good indicator of class.

Multidimensional Definitions. Some researchers have attempted to create indexes that aggregate

occupation, income, education, and other observable characteristics in order to rank people by

social standing or living standards (Nam and Boyd, 2004; Gilbert, 2008). Such rankings can be

used to indicate middle class status. 

Other social scientists define the middle class more broadly by taking into account harder-toobserve, non-monetary attributes like emotional state and morale (Chen and Newman, 2007;

Newman, 2006; Sullivan, et al., 2000). This is based on the perception that certain values and

Middle Class in America ● January 2010 3

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
expectations, primarily about economic security, safety, and protection, are strongly associated with

the middle class. Examples of middle class values discussed in this literature include: 

■ strong orientation toward planning for the future; 

■ control over one’s destiny; 

■ movement up the socio-economic ladder through hard work and education; 

■ a well rounded education for one’s children; 

■ protection against hardship, including crime, poverty, and health problems; 

■ access to home ownership and financial assets such as a savings account; and

■ respect for the law. 

While difficult to quantify, these characteristics would explain the survey responses that suggest a

middle class orientation is about more than just income.

Overall, the literature on the middle class leads to a conclusion that income levels alone do not

define the middle class. Members of the middle class tend to be defined more by their values,

expectations, and aspirations than their income level although income may constrain the manner in

which some of their aspirations can be realized. We follow this approach by assuming that middle

class families have certain common aspirations, which we lay out in the following section. 

II. What Are Middle Class Aspirations?

Several key elements characterize what seem to be fairly standard middle class values and aspirations.

These include economic stability, a better life for one’s children, and a current lifestyle that allows

for a few creature comforts. One characteristic that stands out in the literature on the middle class

is that middle class families emphasize their expectations about the future; this means they work

hard, plan ahead, and expect to save in order to attain those plans. Indeed, being middle class may

be as much about setting goals and working to achieve them as it is about their actual attainment. 

Our assumptions about what is included in middle class aspirations are discussed below. These are

general aspirations and different families may weight them differently. Some families may spend

vacation time with relatives and some may not feel the need for two cars. Others live in areas where

house prices are high and more resources have to be expended for housing. While we do not

assume that all families have exactly the same goals, we posit that, in general, these are items that

most middle class families value and wish to attain.

Home Ownership

Owning one’s own home is part of the middle class American dream. We assume that families with

two children will aspire to be homeowners.

4 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
A Car for Each Adult

Car ownership has often served as shorthand for attainment of the middle class lifestyle. Ever since

Henry Ford’s introduction of the Model T, no other object has so strongly typified the American

middle class. On average there are two vehicles on the road for every American family (Bureau of

Labor Statistics, 2008). Cars allow families a wider choice of residential and work locations and

better access to many desired activities. We assume that middle class families want one car per

adult. Indeed, many middle class families have job, school, and housing arrangements that make it

difficult to manage without two cars. 

A College Education for Children

Education provides a clear example where planning for the future, hard work, and movement up

the socio-economic scale converge. Much of the planning and sacrifice families make is for the

benefit of the next generation. We assume that middle class families aspire to a college education

for all their children, seeing college as a ladder to future economic opportunities. 

Health Security

Middle class families want to protect their children's health and their own health – and protect their

hard-earned lifestyles from the economic impacts of catastrophic medical expenses. This requires

health insurance.

We assume middle class Americans desire employer-provided health insurance. This means that

they must pay their share of premiums for employer-provided health insurance and for medical

expenses not covered by insurance.

Retirement Security

Middle class families expect to have some economic security in retirement, and want to be able to

retire at an age when they can enjoy their retirement. This means that they must save for

retirement. Middle class families also strive to live within their means and avoid unsustainable

levels of debt.

We assume that middle class families save enough that their accumulated savings with interest,

together with Social Security, can provide income equal to at least 50% of their earnings at

retirement at age 65. While this is not a high level of retirement savings, many families also have

employer-provided contributions to their retirement savings, which add to their retirement income. 

Family Vacations

Being middle class means having enough economic security to take well-deserved breaks. We

assume that middle class families want occasional family vacations. 

Middle Class in America ● January 2010 5

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
III. What Does it Cost Families to Achieve Middle Class Aspirations?

In this section, we present some hypothetical budgets as examples of how families at different levels

of income with middle class aspirations might achieve these goals. 

This exercise has at least three distinct purposes:

■ We show how families at quite a wide range of incomes, under the right circumstances, may

be able to attain a middle class lifestyle, and what sort of expenditures this might involve. 

■ We show the variation in what different families at different income levels might buy to

achieve their goals. 

■ We indicate how constrained some of these choices are, and point out the difficulties that

could prevent families from achieving a middle class lifestyle. While this is particularly true

for families below the middle of the income distribution, even higher-income families may

have problems achieving a middle class lifestyle in certain circumstances.

It is important to emphasize that the budgets we present below are examples of possible budgets.

They do not indicate what families should spend. Rather, we estimate the costs of the six middle

class aspirational items (housing, health care, car, college education, vacation, and retirement

savings) that we described in the last section. We make assumptions about what families at different

income levels are likely to buy and these estimates are based on our calculations of what it would

cost to attain these items. We also take account of what families at different income levels actually

spend on non-aspirational items (food, clothing, utilities, and taxes) based on the best available

expenditure data. Adding these expenses together, our budgets indicate how a family at a given

income level might choose to allocate their money across different goods and services in order to

achieve their middle class aspirations. As we emphasize below, different families will make different

trade-offs and some will choose to spend more on some items and less on others. And, as we also

emphasize, many families will find these suggestive budgets unrealistic and will not be able to attain

all of the items that make up a middle class lifestyle. 

We focus on two different types of families in this report: 

■ A four-person family with two parents and two children under age 18 who are both

in school; and

■ A three-person family with one parent and two children under age 18 who are both

in school. 

About 38% of Americans live in married-couple families with one or more related children

under age 18; another 13% live in other family arrangements with at least one related child under

age 18, predominantly single-mother families. It is important to consider what it means to be

middle class for persons who live in other types of families, including retirees, older workers without

children at home and younger people just starting out. This is beyond the scope of this current

report, however. 

6 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
We draw on many different sources to inform our cost estimates of each component of a middle

class lifestyle at various income levels. We necessarily make some basic assumptions about when

various life milestones take place in order to provide structure for our estimates. For instance, we

assume that parents save for retirement over their entire career. Details on how these cost estimates

are derived, and the assumptions that underlie them, are in Appendix Table 1.

We recognize that many families incur expenses for child care when children are young. This is a

particularly important issue for single-parent families but is also a major concern for two-parent

families in which both parents work. We assume that families begin to save for college when the

second child enters kindergarten. The presumption is that child-care costs prevent earlier college

savings. Any ongoing child-care costs for families with school-age children are subsumed in the

‘other expenditure’ category.

The estimates that we present describe a single year, providing a snapshot of hypothetical family

finances during the period after both children start grade school and before they start attending

college. We do not model the complete lifecycle of consumption and income paths for our

hypothetical families. If we did so, we might have them spend more in certain periods of their life

and save more in other periods. Or we might have them pay off big expenses in ‘lumpy’ ways,

rather than spreading the cost of items like a car over long periods of time through borrowing. The

intent of this paper is not to replicate family finances over their lifetime, but to show what a

reasonable set of possible expenses might look like for families at different income levels who seek a

middle class lifestyle.

A. Middle Class Spending for Two-Parent Families with Two Children

To illustrate how families might achieve middle class status, we focus on three hypothetical twoparent two-child families at three different income levels. We start by looking at a family whose

income is at the median income level for two-parent two-child families in the U.S., and investigate

what their expenditure patterns might look like if they wanted to attain those things we characterize

as goals of the middle class. This family has $80,600 in total annual income, as we saw in Table 1.

But we want to see how these goals might be attained by higher- and lower-income families as well.

So we also consider families whose income is at the 25th percentile ($50,800 in income) and at the

75th percentile ($122,800 in income) of income among two-parent two-child families. This allows

us to observe the additional trade-offs lower-income families would have to make, or what

additional luxuries higher-income families could afford. 

Appendix Table 1 lays out our cost estimates in more detail. A quick description here is probably

useful. We have six middle class items we assume these families want – home ownership, cars,

college education for children, family vacations, health security and retirement security. We

estimate the cost for each of these items, except housing, using the data described in Appendix

Table 1. We use published estimates of what similar families are paying in federal, state and local

income taxes. Using data on family consumption expenditures, we estimate the actual dollars spent

on all other items (i.e., everything except the six things in our middle class consumption bundle) by

families at these income levels. Hence, we allow these families to spend on average as much on

‘everything else’ as they do in reality. Finally, we estimate how much money this leaves in the family

Middle Class in America ● January 2010 7

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
budget for house payments and estimate the affordable mortgage (and the resulting value of the

house) that these families can pay each month. In this sense, housing is our ‘residual item’ and we

balance the family budget by having them purchase only the house that they can afford. 

Figure 1 demonstrates our hypothetical budgets for these three married-couple two-parent two-child

families. Table 2 provides more details about the costs and expenditures in these budgets. 

See Appendix Table 1 for data sources.

8 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Table 2

Hypothetical Budgets for Married-Couple Families

with Two School-Age Children

Annual Income $50,800 $80,600 $122,800

(25th percentile) (50th percentile) (75th percentile)

House 

■ Total house value $143,800 $231,400 $400,300 

■ Annual cost $10,900 $17,600 $30,400

Annual medical expenses Assumes children are Out-of-pocket Out-of-pocket

covered by CHIP and premiums for premiums for

a parent purchases employer-sponsored employer-sponsored

health insurance health insurance plus health insurance plus

through employer. non-covered expenses. non-covered expenses.

$3,800 $5,100 $5,100

Car ownership Two small used Two medium-sized Two large sedans 

sedans with $7,500 sedans each with and/or SUVs each with 

purchase price, driven $20,000 purchase price, $30,000 purchase

a total of 25,000 driven a total of 25,000 price, driven a total of 

miles/year. miles/year. 25,000 miles/year.

■ Annual cost $7,900 $12,400 $15,400

Saving for college Two years of Four years at in-state Four years at private 

education to cover community college plus public college with college with financial 

75% of expenses two years at an in-state financial aid; live at aid; live on campus.

public college, with home with parents for

financial aid; assumes one year.

live at home with parents.

■ Annual cost $1,800 $4,200 $6,800

Family vacation One week family One week family Two weeks of family 

vacation travel every vacation travel every vacation travel 

other year. other year. every year. 

■ Annual cost $1,500 $3,000 $6,100

Annual retirement savings 

needed to achieve a 50% 

income replacement rate in 

combination with 

Social Security 

2.0% saving rate = 3.2% saving rate = 3.3% saving rate =

■ Annual cost $1,000 $2,500 $4,100

Annual food, clothing, 

utilities, and other "non- $17,900 $23,200 $30,300

aspirational" expenditures

Taxes on income

■ Average federal rate 2.20% 5.30% 10.20%

■ Average state & local rate 1.90% 2.50% 3.50%

■ FICA rate 7.65% 7.65% 6.33%

■ Total tax rate 11.75% 15.45% 20.03%

■ Total annual cost $6,000 $12,400 $24,600

See Appendix Table 1 for data sources. 

Note: FICA = Contributions to Social Security's Old-Age, Survivors, and Disability Insurance and Medicare's Hospital Insurance

programs under the Federal Insurance Contributions Act. CHIP = Children's Health Insurance Program.

Middle Class in America ● January 2010 9

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
As is apparent from the table, families at these different income levels will have to make quite

different choices in order to live within their budget. The range in income from $50,800 to

$122,800 is wide. Nonetheless, with careful planning, some families at all these levels can realize

these aspirations.

■ Homeownership. Housing makes up a significant portion of any household’s expenses.

These costs will vary among families depending on a variety of factors. Geographic location

matters since housing prices throughout the country vary considerably. There are also other

trade-offs families make in selecting affordable housing. For example, many urban families

must choose between living in the far suburbs with long commuting times in exchange for a

larger house at a given price versus living closer in but making do with less living space.

Others choose between lower down payments and higher monthly mortgage costs.

We assume that all families would pay 20% down on a house and take out a 30-year fixed

mortgage for the remaining 80% of house value. We estimate that middle-income twoparent families will be able to afford a $231,400 house, while our lower-income two-parent

family can only afford a $143,800 house. Our higher-income family can afford a $400,300

house. This compares to an overall median house price in the U.S. of $197,600 in 2008

(U.S. Census Bureau, 2008a).

These housing expenses as a share of annual income range from 21.5% for the 25th

percentile family to 24.8% for the 75th percentile family – well below the 30% of income

rule of thumb often used as a benchmark of housing affordability (Stone, 2006). For the

nation as whole, 30.9% of owner-occupied housing units with a mortgage were valued at

less than $150,000 (U.S. Census Bureau, 2008b), suggesting that home-ownership is

possible in some places even for the 25th percentile family.

Of course, housing prices differ across and within regions, reflecting differences in housing

quality and size, as well as important neighborhood characteristics such as crime levels and

school quality. Middle class families will have to adjust their housing budgets in different

regions of the country, and may be forced to make trade-offs in their housing choices.

In order to compare our estimated housing values with actual housing values in different

parts of the country, Figure 2 shows median values of owner-occupied housing in nine

major regions. 

The data in Figure 2 imply that attaining the middle class dream of owning a home is likely

to be difficult for many at the lower end of the income scale. We estimate that our middleincome two-parent family can afford a mortgage for a house worth $231,400. According to

Figure 2, while this amount is sufficient for purchasing the median house in certain parts of

the country, in other regions (particularly in the Northeast and West) this amount will fall

short. This suggests that many of these families may have to devote more of their income to

housing or perhaps live in smaller houses or in neighborhoods with lower school quality

than they might prefer. As we will see below, the situation is much worse for single-parent

families who have significantly lower incomes. 

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U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
As it turns out, wages and cost of living are correlated, so family incomes also vary

regionally. Incomes on average are higher in some of the high housing-cost areas like the

Northeast and West regions. This somewhat offsets housing cost differences. These

regional income differences are, however, outside the scope of our estimates. 

Source: U.S. Census Bureau, 2008a.

Note: The high point for housing price in the 2000s occurred in 2007. Prices fell in 2008 but year-to-date data in 2009 show little

further decline. 

■ Health security. All two-parent two-child families, regardless of income, are assumed

to be covered under an employer-sponsored health insurance plan, and to pay the average

employee share of health insurance premiums as well as expenses not covered by insurance.

We estimate these premiums and expenses cost $5,100 for both the median and

75th percentile married-couple families with two children. 

However, the 25th percentile family income is low enough that the children in these

families are eligible for low-cost health insurance under the Children's Health Insurance

Program (CHIP) in many states. (Based on October 2009 eligibility rules following

enactment of the Children's Health Insurance Program Reauthorization Act of 2009,

53% of the population of the United States live in states where children in such families

would be covered by CHIP (Center for Children and Families, 2009).) We assume that the

parents of such families purchase health insurance only for themselves through their

Middle Class in America ● January 2010 11

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
employer. Out-of-pocket premiums and uncovered medical expenses are estimated to total

$3,800 for these families. This corresponds to 7.5% of annual income for our lower-income

family, which is a significant share (absent CHIP eligibility, the cost would be 10.0%). For

our higher-income family, medical expenses account for a smaller 4.2% of income. 

In the absence of health insurance, it would be difficult for a family facing serious illness

to maintain other elements of a middle class lifestyle. If at least one parent does not have

employer-provided health insurance available through his or her job, the cost of directly

purchasing health insurance on the open market is high. The average annual premium

for non-group family coverage on the open market can be twice as high as out-of-pocket

premiums under employer-sponsored plans, roughly $6,200 compared to $3,100 in

2005-2006 (Bernard and Banthin, 2008). Unfortunately, employer-based health

insurance coverage has been declining, from 64.2% in 2000 to 58.5% in 2008 (U.S.

Census Bureau, 2008c), suggesting that more families are struggling to find health

insurance coverage.

■ Car ownership. We assume all two-parent families would like to own two cars, one for

each adult. We assume each car is driven the national average of about 12,500 miles per

year, but that the likely size and purchase price of cars would increase with income. We

assume these cars are bought with a loan and that the monthly costs include the loan

repayment fees. We also include the cost of gas and car maintenance expenses. We estimate

the annual cost of owning cars would range from $7,900 (15.5% of annual income) among

lower-income families to $15,400 (12.5% of annual income) among higher-income families.

All three of our families spend a significant share of their income on cars. 

■ Saving for college. Family expectations about the type of higher education institution their

child will attend and their child’s living arrangements in college will likely vary by income

level. This is one of the trade-offs that families at lower income levels make. We assume

that a family at the lower end of the income distribution would plan for their children to

attend a community college for two years and then transfer to a four-year public institution,

receiving financial assistance that provides a considerable discount from published tuition

and fee rates. Their children are assumed to live at home to save on room and board

expenses. Of course, this assumes that a family lives within commuting distance of a

community and/or four-year college. While this is true for most urban and suburban

families, it may not be possible for rural families. 

We assume that a medium-income family would plan to send their children to a four-year

public institution for a full four years. On average, 25% of students at public institutions

live at home. We embed this into our family cost estimates by assuming the child lives at

home for one year (25% of their time). A higher-income family is presumed to plan to

send their children to live and study at a private four-year college or university. 

We also assume that 25% of out-of-pocket college expenses (equivalent to one year’s

expense) will be financed by loans incurred by college students. College saving by parents

for the remaining 75% of expenses ranges from $1,800 (3.5% of annual income) for our

12 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
lower-income family to $6,800 (5.5% of annual income) for our higher-income family.

Higher-income families must save a larger fraction of their income to meet college expenses.

■ Family vacation. We estimate the cost of one week of travel for a family vacation. This

could involve a visit to national parks and historical sites, to a theme park, or to an

interesting urban area. For many families, such vacations often include time with relatives.

We assume that the frequency of such vacations increases with income: a lower-income

family would take a week's travel vacation every other year, while a higher-income family

would take two week-long vacations every year. We estimate one week’s travel, lodging, and

expenses for this family at $3,000. This means that vacation costs range from $1,500 (3.0%

of annual income) to $6,100 (5.0% of annual income) among our families. Of course,

although we characterize this as ‘one week’, many families may choose to spend this money

on several trips over the year rather than during a single week. 

■ Saving for retirement. Social Security replaces a decreasing share of pre-retirement earnings

as incomes rise, so families with higher incomes need to save at a higher rate in order to

attain our assumed target (namely, a high-enough savings amount by age 65 so that the

annuity income combined with Social Security equals 50% of pre-retirement income). As a

result, retirement saving rates range from 2.0% for a lower-income family to 3.3% for a

higher-income family.

The sum of retirement savings plus college savings indicate the total amount of savings

needed to meet middle class aspirations. For two-parent two-child families, total saving as a

share of income ranges from 5.5% at the 25th percentile to 8.9% at the 75th percentile. As

a share of after-tax income, the saving rates are 6.2% and 11.1%, respectively. 

These rates are higher than the aggregate savings rates that are published regularly. Among

all households, savings rate averaged 4.2% of after-tax income during 1990-2008 (Bureau of

Economic Analysis, 2009), which is lower than our estimated total saving rates. Saving

rates were particularly low in the mid 2000s but have risen since the recession that began in

2008. Is it reasonable for us to suggest higher savings for our three hypothetical families?

Families with pre-college-age children are typically headed by middle-aged persons, who

tend to save more than younger persons (who have not yet reached their full earnings

potential) and older persons (who may be working fewer hours.) (For example, see Dynan,

et al., 2009.) A broader definition of savings that includes capital gains, however, would

also add to the savings rate among families with children. This is because capital gains on

houses (and to a lesser extent on retirement and college investments) would loom larger for

typical middle-aged adults with two children at home than for younger families (who have

fewer assets) or older persons (who are more likely to spend down savings after retirement). 

Our estimates underscore the fact that saving is an important component of any middle

class lifestyle. However, when families face high expenses, whether for housing, child care,

education or other needs, savings are often sacrificed first. A previous report for the Middle

Class Task Force discussed various tax-advantaged plans that encourage saving, such as

Section 529 college savings plans (U.S. Department of the Treasury, 2009).

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U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
As some have suggested, low saving rates among American families in the recent past may

indicate that some families believed that their appreciating housing values in the mid-2000s

meant they did not have to save in other ways. But, as we also show below, over the past

decade many families have faced significant costs that rose faster than their income. One

response to this may have been lower savings.

■ Other living expenses. All families have to pay certain basic expenses. Our calculation for

expenditures for non-aspirational items is based on average expenditures for consumption

items such as groceries, clothing, and utilities for families at each income level, although it

also includes non-essential expenses, such as entertainment expenses and the purchase of

food at restaurants. Such expenses will clearly vary among families and perhaps across

geographic areas where costs differ, although the regional differences in prices for these items

are quite small relative to the differences in housing prices. 

We estimate that these other living expenses vary from $17,900 for families at the 25th

percentile to $30,300 at the 75th percentile. Because this category includes many items often

considered necessities, expenditures do not vary as much across households as other items. 

■ Taxes. Before families can decide how to spend their income on purchases or savings, they

have to pay taxes. We estimate that tax rates will range from 11.75% to 20.0%. This

means that after tax income for these three families will range from $44,800 to $98,200.

However, it should be noted that a large share of taxes represents contributions toward

future Social Security and Medicare benefits; absent such programs, a significant share of

such contributions would have to be saved to ensure similar security after retirement.

What do these budgets show for our married-couple four-person families? First, they suggest how

families who do not face unexpected expenses can attain a middle class lifestyle at quite different

income levels. Second, they show the differences in quality and quantity of goods that families at

different income levels must purchase, so that our lower-income family makes different car,

vacation, and college choices. 

Finally, it should be clear from these budgets that many families will face difficulties achieving their

middle class aspirations. Families without employer-provided insurance may face much larger outof-pocket medical expenses. Families in rural areas may face much greater car and transportation

costs. Families in high-cost housing areas may be unable to afford a three-bedroom house (or any

house.) Many families may find that their college or retirement savings disappear in a year when

they face unexpected expenses. While our hypothetical budgets show that some families can attain

a middle class lifestyle at quite different income levels, the assumptions necessary to make these

family budgets balance also suggest that many families will find this difficult.

B. Middle Class Spending for Single-Parent Families with Two Children

We now turn from married-couple families to single-parent families with two school-age children.

Table 1 showed that families at the 25th percentile of the income distribution for this group had

only $13,200 in income and were below the poverty line. A family income at or below the poverty

14 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
line for single-parent families cannot sustain the middle class lifestyle that we define in this report.

Therefore, this report considers only hypothetical budgets for two sets of single parents, at the

median ($25,200 annual income) and at the 75th percentile ($44,000 annual income). 

Single-parent families with two children have only three people to support while the two-child

married-couple families that we discussed in the last section supported four people. Hence, singleparent families need less income to live an equivalent lifestyle. The differences in income between

these two types of families are much, much larger, however, than any adjustment for family size

would suggest. Because of their low incomes, these families will have to make steeper trade-offs than

any except the lowest-income married-couple families in order to maintain a middle class lifestyle. 

Why are incomes among single-parent families so low? One-parent families generally rely on only

one primary earner while many two-parent families have two earners. One-parent families are

typically headed by women who work in lower-wage jobs and (often because of child-care

responsibilities) work fewer hours. Furthermore, parents in one-parent families have less education,

on average, than parents in two-parent families, and this also limits their earning potential.

Figure 3 shows the potential budget that single-parent families at these two income levels would

have to maintain in order to attain a middle class lifestyle, while Table 3 provides more details on

the hypothetical expenditures that underlie these budgets for single-parent two-child families. The

text following the table highlights the assumptions and implications of the findings. Appendix

Table 1 indicates in more detail how we calculate these expenditure levels. 

See Appendix Table 1 for data sources.

Middle Class in America ● January 2010 15

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Table 3

Hypothetical Budgets for Single-Parent Families

with Two School-Age Children

Annual Income $13,200 $25,200 $44,000

(25th percentile) (50th percentile) (75th percentile)

House 

■ Total house value $104,900 $175,500 

■ Annual cost $7,950 $13,300

Annual medical expenses Assumes children are Assumes children are 

covered by CHIP and covered by CHIP and

parent is uninsured. parent purchases health

insurance through employer.

$700 $1,800

Car ownership One small used sedan One small used sedan with 

with $7,500 purchase $10,000 purchase price,

price, driven a total of driven a total of 12,500

7,500 miles per year. miles per year.

■ Annual cost $3,000 $4,300

Saving for college education Assumes a combination Two years of community 

to cover 75% of expenses of financial aid, loans college plus two years at an

taken out by students, and in-state public college, with

living with parents cover financial aid; assumes live

full cost to parents. at home with parents.

■ Annual cost $0 $1,700

Family vacation One week family vacation One week family vacation 

visiting relatives/friends travel every other year.

every other year.

■ Annual cost $500 $1,000

Annual retirement savings 

needed to achieve a 50% 

income replacement rate in 

combination with 

Social Security 1.2% saving rate= 2.0% saving rate= 

■ Annual cost $300 $900

Annual food, clothing, utilities, 

and other "non-aspirational" $14,200 $16,100

expenditures

Taxes on income 

■ Average federal rate -14.50% 1.55% 

■ Average state & local rate 1.10% 1.88% 

■ FICA rate 7.65% 7.65% 

■ Total tax rate -5.75% 11.08%

■ Total annual cost -$1,450 $4,900

See Appendix Table 1 for data sources. 

Note: FICA = Contributions to Social Security's Old-Age, Survivors, and Disability Insurance and Medicare's Hospital Insurance

programs under the Federal Insurance Contributions Act. CHIP = Children's Health Insurance Program. 

16 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 

Unable to 

achieve a 

middle 

class 

lifestyle
Income levels among single-parent two-child families are low and this is a major constraint on their

ability to achieve middle class goals. For the two families that we consider, at the median and the

75th percentile of income, a middle class lifestyle can be achieved but only with substantial budget

discipline. Emergencies don’t fit into these budgets.

■ Homeownership. A median-income single-parent family can afford only a $104,900 home,

while the higher-income single-parent family can afford a home valued at $175,500. Note

that the 75th percentile single-parent family can afford a higher-valued house than the 25th

percentile married-couple family, despite the similarity in their incomes. We estimate that

the median single-parent two-child family would spend 31.5% of their annual income on

housing, while the 75th percentile family would spend 30.2%. These expenditures

approximately meet the traditional 30% of income affordability benchmark. 

In 2008, 16.1% of owner-occupied housing units with a mortgage nationwide were valued

at less than $100,000 (U. S. Census Bureau, 2008b), which suggests that in some parts of

the country it may be feasible – albeit challenging – for the median single-parent two-child

family to afford a house, given our hypothetical budget. According to the housing data

presented in Figure 2, however, it is probably impossible for median-income single-parent

families to attain homeownership in many parts of the country. No matter where they live,

they will have to buy a small home, well below the median-priced house in their area. In

many areas, these families are likely to end up renting a lower-cost apartment or living with

others and will have to give up the middle class dream of homeownership. 

■ Health security. We assume that single-parent family medical expenses would be lower

than for married-couple families, reflecting smaller family size. We assume children in both

the median and 75th percentile families are eligible for CHIP coverage. (The income of the

75th percentile family is 250% of the federal poverty guideline for a family of three –

$17,600 in 2008 – used by the states to determine eligibility.) Given their low overall

incomes, however, we assume that median-income parents decline to purchase health

insurance for themselves through their employer and opt instead to apply the money that

could have been spent on out-of-pocket premiums toward housing expenses. Consequently,

medical expenses ($700) account for only 2.7% of income at the median for these families,

but these lower costs come with much less security in health care.

We assume that parents with the 75th percentile income do purchase health insurance for

themselves through their employers and incur costs totaling $1,800 (4.1% of income). If

the parent does not have a job that provides health insurance (and this is common among

jobs held by lower-wage female earners) or lives in a state with less generous CHIP eligibility

requirements, this family will almost surely have to forego health insurance coverage or

forego other middle class goals in order to either buy high-priced health insurance on the

open market or to pay health expenses if a family member becomes seriously ill.

■ Car ownership. We assume single-parent families would own one car, but that the likely

size, annual mileage, and purchase price of a car would increase with income. The cost of

Middle Class in America ● January 2010 17

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
car ownership ranges from $3,000 (11.9% of income) to $4,300 (9.8% of income) for the

median and 75th percentile families, respectively.

■ Saving for college. We assume that the 75th percentile single-parent family would plan for

their children to attend a community college for two years and then transfer to a four-year

public institution, while living at home to save on room and board expenses; children would

be expected to borrow to cover 25% of their college expenses. This requires them to save

$1,700 each year. 

The median-income single-parent family does not have the money to save for college and

must forego the security of college savings. Because of very low family income, however, if

the children have reasonably good high school grades and standardized test scores, they will

be able to receive financial aid from almost any college to which they apply. We assume

that this aid, combined with loans incurred by the children, will cover all college expenses. 

■ Family vacation. All families want occasional vacations. This may be more difficult to

attain for single-parent families but it is likely that vacations are considered desirable and

important. We assume that the median and 75th percentile families spend a week traveling

every other year, but the median-income family spends less and must stay with relatives

and friends. 

■ Saving for retirement. The median-income single-parent family would need to save an

estimated 1.2% of income for retirement – less than the higher-income family because of

higher Social Security replacement ratios for lower-income workers. This is a very low

estimate of needed retirement savings. Living on 50% of current income after retirement

will be a challenge, given these parents’ low income levels during their working years.

■ Other living expenses. This calculation is based on average expenditures on consumption

items such as food, clothing, and utilities among families at this income level. These

expenses are likely to vary among families and perhaps across geographic areas where

costs differ.

We estimate that these living expenses vary from $14,200 (56.3% of annual income) for

families at the median to $16,100 (36.6% of annual income) at the 75th percentile.

■ Taxes. Tax rates range from -5.75% to 11.1%. This means that after-tax income ranges

from $26,650 to $39,100. The middle-income single-parent family has a negative tax rate

and is actually receiving some money back from the government, because the parent is

eligible for the Earned Income Tax Credit.

The budgets for single-parent families are much tighter than for most two-parent families. It may

be possible for these parents to attain a middle class lifestyle and to do the saving necessary for

retirement and college if the family lives in a low-cost housing area. But any sort of emergency,

from unemployment to illness to unexpected home or car repairs, will make these budgets difficult,

if not impossible.

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U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
IV. How Is This Income Earned?

While the focus of this report is on the expenditures that different families would have to adopt in

order to attain certain middle class goals, it is perhaps valuable to say something about the sources

of income that these families are likely to have. Table 4 shows the share of families with different

numbers of earners among both two-parent two-child families and among one-parent two-child

families. We show the number of earners among income groups that bracket our 25th, 50th, and

75th percentiles of income. 

A substantial minority (22.7%) of married-couple families has only one earner, while 76% have at least

two earners. Most of these families are able to maintain their income because both parents are employed.

Earnings from employment accounted for 95% of total family income in 2008 for married-couple

families with two children. Lower-income married-couple families are more likely to have only one

earner, suggesting that some of them may be trading off lower incomes for one parent’s time at home. 

Among single-parent families, the majority (55.2%) has only one earner and 12.1% have no earners.

Single-parent families with no earners are likely getting income from other sources whether governmental

(e.g., Social Security or disability income) or private (e.g., child support, alimony or retirement). Many of

them are likely to be living with other adults. Table 4 suggests one reason why many single-parent

families have much lower incomes than married-couple families. They have far fewer earners. Earnings

from employment accounted for 81.5% of total family income in 2008 for single-parent families with

two children. The parents in these single-parent families (who are typically mothers) have less education

than the typical parent in a married-couple family, which also reduces their income. 

Table 4

Percentage of Families by Number of Earners, Selected Income Groups, 2008

a. Married-Couple Families with Two Children

Family Income Levels

Less than $70,000 to Greater than

Number of Earners All $70,000 $90,000 $90,000

None 1.3 3.3 0.0 0.1

One 22.7 34.8 16.0 14.3

Two or more 76.0 61.9 84.0 85.7

All 100.0 100.0 100.0 100.0

b. Single-Parent Families with Two Children

Family Income Levels

Less than $20,000 to Greater than

Number of Earners All $20,000 $30,000 $30,000

None 12.1 27.4 5.6 3.4

One 55.2 52.7 63.7 53.5

Two or more 32.7 19.9 30.7 43.1

All 100.0 100.0 100.0 100.0

Source: U.S. Census Bureau, Current Population Survey, 2009 ASEC and ESA calculations.

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U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
V. Changes Over Time

It is interesting to consider how the situation of these families might have changed over the last two

decades. In order to look at changes in the situation of those who seek to attain a middle class

lifestyle, we compare the estimates above from 2008 with data from 1990.

Figure 4 shows how incomes among our two types of families have changed over these two decades.

In 1990, two-parent two-child families reported a median income of $67,100, increasing to

$80,600 by 2008, a 20% increase. (All of these income data are reported after adjusting for

inflation by stating the 1990 data in 2008 inflation-adjusted dollars using the Consumer Price

Index Research Series, known as CPI-U-RS.) Families at the 25th percentile of the income

distribution of two-parent two-child families experienced an income increase of 14% and those at

the 75th percentile experienced an income increase of 28%.

One-parent two-child families also experienced substantial income gains. At the median, their

income went from $20,800 to $25,200, a 21% gain. At the 75th percentile of the income

distribution of one-parent two-child families, income rose 10%. (As noted previously, we consider

it almost impossible for one-parent two-child families at the 25th percentile of the income

distribution among these families to achieve a middle class lifestyle and do not include them in our

analysis. All of them are below the poverty line.)

These are substantial income gains. However, as also shown in Figure 4, incomes rose significantly

for families during the 1990s but few gains occurred during the decade of the 2000s. For twoparent two-child families, the gains in income between 1990 and 2000 ranged from 17% at the

25th percentile to 23% at the 75th percentile. For one-parent two-child families, the gains were

32% at the median and 20% at the 75th percentile. However, incomes for most of these groups

either stagnated or declined during the 2000s. (Note that this is not a function of using 2008 as

the end-point in this analysis. Although 2008 was a recession year, the income gain patterns would

look very similar if we used 2007 as our end-point comparison year.)

20 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Middle Class in America ● January 2010 21

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 

Source: U.S. Census Bureau, Current Population Survey, 2009, 2001 and 1991 ASEC and ESA calculations.
The income gains over these two decades for our two-child families are far higher than that

indicated by the aggregate data, which show that median income rose only 9% between

1990 and 2008 among all American households. Why are the gains so much larger among these

two-child families? 

There are four reasons (Appendix Table 2 provides background information for the facts

cited below): 

■ Almost all of these families show greater hours of work in 2008 than in 1990. For instance,

two-parent families have experienced a 5% increase in their annual work hours (from 3,567

to 3,747, equivalent to almost 5 weeks of additional full-time work). Single-parent families

have experienced a 13% increase in work hours. Increases in work hours can help families

raise their income, but this comes at the cost of less time at home with children and less

time for non-market-work activities. This might also mean greater child-care expenses,

which are not accounted for in this analysis.

■ Parents of two children are a different group in 2008 than in 1990. They are older and

better educated. This reflects both increases in the age of first births and increases in

education levels (particularly among women). The median two-parent family is now headed

by someone with more years of college than in 1990. The median one-parent family is now

headed by someone with some college rather than by someone with only a high school

degree. More skilled and older parents have higher earnings and hence higher incomes.

■ Families with two children are a declining share of the overall population, with particularly

large declines in the share of the population living in two-parent two-child families. More

people are living in single-parent families (even though the share of people in families with

single parents and two children has fallen), living alone or living in families without children.

So, even while incomes among families with two children are growing, aggregate incomes are

growing much more slowly because fewer people are living in this family structure.

■ Finally, there have been real gains in wages over these time periods among female workers at

all skill levels and among more educated male workers. One reason why incomes at the

75th percentile went up more rapidly than at the median is that wage gains over the past

two decades have been concentrated among higher-skilled and higher-wage workers.

This means that families who strive to attain middle class status have more income now than in the

past, although they are also working more. This suggests that it would be easier to reach middle

class goals with their income in 2008 than in 1990. Unfortunately, income gains have to be

contrasted with changes in the prices of goods that middle class families strive to attain. And the

unpleasant fact is that the prices of some of the biggest expenditure items for middle class families

have increased much more rapidly than their incomes.

Table 5 shows how prices have changed for three of the major components in the middle class

family budgets we describe above, namely, housing, health care, and college. In putting this table

together, we try to compare items that are as identical as possible in both years. The first three

22 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
columns on Table 5 present the actual price levels for 1990 and 2008 and the change in these prices

from 1990 to 2008. The last three columns look at inflation-adjusted price levels and changes. We

adjust the 1990 prices for economy-wide inflation levels (using the CPI-U-RS price series), so the

last column shows the increase in the price of these items over and above the average level of

inflation. Hence, the price changes from the last column of Table 5 can be directly compared to the

increases in income between 1990 and 2008, shown in Figure 5, since incomes are adjusted for

inflation in the same way. 

As Table 5 indicates, the actual price of the median house has increased by 150%, from $79,100 to

$197,600 over the past two decades. The last column indicates that this was 56% faster than the

overall rate of inflation. This means that the equivalent down-payment and mortgage payments for

a house have gone up at a rate faster than the increase in family incomes for many families. 

As many have noted, the price of health care expenditures paid by families, including both

premiums and out-of-pocket medical expenditures has soared over the past two decades. We

estimate this has gone from $1,200/year to $5,100/year, a 325% increase in price. This is 155%

more than the overall rate of inflation and far above the rate of increase in incomes.

Finally, the price of college has also gone up rapidly. Tuition, fees, and room and board at four-year

public colleges have increased 60% faster than the overall rate of inflation over this time period,

while they have increased 43% faster at four-year private schools.

Figure 5 compares the gains in inflation-adjusted median income between 1990 and 2008 among

our two types of families with the increases in prices (after adjusting for economy-wide inflation) of

housing, health care and college. Parents with growing children are most likely to make investments

in housing and in college, and to care about purchasing health insurance for their families. Hence,

they are more affected by these large price rises than are other persons. Prices of other items (not

listed on Table 5) that are likely to be consumed by the average family do not show increases of the

same magnitude. For example, prices of toys, apparel, televisions and computers have declined

during the last two decades while prices of food, new and used vehicles, and furniture have

increased at less than the rate of overall inflation.

Even though incomes among families with two children have been rising, equivalent families are

likely to feel further behind in 2008 than in 1990. The main reason is that prices for some of their

big-ticket expenditures are much higher, relative to their incomes, than they were in 1990. In

addition, the adults in many of these families are working more hours to support their increased

income. We conclude that it is harder to attain a middle class lifestyle in 2008 than it was two

decades ago. The goods that parents want to buy for themselves and for their children to live a

middle class lifestyle are harder to attain now at current income levels than they were in the past.

Middle Class in America ● January 2010 23

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Table 5

Price Changes in Key Middle Class Items: 1990 - 2008

Inflation Adjustment

Price 

1990 changes in

Actual Actual Actual prices in Actual inflation1990 2008 price 2008 2008 adjusted

prices prices changes dollars prices terms*

Housing 

(Median value) $79,100 $197,600 150% $126,600 $197,600 56%

Health Care 

(Premiums and out- $1,200 $5,100 325% $2,000 $5,100 155%

of-pocket expenses)

College

Four-year public college 

(Tuition, fees, and $5,200 $13,400 158% $8,400 $13,400 60%

room and board)

Four-year private college 

(Tuition, fees, and $13,200 $30,400 130% $21,200 $30,400 43%

room and board)

* One way to interpret this column is to recognize that it shows price changes in excess of economy-wide inflation.

Sources: 

Housing: U.S. Census Bureau, 2008 American Community Survey (Table B25077) and 1990 Decennial Census (Table H023B).

Health Care Expenses: Bernard D., Banthin J. Family Level Expenditures on Health Care and Insurance Premiums among the Nonelderly

Population, 2006. Research Findings No. 29. March 2009. Agency for Healthcare Research and Quality, Rockville, MD. Gabel, Jon R.,

Paul B. Ginsburg, Jeremy D. Pickreign, and James D. Reschovsky “Trends In Out-Of-Pocket Spending By Insured American Workers,

1990–1997.” Health Affairs. March/April 2001.

College: U.S. Department of Education, National Center for Education Statistics. (2009). Digest of Education Statistics, 2008 (NCES

2009-020), Table 331.

Note: While we calculated the 1990 and 2008 prices for housing, health care and college using actual information on their cost,

there are also published price indexes for housing, medical care, and college. Consistent with this table, all of these indexes also show

substantially higher price increases in these commodities than is shown in the aggregate CPI.

24 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Income Changes Price Changes

See Figure 4 and Table 5 for data sources.

VI. Conclusion

Families across the income spectrum often report themselves as middle class. This suggests that

most American families share the desire for economic stability and a better life for their children.

Income may not be the primary determinant of whether a family considers itself middle class,

although income will shape and constrain choices. We assume that families that strive to be middle

class want to attain certain things, including their own home, a car for each adult, retirement and

college savings, adequate health care, and a regular family vacation.

Our hypothetical budgets indicate that a middle class lifestyle is possible even among relatively

lower-income families under the right circumstances. Of course, lower-income families will face

many more trade-offs and saving will be much harder for them. Single-parent families face

particular difficulties in reaching these goals because of their lower income levels.

Yet, it should be clear that only a few unplanned expenses can dispossess any of these families from

their middle class dreams. Loss of a job, unexpected illness that isn’t covered by health insurance, or

the need to help out an elderly parent can create a severe budget crisis for any of the families that

we describe above. This will require them to forego some of the things that middle class American

families expect. 

Middle Class in America ● January 2010 25

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Housing is the biggest wild card in these budgets. In some areas of the country, even the twoparent family at the 75th percentile of the income distribution would be unable to buy the average

available house and would have to select a smaller-than-average house or live further away from

their jobs and pay higher commuting expenses. 

In fact, while we’ve focused particular attention on the lower-income families, it is easy to see why

even the 75th percentile family may feel very budget-constrained. We are not assuming an

extravagant lifestyle for this family. Particularly if this higher-income family lives in a high-cost

housing area and wishes to send their children to a private college while also accumulating adequate

retirement savings, the family will quickly face real difficulties putting together a workable budget.

Not all families will value the aspirations that we describe in this report and this is both expected

and appropriate. There is no reason to expect that all families want the same things. Some families

consider two or even three cars essential for their well-being, while others prefer to rely on public

transportation. Similarly, some families may choose to forgo vacations and other luxuries to send

children to private colleges. These are all personal preferences and trade-offs across these choices are

expected. 

The income of families with two children has risen substantially over time, in part because the

parents of two children are a different group now versus two decades ago. They have become more

educated and older, earning more income and working more hours. At the same time, despite

these income increases, these middle class goals have become harder to attain because the costs of

three big items – housing, health care, and college – have risen faster than their incomes. Thus, we

conclude that it is harder to attain a middle class lifestyle now than it was in the recent past.

A major conclusion to be drawn from this report is that planning and saving are critical elements in

attaining a middle class lifestyle for most families. Under the right circumstances, even families at

the lower end of the income scale may be able to achieve many of the aspirations listed if they are

willing to undertake present sacrifices and necessary saving, and if nothing unexpected happens to

their income or their budget needs. 

One of the hallmarks of America has been the common dreams among families of all backgrounds

for economic security and a better life for their children. Many middle class families have been able

to achieve this dream. Unfortunately, not all families are able to afford the sort of expenditures that

we lay out in this report. Even those families that can afford a middle class lifestyle must make

regular sacrifices and may be one unexpected event away from disaster. To provide stability for

American families, our nation needs a healthy economy, a responsible private sector that offers

decent jobs with health care and pension plans, and an effective public sector that provides high

quality schools for all children. When these goals are met, more families will be able to reach their

middle class dreams. 

26 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
REFERENCES

Bernard, D. and J. Banthin. Premiums in the Individual Health Insurance Market for Policyholders

under Age 65: 2002 and 2005. Statistical Brief #202. April 2008. Agency for Healthcare

Research and Quality, Rockville, MD.

(http://www.meps.ahrq.gov/mepsweb/data_files/publications/st202/stat202.pdf ).

Bureau of Economic Analysis. National Income and Product Accounts. “Table 2.1. Personal

Income and Its Disposition” (Last Revised on November 24, 2009). 

Bureau of Labor Statistics. “Table 2. Income before taxes: Average annual expenditures and

characteristics, Consumer Expenditure Survey, 2008.”

(http://www.bls.gov/cex/2008/Standard/income.pdf ).

Cashell, Brian W. “Who are the Middle Class?” CRS Report for Congress. October 22, 2008.

Center for Children and Families. "Eligibility Levels in Medicaid & CHIP for Children, Pregnant

Women, and Parents, as of October 1, 2009." (http://ccf.georgetown.edu/index/cms-filesystemaction?file=statistics/eligibility%20by%20state.pdf ). 

Chen, Victor Tan and Katherine S. Newman. The Missing Class: Portraits of the Near Poor in

America. Beacon Press. 2007.

Dynan, Karen E, Wendy Edelberg, and Michael G. Palumbo. “The Effects of Population Aging on

the Relationship among Aggregate Consumption, Saving, and Income.” American

Economic Review: Papers & Proceedings 2009, 99:2, 380-386.

Frank, Robert. Falling Behind: How Rising Inequality Harms the Middle Class. University of

California Press. 2007.

Gilbert, Dennis. The American Class Structure in an Age of Growing Inequality. Los Angeles: Pine

Forge Press. 2008.

Isaacs, Julia, Isabel Sawhill, Ron Haskins. Getting Ahead or Losing Ground: Economic Mobility in

America. The Brookings Institution. 2008.

Nam, Charles B. and Monica Boyd. “Occupational Status in 2000: Over a Century of CensusBased Measurement.” Population Research and Policy Review. 23: 327-358, 2004.

Newman, Katherine S. Chutes and Ladders: Navigating the Low-Wage Labor Market. Russell Sage

Foundation. 2006.

Pew Research Center, Inside the Middle Class: Bad Times Hit the Good Life. April 2008.

Stone, Michael E. "What is Housing Affordability? The Case for the Residual Income Approach."

Housing Policy Debate. 17:1, 151-184, 2006.

Sullivan, Teresa A., Elizabeth Warren, and Jay Lawrence Westbrook. The Fragile Middle Class:

Americans in Debt. Yale University Press. 2000.

Middle Class in America ● January 2010 27

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
U.S. Census Bureau. American Community Survey (ACS). 2008a. “Table B25077. Median Value

(dollars) - Universe: Owner-Occupied Housing Units.” (2008 American Community Survey

1-Year Estimates)." (http://factfinder.census.gov).

U.S. Census Bureau. American Community Survey (ACS). 2008b. "Table S2506. Financial

Characteristics for Housing Units with a Mortgage" (2008 American Community Survey 1-

Year Estimates)." (http://factfinder.census.gov). 

U.S. Census Bureau. 2008c. Income, Poverty, and Health Insurance Coverage in the United States:

2008. (P60-236RV) (http://www.census.gov/hhes/www/income/income08.html ).

U.S. Department of the Treasury. An Analysis of Section 529 College Savings and Prepaid Tuition

Plans: A Report Prepared by the Department of Treasury for the White House Task Force on

Middle Class Working Families. September 9, 2009 

(http://www.treas.gov/press/releases/docs/529.pdf ). 

28 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force 
Middle Class in America ● January 2010 29

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force Appendix 1 Assumptions, Sources and Methods Used in Tables 2 and 3 Married-Couple Families with Single-Parent Families with Two Children Two Children General $50,800 $80,600 $122,800 $25,200 $44,000 25th Income 50th Income 75th Income 50th Income 75th Income Percentile Percentile Percentile Percentile Percentile Annual Income House Medical expenses Data from the 2009 Annual Social and Economic (ASEC) Supplement of the Current Population Survey. Downloaded from U.S. Bureau of the Census website (http://dataferrett.census.gov/index.html ). The house value is determined by how much disposable income is left over after accounting for all other aspirational and non-aspirational expenses. We assume that a 20% down payment is made and that a fixed rate mortgage is obtained to finance the rest of the house value. The costs of repairs, maintenance, and insurance are assumed to vary in direct proportion to the cost of the house. Sources: Rate for conventional fixed-rate 30-year mortgage: 4.94% (http://www.federalreserve.gov/releases/h15/update/). Property taxes ($2,779) and maintenance, repairs, insurance, other expenses ($1,616) for average home-owner with mortgage from "Table 7. Housing tenure and type of area: Average annual expenditures and characteristics, Consumer Expenditure Survey, 2007" (http://www.bls.gov/cex/2007/Standard/tenure.pdf ) and scaled by value of house. Out-of-pocket premiums for employer- sponsored health insurance plus non- covered expenses. Source: Bernard D., Banthin J. Family Level Expenditures on Health Care and Insurance Premiums among the Nonelderly Population, 2006. Research Findings No. 29. March 2009. Agency for Healthcare Research and Quality, Rockville, MD. 

(http://www.meps.ahrq.gov/mepsweb/data_files/publications/rf29/rf29.pdf ). 2006 values adjusted to 2008 prices usingthe Consumer Price Indices (CPI) formedical care services (2006=350.6 and2008=384.943) and health insurance(2006=103.1 and 2008=114.221)downloaded from the U.S. Bureau of LaborStatistics CPI website(http://www.bls.gov/cpi/home.htm). 

2006 meanout-of-pocketexpenditures foremployersponsored healthinsurancepremiums for twoperson families($2,490). 2006 meanout-of-pocketexpenditures onhealth care servicesfor families withtwo adults and atleast one childwith partial publichealth insurance($959).

2006 mean out-of-pocketexpenditures for premiums among3+ person families with privatecoverage all year ($2,846). 2006mean out-of-pocket expenditures onhealth care services among familieswith 3+ members with privatecoverage ($1,795)

Premiums = $0(Assumes CHIPcoverage forchildren; parentdeclines topurchase insurancecoverage for self).2006 meanout-of-pocketexpenditures onhealth care servicesfor families withone adult and atleast two childrenwith partial publichealth insurance($616).

2006 mean out-ofpocket expendituresfor employersponsored healthinsurancepremiums forsingle-personfamilies ($1,002).2006 mean out-ofpocket expenditureson health careservices for familieswith one adult andat least two childrenwith partial publichealth insurance($616).
30 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force Married-Couple Families with Single-Parent Families with Two Children Two Children General $50,800 $80,600 $122,800 $25,200 $44,000 25th Income 50th Income 75th Income 50th Income 75th Income Percentile Percentile Percentile Percentile Percentile Car Ownership and Operation College Education Sources: Gasoline price: $2.53 from Energy Information Administration. Monthly Energy Review. August 2009. Interest rate (3.43%) and approximate term of loan (5 years): Federal Reserve Board G19 (Consumer Credit) release; July 2009 "new car loans by auto finance companies"

(http://www.federalreserve.gov/releases/g19/current/g19.htm),All other items: American Automobile

Association. Your Driving Costs 2008 Edition.

Assumes interest and principal for car loan areaveraged over eight years (assumed life of car).Assumes earnings on college savings exceedcollege expense inflation by one percentage point.Sources: Costs of college: The College Board.Trends in College Pricing 2008.(http://professionals.collegeboard.com/profdownload/trends-in-college-pricing-2008.pdf ). Percent of

undergraduates living at home with parents(25%— basis for assumption that students atfour-year public colleges live at home withparents for one year): National Center forEducation Statistics. Profile of Undergraduatesin U.S. Postsecondary Education Institutions:2003-04. June 2006. (http://nces.ed.gov/

pubs20062006184_rev.pdf ). Ratios of grantsto tuition, 2007-2008: computed usingDAS-T online version 5.0(http://nces.ed.gov/das/ ). Assumes all families

borrow one year of college costs.

Two-year public college: Published tuition: $2,402; books: $1,036; transportation: $1,380;other expenses: $1,895; room & board: assumed $0.Four-year public college: Published tuition: $6,585; books: $1,077; transportation: $1,010;other expenses: $1,906; room & board (full year) $7,748.Four-year private college: Published tuition: $25,143; books: $1,054; transportation: $807;other expenses: $1,397; room & board: $8,990.Ratio of grants to published tuition:

2-parent, 2-child $50,800 income: 70%2-parent, 2-child $80,600 income: 35%2-parent, 2-child $122,800 income: 35%1-parent, 2-child $25,200 income: 142% for 2-year college; 257% for 4-year public college1-parent, 2-child $44,000 income: 88.5% for 2-year college; 78% for 4-year public college

Costs per mile:Gas: $0.0812Maint.: $0.0398Tires: $0.0055Fixed costs:Ins.: $949License,registration,taxes: $410

Costs per mile: Gas: $0.1067Maint.: $0.0467Tires: $0.0085Fixed costs: Ins.: $907License,registration,taxes: $562

Costs per mile:Gas: $0.1148Maint.: $0.0507Tires: $0.0077Fixed costs:Ins.: $907License,registration,taxes: $562

Costs per mile:Gas: $0.0812Maint.: $0.0398Tires: $0.0055Fixed costs:Ins.: $949License,registration,taxes: $410

Costs per mile:Gas: $0.0812Maint.: $0.0398Tires: $0.0055Fixed costs:Ins.: $949 License,registration,taxes: $410
Middle Class in America ● January 2010 31

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force Married-Couple Families with Single-Parent Families with Two Children Two Children General $50,800 $80,600 $122,800 $25,200 $44,000 25th Income 50th Income 75th Income 50th Income 75th Income Percentile Percentile Percentile Percentile Percentile Family Vacation Retirement For median two-parent two-child family: benchmarked to cost of one-week vacation package to Disney World originating in Chicago, including air fare, hotel, and park admission (package offered by Southwest Airlines for February 2010). Cost halved for 25th percentile two-parent two-child family and doubled for 75th percentile two-parent two-child family. Cost for 75th percentile single-parent two-child family is two-thirds of cost for 25th percentile two-parent two-child family; this cost is halved for the median single-parent two-child family. After-tax savings rate needed to achieve a 50% income replacement rate in combination with Social Security starting at age 65. Interest rate: Assumed at 5%. Annual rate of salary increase: 4% (average growth in average wages by Social Security over past 10 years). Life expectancy at 65 for all persons: Statistical Abstract of the United States 2008

(http://www.census.gov/compendia/statab/tables/ 09s0101.pdf ). Social Security replacement ratios: The2009 Annual Report of the Board of Trusteesof the Federal Old-Age and Survivors Insuranceand Federal Disability Insurance Trust Funds,p. 198(http://www.ssa.gov/OACT/TR/2009/tr09.pdf ).

Average Wage Index in 2008: $41,334.97(http://www.socialsecurity.gov/OACT/COLA/awidevelop.html ) 

Social Securityreplacement rate:36% (assumescareer-averageearnings at"scaled mediumearnings" =about 100% ofthe nationalaverage wageindex (AWI)).

Social Securityreplacement rate:27% (assumescareer-averageearnings at meanof scaledmedium andscaled highearnings = about130% of AWI).

Social Securityreplacement rate:24% (assumescareer-averageearnings at"scaled highearnings" =about 160%of AWI).

Social Securityreplacement rate:43% (assumescareer-averageearnings at "lowearnings" =about 45%of AWI).

Social Securityreplacement rate:36% (assumescareer-averageearnings at "scaledmedium earnings"= about 100%of AWI).
32 Middle Class in America ● January 2010

U. S. Department Of Commerce ● Economics and Statistics Administration ● ● Office of the Vice President of the United States ● Middle Class Task Force Married-Couple Families with Single-Parent Families with Two Children Two Children General $50,800 $80,600 $122,800 $25,200 $44,000 25th Income 50th Income 75th Income 50th Income 75th Income Percentile Percentile Percentile Percentile Percentile "Non- aspirational" Expenditures Taxes Estimated average share of disposable income spent on food, utilities, entertainment, household furnishings and equipment, apparel, household operations, and other items. Includes sales taxes. Sources: U.S. Bureau of Labor Statistics, "Table 2. Income before taxes: Average annual expenditures and characteristics, Consumer Expenditure Survey, 2008"

(http://www.bls.gov/cex/2008/Standard/income.xls) and

"Table 2301. Higher income before taxes: Averageannual expenditures and characteristics, ConsumerExpenditure Survey, 2008"(http://www.bls.gov/cex/2008/Standard/higherincome.xls).

FICA: 1.4% of all income plus 6.2% of income up to2008 Social Security Wage Base ($106,800).Federal Income Taxes: Average tax rates drawn fromGreg Leisterson, "Income Taxes and Tax Rates for SampleFamilies, 2006," Urban Institute, December 2006 (http://www.urban.org/publications/411402.html ) for

filing statuses "married filing joint" with two children and"head of household" with two children. Based on UrbanBrookings Tax Policy Center Microsimulation Model(version 1006-1). State and Local Income Taxes: Average tax rates arepopulation-weighted averages for the largest city in eachstate and the District of Columbia, based on Governmentof the District of Columbia, Office of Revenue Analysis.Tax Rates and Tax Burdens in the District of Columbia– A Nationwide Comparison 2008. (September 2008), 

(http://www.cfo.dc.gov/cfo/frames.asp?doc=/cfo/lib/cfo/cash_reports/08study-final.pdf ) and ESA calculations. 

39.75% =

average for

$40,000-

$49,999 

income

households

(41.3%) and

$50,000-

$59,999

households

(38.3%)

34.1% = 

share for

$80,000-

$99,999 

income

households

30.8% = 

share for

$120,000-

$149,000

income

households

53.3% =

average for

$20,000-

$29,999

income

households

(57.6%) and

$30,000-

$39,999

households 

(49.0%)

41.3% =

share for

$40,000-

$49,999

income

households 

2.2% = 

rate for family

with Adjusted

Gross Income =

$50,000

5.3% = 

rate for family

with AGI =

$75,000

10.2% = 

rate for family

with AGI =

$125,000

14.5% = 

rate for family

with AGI =

$25,000

1.55%=

average of rates

for families

with AGI =

$35,000

(-0.5%) and

$50,000

(3.6%)

1.9% = 

rate for family

with AGI =

$50,000

2.5% = 

rate for family

with AGI =

$75,000

3.5% = 

average rates 

for families 

with AGI =

$100, 000 and

$150,000

1.1% = 

rate for family

with AGI =

$25,000

1.9% = 

rate for family

with AGI =

$50,000
Appendix 2

Data for Section V: Changes Over Time

Family Characteristics at Selected Percentile Ranges of Family Income 

Part 1. Married-Couple Families with Two Children

1990 2008 Change*

a. 20th to 30th percentile of Family Income

Age (in years) of Family Head 35.2 37.6 2.5

Average Education (in years) of Family Head 12.4 13.2 0.9

Annual Hours Worked, all Adults in Family 3,167 3,303 4.3%

b. 45th to 55th percentile of Family Income

Age (in years) of Family Head 37.1 38.5 1.5

Average Education (in years) of Family Head 13.1 14.3 1.1

Annual Hours Worked, all Adults in Family 3,567 3,747 5.0%

c. 70th to 80th percentile of Family Income

Age (in years) of Family Head 38.7 40.8 2.2

Average Education (in years) of Family Head 14.3 15.5 1.2

Annual Hours Worked, all Adults in Family 3,878 4,011 3.4%

Part 2. Single-Parent Families with Two Children

1990 2008 Change*

a. 45th to 55th percentile of Family Income

Age (in years) of Family Head 33.9 35.4 1.4

Average Education (in years) of Family Head 11.9 13.0 1.1

Annual Hours Worked, all Adults in Family 1,890 2,143 13.4%

b. 70th to 80th percentile of Family Income

Age (in years) of Family Head 36.9 38.2 1.3

Average Education (in years) of Family Head 13.1 13.7 0.6

Annual Hours Worked, all Adults in Family 2,328 2,389 2.6%

* Change was calculated using unrounded data.

Source: U.S. Census Bureau, Current Population Survey, 2009 and 1991 ASEC and ESA calculations.

Note: Education is a rough approximation for 1990.

Middle Class in America ● January 2010 33

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