Comments: More Fun with Wealth and Class

I dunno, $2760 or so (I think your estimation of his tax burden is a bit low) per month, when you're supporting a wife and two kids, doesn't go that far.

That's a nice sum for a bachelor (indeed, I'd think I'd died and gone to heaven to bring home that much each month, as I currently live on around $600/month aside from school costs), but things are significantly different when there are other mouths to feed.

Subtract Roth IRA payments ($500/month), the mortgage (varies wildly, say $1000 including the ESCROW, insurance, property taxes), health/dental/homeowners/life insurance (probably at least $600/month), and the utilities (cable, internet, gas, electric, water, phone, etc.--$250 sound fair?). Now you're down to $410 per month, and you haven't even started to pay for food, gas, clothing, school supplies, car repairs, the busted water heater, gifts, etc.

It's bloody hard to properly raise two kids on $40,000 these days, and $28,000 a year means some big sacrifices.

Now, I haven't read the trade publication you mention, so I can't comment on any other aspects of its tone. But I don't find his comments all that beyond the pale.

But even the low end of the scale (folks who live on $600/month, for instance) can enjoy great luxuries which for most of human history have been reserved for royalty (if available at all). I can sit in my small, zero-bedroom apartment in the middle of August in Texas and feel pleasant at 74, for instance. I have access to most of the information everyone else has access to.

Prosperity Consciousness, by Fredric Lehrman, addressed new ways of thinking about wealth and wealth creation and contentedness.

The area you live in can have a dramatic effect on how far any given income can take you. I've heard of $2000/month one-bedroom apartments in the SF Bay area.

By the way, I may never have another wage-type job again, but the overtime pay laws have always been a thorn in my side. I hope they're eliminated.

Finally, this fellow may look at $40,000 as "working class," and that's debatable (especially, as you point out, the white-collar nature of his occupation), but I've also noticed $60,000 and up referred to as "the rich" in a few places, which strikes me as even more misguided.

Posted by Kevin White at August 12, 2003 01:25 AM

Hi Kevin,

Thanks for your comments. I'll check out Lehrman's book.

Actually, I thought I was erring on the side of caution in terms of describing our fellow's hypothetical tax burden. About half of all families with children in the United States pay NO federal income tax whatsoever, although they do pay payroll taxes. I also think the PITI payments for the house you suggest might be a bit high, but as I'm still a renter and single, I'm not yet in tune with what such things cost.

Still, my complaint is not that a $40,000 salary represents some kind of inexhaustible wealth (this is not 1960) but rather that the true working class make do with much less. Of course they also have Government programs to aid them, to which our correspondent may not have access; but even still I find his lot much better than that of the working class. When this fellow always can't make ends meet, and he comes home from his daily toil stinking of sweat and grease, and home is an overcrowded apartment or house, then I'll cry him a river.

Posted by Benjamin Kepple at August 12, 2003 09:20 PM

Ben, it's America. About 90% of Americans consider themselves middle class or working class. The "rich" are invariably those who make more than us, while we're "middle class."

People who make $100,000/year or more consider themselves middle class as well. Partially that's because, really, while being wealthier is nicer, the differences aren't as profound as in earlier times. (Many of the differences that money brings you these days are advantages in style rather than in necessities.)

Posted by John Thacker at August 13, 2003 02:02 AM

Actually, I don't think Prosperity Consciousness is available in book form. I've got it on tape--twelve tapes to be exact. He dictated some of the content of his lectures for the package. It ought to be available at a major library.

Posted by Kevin White at August 13, 2003 05:09 PM

What you need to consider is location, location, location. In more rural areas $40,000 a year can buy you a mansion. In metropolitan areas 40 grand is horse crap. Try getting by on 40 grand in San Francisco or New York City and you'll see what I mean. I think salary alone is a poor reflection of class status if it does not take into consideration the cost of living.

Posted by Mac Swift at August 14, 2003 09:17 AM

I agree with Mac - location is everything. I was shocked to find out that Caroline and I are in the top 20% of earners, considering the craptacular apartment we can afford, and the limited funds for other endeavors.

But I wasn't shocked at all to learn that if we lived in the suburbs of Richmond, an hour and a half south, we would be able to buy a house outright.

Posted by Ben at August 14, 2003 03:03 PM

Hi Mac,

Well, the fellow I quoted lives in upstate New York, so it would seem to me that forty grand would let one do OK there. Still, you're both definitely right that income and wealth are relative in terms of location.

That said, when I was a younger man, I lived in Los Angeles on a salary considerably less than forty thousand per annum. Not only did I get by, I certainly didn't think I was in the same dire straits as the folks taking my order down at El Pollo Loco.

Posted by Benjamin Kepple at August 15, 2003 03:38 PM