The middle class is doomed. At least, this is what the numbers being published by Pew Research would have you believe. In fact, the article begins by stating that the middle class is shrinking. While the article doesn’t mention a growing lower class, the article written by Kathleen Elkins states that the number of adults in the upper-income tier has increased from 17% to 20%. Saying that the middle class is doomed is a very strong statement. But, I believe that if you take a few moments and drill down into the numbers that the Pew Research Center reports with me, you too will see that things look bleak for much of the middle class.

This article, which was published by CNBC and then later picked up by Yahoo Finance, asks the question, “So just how much do you need to make to qualify as middle class these days?”. In order to come up with their answer Pew uses a somewhat simple mathematical equation:

“Pew, which defines middle class as adults whose annual household income is two-thirds to double the national median ($55,775 as of 2016), details the national middle-income range for various household sizes.”

The Pew calculations do have some caveats:

“The income it takes to be middle income varies by household size, with smaller households requiring less to support the same lifestyle as larger households.”

When I first came across this article, I was curious to see what middle class was defined as these days. When I started looking at the numbers, I was rather shocked to see what now qualifies as middle class income. Essentially, with these numbers, much of the so-called middle class would realistically be struggling to house and feed itself. Perhaps after you read the rest of this article you may come to believe that the middle class as you perceive it to be may be much smaller than you thought. Before we go much further, take a moment to visualize in your mind what middle class means to you, and then let’s compare that to reality.

The Middle Class Is Doomed: Minimum Wage?

The first number in this report that caught my eye was the lower boundary for a household of one to be considered middle class. This annual income for a household of one is $24,042. Let’s take a moment and look at this number. While the report does not state whether or not this is a pre or post-tax figure, I have to assume that this is a pretax income figure. Some quick scratchpad calculations would reveal estimates that would lower this annual income to somewhere in the $21,000-$22,000 range once you simply account for things such as everyday sales taxes and the like.

While I am quite certain that federal income taxes and state income taxes could easily push the final annual take-home salary of this individual below $20,000 a year, let’s not dwell on that fact. Instead, let’s take a look at this little interesting fact:

$24,042 divided by a 52 week work year yields a weekly paycheck of approximately $462.35. If you were to assume a standard 40-hour workweek, then this would break down to an hourly pay rate of roughly $11.56 an hour. Being that many places in the United States have minimum wage laws that pay more than $11.56 an hour, by definition every single individual who works close to 40 hours a week in these areas would be considered middle class. There has been a growing movement across the country that has pushed minimum wage standards to $10 an hour. While the effects that this legislation has had are debatable, these numbers are not. Is every individual who has a full-time minimum wage job really middle class? What would the middle class numbers really be if we used real-world definitions rather than quick number calculations?

Living On $400 A Week.

With a weekly take-home paycheck in the $400 neighborhood, normal budgets get stressed pretty quickly. In theory, your rent or mortgage payment should be no more than $400 a month at this income level. With a $1600 a month income, chances are very slim you will qualify for any type of automobile loan at all. So, it’s either a bicycle, a bus pass, or very cheap used car that gets you around. A $100 monthly phone bill becomes tough to cover. Rising grocery or energy prices really chew up any possible expendable income. Travel and vacation seem like distant luxuries. Let’s not even talk about covering any health care costs.

The Middle Class Is Doomed. Here Is Why.Is this really middle class? One could argue that being forced to live with roommates and ride a bicycle while counting every penny and eating frugally does not coincide with the American ideal of being middle class. So, what annual income would you consider to be the lower end of middle class? $35,000 a year? $40,000 a year? Just how small is the middle class, really?

The Middle Class Is Doomed : $72,126

$72,126 is the figure given as the high-end annual income for a household of one in America’s middle class. If we apply some of the same mathematics to this figure we arrive at a weekly earnings amount of $1387.04. Breaking this dollar amount down further reveals an hourly wage of roughly $34.68 based on a 40-hour workweek. Again, assuming that these figures are most likely pretax, we know that the actual take-home pay is quite a bit less. Also, in this particular pay bracket, we can assume that this individual must come out of pocket to cover all or part of the government mandated health care expenses, thus leaving even less for discretionary spending and necessary expenses.

What Does It Cost To Live Alone?

In many areas of the country, a person earning around $70,000 a year can afford to live by themselves. They may even be able to qualify for a mortgage on a small place to live. This type of income would also allow you to purchase, insure, and maintain an automobile. If a budget was carefully managed, there might be money left over for travel and saving. Does this seem more like middle class living in America? If so, remember for a moment that this is the very top tier for a single American living in the middle class.

Temper this thought with the earlier stated fact that the share of adults in the upper-income tier increased from 17% to 20%. This means that really only one in five single Americans are able to comfortably live at or above this standard. Reports are constantly being published about the number of adult children still live at home with their parents. These reports tend to say that more adult children are living at home and they are living at home longer. Middle class for the young American is perhaps not what it once was.

The Middle Class Is Doomed : The Numbers Don’t Really Get Better.

The report goes on to give income ranges that define the middle class incomes for households of 2, 3, 4, and 5 people. Below is a graphic from the article showing those figures:

The Middle Class Is Doomed. Here Is Why.

If you take a few moments and peruse these figures you can draw some interesting comparisons. For instance, the low boundary of $48,083 for a household of four is almost exactly twice as much as the low boundary of $24,042 for a household of one. This would suggest that you can run a middle class American household consisting of two children and two adults on the proceeds of two full-time minimum wage jobs. Unlikely.

On the other end of the spectrum for a household of four is a figure of $144,251. If in this family of four there is a single breadwinner and a corresponding stay-at-home parent, these two visions of middle class are quite divergent. On one hand, you have a family where each parent is holding down a menial full-time job and childcare expenses are probably incurred versus the household with plenty of parent time and expendable income. I would posit that the middle class is truly much smaller than you are being led to believe.

More Equals Less.

Also of interesting note here, is that the dollar amount allotted to keep each additional family member in the middle class decreases. For instance, the difference between a household of one and a household of two on the lower boundary is about $10,000, and at the upper boundary, it is about $30,000. By the time you reach the differences between a household of four and a household of five the respective differences are only about $5500 and $17000. I bring this up here, but I do so to make a point further on. Please keep reading how the middle class is doomed, there are some surprising revelations ahead. These revelations relate to owning gold.

The Middle Class Is Doomed : Michael Brady.

When I came across this CNBC article on the Internet it was the title that drew me in. It was the first graphic that made me stay and read. Below is the graphic that was published on Yahoo finance with the CNBC article:

The Middle Class Is Doomed. Here Is Why.I grew up watching the Brady Bunch. To me they seemed like upper-middle-class, but hey. You may or may not agree. If you think that the Brady’s were middle-class, don’t forget about Alice the maid, I didn’t. Even the Cunningham’s didn’t have a maid. The Jefferson’s did, but they were definitely upper class. But let’s get back to the Brady’s, shall we? As you recall, Mike had three boys and Carol had three girls. Together they became the Brady Bunch, for a total of eight. The figures given by Pew Research don’t account for a family of eight. But, some more scratchpad math would put the low boundary figure for a family of eight to be considered middle class somewhere around $67,759. On the high end of this scale for a family of eight, the number extrapolates to roughly $200,277.

Michael Paul Brady (1933-?)

Let’s look at what we know about Michael Paul Brady. He was born June 23, 1933, and grew up to be an architect. Mike worked on staff under his boss Mr. Ed Phillips. According to the Brady Bunch wiki, Michael Paul Brady married Carol Martin in 1969 at the age of 36. Some other facts you may not know about Michael Brady are these; he was a City Councilman, and he was born in Monrovia, California. The Brady family lived in Woodland Hills, California.

Wages Have Been Relatively Flat While The Costs Of Living Have Increased Dramatically.

I bring these points up for reason. And I will also remind you that I’m not the one that chose to associate the Brady family with this article, but the association begs for some striking comparisons. For instance, a quick Google search returned results saying that the current median salary of an architect in California was somewhere between $74,520 and $88,030 per year. The $74,520 figure breaks down to an hourly rate of $35.83. Try raising a family of eight on less than $36 an hour in California. The Google search also returned information saying that some California architects currently only make about $45,000 a year and architect salaries top out at about $145,000 per year.

The Takeaway.

Perhaps back in the 1970’s a successful architect in his mid-30’s could support a family of eight, pay for a custom designed and built home, two new cars, and a full-time maid. But from what we know about Woodland Hills, California today, you can’t comfortably raise a family of eight and buy a house whether you earn $36 an hour or $145,000 a year.

Even though the Brady family is fictitious, these comparisons go to prove a point. What you might consider middle class is really not middle class these days. The middle class is getting smaller and smaller. As evidenced by the CNBC article, the upper classes growing, and actually quite quickly. As I pointed out earlier, the article failed to disclose the growth of the sector known as the lower class. I’m sorry to say that I believe that the lower class is growing faster than the higher class. This is why we need to talk about owning gold.

The Middle Class Is Doomed : Many Reasons.

There are many reasons that the middle class is doomed. I have written about several of them. Some of the reasons to blame include a fiat money system, intentional inflation, crooked banks, government mismanagement, and the like. All you have to do is look around the Internet and look around the globe to find real-time, today examples of financial systems breaking down. There are currently currencies crumbling and governments failing on every continent. Gold, on the other hand, is a currency that doesn’t rely on any single government or its promises. Gold is intrinsic wealth and gold does not become worthless. Silver and gold are the only currencies without counterparty risk.

When Michael Paul Brady was born in 1933, the official price of gold was still roughly $20 an ounce. By the time Peter and Jan were starting college gold prices would soar to over $800 an ounce.

If the fact that the middle class is shrinking to such a small proportion alarms you, call ITM Trading. After all, when Michael Paul Brady was born in 1933, the official price of gold was still roughly $20 an ounce. The price of gold would almost have doubled by the time he married Carol Martin. By the time Peter and Jan were starting college gold prices would soar to over $800 an ounce. If Michael Paul Brady was as shrewd as I think he was, he owned gold. And, somewhere in that tri-level Woodland Hills home, he hid a safe full of it. You should too. Call ITM Trading at 1.888.OWN.GOLD.