What is considered middle class income in the Bay Area?

Question

Bay Area in Northern Cali.

Answer 1

First, let me say that "middle class" and "middle-class income" are not necessarily synonymous. However, they're not unrelated, either. Consider that you can have a "middle-class income" and lead a lower-class lifestyle. But, you can't have a lower-class income and lead a middle class lifestyle.

With that in mind, the San Francisco Bay Area may be redefining the class structure of a post-modern society. The area is rich in engineers and other professionals who earn about $100,000 or more per year. However, costs -- especially housing -- are so high that the same person who earns $50,000 in Mississippi could lead a much more "middle-class" life.

In terms of education and occupation, certainly the engineer who makes $100 K in Palo Alto is middle class. However, a house in a "middle class" neighborhood can cost $1 million.

Let's do a little math. The $100 K is gross income. However, the engineer's disposable income is considerable less. You have to deduct about 18% for income tax, then there's FICA, insurance, and voluntary deductions. So, annual take-home pay is probably about $72,000.

To buy a $1 million dollar home, you need 20% down. That's $200,000. If you're lucky enough to have that, it leaves you with a $800,000 mortgage. Now, let's assume that you got a good rate, maybe 7%. Your monthly house payments would be about $7,000/month.

However, on a $72,000 annual income, your monthly take home pay is $6,000. A lot of money, almost anywhere except for the Bay Area.

So, obviously, you can't afford that "middle-class" house. You must settle for something in a working-class neighborhood. That would sell for about $400,000. At the same 7%, monthly payments would be $3,500/month.

Now, take your income of $6,000, deduct $3,500, and that leaves $2,500 to live on. But, most of that will go for transportation, utility bills, food, clothes, maintenance, etc. By the end of the month, there is almost nothing left.

Economists call that "left-over" money "discretionary income." In other words, that's what you have to spend on things like vacations, movies, restaurants, etc. Those are the things that make up a "middle-class lifestyle." But, the Bay Area engineer who makes $100,000/year and lives in a working-class neighborhood can't afford any of those things. All the money is eaten up by monthly expenses.

Sociologists define middle class according to lifestyle. But, in the S.F. area, we have many thousands of people who have middle-class educations, middle-class occupations, and middle-class incomes who are not living a middle-class lifestyle.

Just as we had to develop the concept of the "working poor," we may have to come up with a new term for those Bay Area professionals.

Answer 2

$100k per individual earner.

Take into account that average RENT is $2000 p mo, this is the majority of an after-tax paycheck at $100k. If you don't have a household income of at least $200k, buying a home is a practical impossibility unless you want to be in debt up to your eyeballs and pay really crappy interest only loans until you die.

Answer 3

..What bay area? , there are many, be specific

Answer 4

I'd say 100k

Answer 5

100k