Shawdesh Desk:

What is the minimum annual income to be in the middle class in the United States?

Consumer Affairs did some figuring recently, using a calculator from the Pew Research Center and an inflation calculator from the U.S. Bureau of Labor Statistics to create the list.

Middle class income

The minimum income for a family of four living in New York? $81,396.

It’s about $1,200 less than it takes to live a middle class life in Hawaii: $82,630. That state tops the list. New York – along with Washington D.C. was second on the list.

Alabama and Arkansas rounded out the end of the list, showing the minimum middle class annual income in both states at $51,798.

Some of New York’s neighbors landed mid-list: Pennsylvania at $67,830 and Vermont at $71,530. New Jersey tied for third on the list with Connecticut at $80,163.

Oliver Rust, head of product at inflation data aggregator Truflation, said that historically, the middle class “has been the engine of American economic growth and prosperity.”

The middle class, he said, is now capturing a lower share of income than in the ’60s, ’70s, and ’80s.

What impacts income minimums in New York?

In the two decades since the mid-2000s, it has shrunk from roughly 60%, in part due to demographic changes as “the population has seen a particularly steep increase at the extreme bottom and top of the economic spectrum.”

Inflation is also a factor, he said. Inflation reached a peak of 9% in June 2022.

“Inflation is having and will continue to have a bigger impact than many people realize in so many subtle ways,” said Robert Scott III, an economics professor at Monmouth University in New Jersey. “One thing also that is driving this is this post-COVID period. I think that now that we’ve started to emerge from this euphoria, people are willing to spend money.”

Amitrajeet Batabyal, a professor of economics at the Rochester Institute of Technology in Henrietta, noted that geographic location is also a key factor, in part due to “significant differences in average incomes and in the cost of living.”

“The cost of living in even the most expensive part of Alabama, for instance, is much lower than the cost of living in NYC, particularly in Manhattan,” he said. And even within New York, income minimums will wane as one moves farther from the NYC metro area.

Incomes also reflect education premiums, he said. “All else being equal, the states with higher income minimums are likely to have more educated workforces,” he said. “More education implies higher salaries and this tends to push up the average income numbers.”