Why middle-class life feels increasingly out of reach

It’s a good time to be a middle-class American. And yet it’s never felt worse. By many traditional measures, the economy is strong. Unemployment remains near historic lows, and middle-income Americans are making more than they were 50 years ago. Yet millions of Americans who have followed what was long considered the formula for a middle-class life — earn degrees, work full-time, marry, buy a home, raise children, stick to a budget — increasingly wonder why financial security feels elusive.

Part of the confusion is that “middle-income” and “middle-class” are not the same thing. Middle-income is an economic measurement. Middle-class is something broader: the belief that steady work should provide stability, a dose of comfort and a reason to expect that children will have at least as many opportunities as their parents. Increasingly, economists say, households can reach middle-income while falling short of their middle-class expectations.

That helps explain one of the central puzzles of today’s economy.

At the low- and middle-income levels, Americans’ feelings about the economy this year hit the lowest point in nearly half a century of tracking. Years of inflation erased many wage gains. Housing, child care and health care consume larger shares of family budgets even when two adults are working full-time. Rapid advancements in artificial intelligence have added new uncertainty about future work, while soaring stock prices have largely benefited households with significant investments.

“There’s a belief that if you follow the rules, if you go to school and pay your taxes and pay your bills and send your kids to college and whatever, that you’re supposed to do better than the generation before you,” said David Autor, an economics professor at Massachusetts Institute of Technology. When that doesn’t happen, he said, that’s “part of when (people) feel like society’s not functioning well.” Attempts to explain this contradiction often get boiled down to some version of fact vs. perception, enraging many middle-class Americans tired of being told they have unrealistic expectations.

The disconnect suggests something is broken, and economists, policymakers and corporate leaders are increasingly trying to figure out why Americans are so unhappy when, on paper, things look pretty good. Tasha Coats knows what middle-class security feels like — and what it’s like to lose it. As a child, her family’s finances swung from comfortably middle-class to affluent to “working poor,” she said. The experience shaped a simple goal for adulthood: build a stable middle-class life for her family.

Coats and her husband, who live in Plymouth, Minnesota, largely succeeded. They raised two children, both worked, paid the bills and managed occasional family vacations.

Yet today, 66-year-old Coats says, maintaining that life is harder than she ever expected. “At the time it was a pinch,” she said. “But to me, it didn’t feel as pinched then as it does today.” There are two ways to think about what it means to be an American in the middle: There’s how much a person has to earn to be considered “middle-income,” and there’s what it feels like to be “middle-class.” Middle-income can be defined in different ways, including the middle 60% of earners or a dollar range based on area median income (AMI).

Pew Research Center uses a range between two-thirds and double the AMI, which in Minnesota was about $87,000 in 2024, the most recent year of available U.S. census data. That places middle-income households in the state between about $58,000 and $174,000 a year.

Defining the middle-class is trickier because it is about a sense of financial security rather than just income. People who make more or less than the middle-income range may still consider themselves middle-class because of how they grew up, how they live now and how secure they feel about their future, or those of their children. Coats was one of more than 200 people who responded to a Minnesota Star Tribune questionnaire in June about what they believe should comprise a middle-class life and whether their household can afford those things.

Options ranged from necessities such as housing, transportation, groceries and medical care to extras such as vacations, entertainment and dining out. Respondents who said they have minor children living at home were asked additional questions about related expenses, including child care, activities and college savings. Most questions offered multiple answers. For example, when asked about what kind of housing a middle-class household should be able to afford, respondents could choose one or more of three options: “a safe, stable place to live, whether rented or owned”; “owning a home”; and “routine home maintenance, repairs or renter expenses.”

Respondents tended to self-identify as middle-class, but many also said they struggle to afford, or cannot afford, items they believe a middle-class income should cover. Among the top things respondents said feel difficult or impossible to reach: homeownership and maintenance; owning two cars; unexpected expenses; emergency and college savings; and child care.

“I feel frustrated all the time that I have a middle-class job and I’m living paycheck to paycheck,” said a 44-year-old Minneapolis woman who asked not to be named because of concerns about retaliation at work. Her spouse has been freelancing since being laid off about two years ago, she said, and fixed expenses — mortgage, day care, car payments, student loans — eat up all but about $1,500 every month. The remainder has to stretch to cover things like groceries, clothing and activities for her two children, ages 5 and 8.