ARE YOU (actually) MIDDLE CLASS? | Income, Lifestyle & Net Worth USA vs. Germany
ฝัง
- เผยแพร่เมื่อ 15 พ.ค. 2024
- Go to ground.news/ashton to stay fully informed. Subscribe through my link to get 30% off the Vantage Subscription. I was curious, what IS the middle class anyway? What do they look like in Germany and the United States? How much do they earn? How do they live? What does that look like now and for the future of the middle class in the US and in Germany.
🔎 Video Highlights:
00:00 Introduction
01:45 What does it mean to be "Middle Class"?
11:36 Net Worth of the Middle Class
17:45 Middle Class Homes in the US vs. Middle Class in Germany
21:42 The Future of the Middle Class
Episode No. 136
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9kol
The middle class was defined by the wealthy as a political tool in order to get more people to support capitalism.
There used to be factory and land owners (capitalists) who earned their income from other peoples work and workers who worked in the factories and farms. These two classes defined "right" and "left" policies. The name comes from the seating in the French Parliament. Your loyalty was either with those who made money from owning capital or those who worked for a living. To persuade workers into thinking that they could benefit from capitalist policies, they were renamed Middle Class if they in different ways distinguished themselves from traditional working class. It could be wealth, income, education, job position or whatever made people feel superior. Many people longed for this upwards mobility and happily accepted the new designation and started to vote on right wing parties, against their own interests. If you make money through labour you benefit from labour policies, and this is valid as well if you are a white collar worker in a management position. Only capitalists benefit from right wing policies. This strategy has been taken further by enusring that everybody has some capital gains through stock ownership or pension funds. Thereby even workers need to suport capitalism, even when it hurts their interests as workers. The capitalist movement continue to recruit non suspecting workers by appealing to conservatism (fear of change), religion, traditional values, xenophobia etc.. with the goal to reduce tax on capital and reduce regulation of businesses.
Middle class has very little to do with earning somewhere in the middle of the heap. This is a political tool.
Interesting resource. I already use Allsides, but I'm always looking for more good sources.
I think that 87% usa middle class precption number is from a famious 20 year old study other graph u displayed had the usa with a middle class gap that was about 10%. That high number in the old study was attributed to 3 things one income and wealth inequality had reach catastrophically high levels yet and the way americans live mainly most people with some money basically all lived in their own suburb with a bunch of people that lived similar lives and had similar incomes and since the uber rich famiously lived in their millionaires row and the poor lived in the urban slums that must mean u joe citizen living in suburb x are middle class and in a time before internet connected everybody how would u know any differant. Finally even back then the cost of living variations in the usa were large today 50k in mississippi might be good money but in san fansico 50k means ur living in a tent unfer the overpass. Infact i saw a report recently that a single person with no dependants making 70-80k a year in much of the bay area would be considered low income and able to apply for benifits by cali eligability rules which adjust for cost of living.
@typeashton - there are scammers in these comments pretending to be you and asking to chat on telegram, fyi
I think this is fascinating. I live in the netherlands and i'm definately part of the poor, living on welfare level. Yet i have a cute small rental house with a garden, i have no trouble affording healthcare and i do go on holiday at least once a year (granted, only a week and staying in a hostel but it is a holiday). I don't own a car but i can get everywhere with my bike and public transport. There is lots of stuff i can't afford, but that's okay, as long as i can eat and get my nesessities. I also have 0 debt.
I am in the same situation. I am just shy above welfare bud do still get certain tax cuts. If I would earn more I would even go back financially before it would go up. I even have just enough money to both save for bigger cost items. And also not to have to think about every penny.
In a way the lower middel class might have it tougher then I do.
that's because your country was smart enough to set up a strong infrastructure where you don't need a car, and as far as I'm aware, your country doesn't operate on credit cards (please correct me if I'm mistaken). also, as you said you have free healthcare. in America, people think they have freedom if they have a car, but it's an illusion b/c in most places, there's no other way to get around. and even if you have health insurance, you can still go into medical debt.
@@MartianInDisguise creditcard are mostly directly linked to your bankaccount and not considered to place to create debt. I have a little more room as the posters here but still happy to be in a country where i know when all my health issues go for worse and i am a little less lucky we as a country will at least give some basic level to be able to live and happy to pay for this insurance the netherlands is not a perfect country and i don't envy less lucky than me but its good to read (and i know within my fam) you can enjoy life and it to me looks more dependent on person than anything else.
@@scb2scb2Bank card vs Credit card.... But youre right...
@@MartianInDisguisecar centric infrastructure is actually better than public transport. The issue is the price of cars in post CAFE fuel economy standards. They exempted SUVs , Pickups and Minivans so all automakers build are SUVs , Crossovers and Pickups 🤦♂️. We need 12k sedans again like the ford fiesta. Poor people should have the freedom to buy a low priced car again and drive anywhere they want. Cars like the fiesta got like 30-40 mpg and they were so affordable. I’m not anti SUV but when every car is an SUV they’re no longer as special 🤷♂️. We need to make at least 1/3 of car sales sedans, 1/3 SUVs and 1/3 pickups. Having 90% of all cars be SUVs and Pickups is too high percentage
In the US, 100k in one place is extremely well off, while in another part of the US, you can barely afford an apartment for the same amount. It varies greatly from place to place how much it costs to buy a home and how much you pay in taxes.
I work in IT and earn $100k in UK pounds sterling and it's considered a decent salary even in the more expensive areas (London/south east), but 'decent' doesn't mean great. Great salary means $200k+ where I am. I would add that the equivalent job I do in the US would make me around $150k a year.
@@tancreddehauteville764100k before taxes brings you to the top 10% easily in Germany. But still it makes a huge difference whether you have that in Munich or on the country side.
A problem when your country is nearly the size of a continent.
@@Lamentlogic It's complicated.
I can not stop being fascinated by the fact that there is a TH-camr who actually understands data and statistics and knows how to present them.
Ashton is great!
Glad you enjoyed the video. Thanks!
@@TypeAshtonYour videos have made it easier to understand German society and “income/net worth”. I am often discussing this with some German friends. Am I correct in thinking that your advanced education is in economics or finance? I would like to see you compare the US with Canada where the differences in lifestyle are smaller but government and social support are vastly different. Canada enjoys a social and healthcare net similar to Europe.
She has phd and is educated in a few countries. It, obviously, shows.
@@vg7985 There are other smart people on this platform and there are great communicators, but she's both, and that makes her special.
And: There is also a tremendous amount of production effort that goes into these weekly(!) videos. I find it pretty amazing.
Underrated comment! Should be pinned.
German speaking countries have an education system that is WAY different from the US. There are extensive standardised vocational training programs that start after high school. It’s called Berufsausbildung or Berufslehre. This generates a large group of Facharbeiter (skilled craftsmen). So for most technical and standard office jobs you don’t need a university degree in Switzerland, Germany, Austria. And yes vocational training is free. You even get paid for the practical work you do in your company (paid apprenticeship)
Absolutely correct. If we would analyze the "middle class" in D, A, CH, we would probably find out that most members of this group have a diploma in a craft. The apprenticeship system is IMHO the backbone of the industries and service sectors.
The dual vocational education and training (duale Berufsausbildung) is so good, they started that also in South Korea a few years ago.
We need that system here in the US
As a Swiss Canadian living in Switzerland, I chose Switzerland because of the vocational training that they offer. While growing up in Canada, all I heard was College, college and college. My four children all did the apprenticeship programs and have now fantastic beginning skills to earn their way in life. The Moto here is that „ no one is left behind „. I wish I could have gone through this system, it just gives so many young people more opportunities….
It's not a standard system in the States, but many high schools have career technical education which teach thing like welding or automotive repair. Most programs are 2 years and by the end of it, you are fully licensed to start a job in that field. You might only need to take your certification by the end of it. My brother did one in IT Services and got an Associates Degree our of it.
It's hard to say that I'm middle class without being able to afford a house, but I make enough to not stress about money while renting.
This is a really fascinating video! I've lived in many parts of the class spectrum during my life. My grandparents always had beautiful houses and for most of their marriage had the three H's, at least from what I could see. They both came from humble beginnings, had a nice long marriage in the upper middle class, and then my grandfather spent his last few years in a 55 and over mobile home park... living with my mom. Seeing my grandparents' fall from financial grace was shocking. Our family legacy, that we all expected to be there later, just disappeared.
Now that I think about it, their house was their biggest asset and they always ended up selling just a little too early. In their last nice place before the mobile home park, they made the mistake of buying a condo on a golf course and their HOA fees went from being $500 per month (when they moved in) all the way up to $1,100 per month and they could no longer afford the monthly costs.
As much as we value home ownership here in the US, it's important to make sure that investment is going take care of us in the future.
to me, if you're not worried about food and shelter for the foreseeable future, you're middle class. Lower class doesn't necessarily mean no food or shelter, but rather worrying about it. Even when I was a student getting 700€/month, I felt very middle class: I could even afford to travel
I think your definition feels right, but when looking at the media landscape and political influences, everyone can easily be classified as low income class. And when you get stuck in a certain bubble you will believe that.
I have heard that in some places middle class can have borrowed so much that one pay month is what's between going broke and have to move. I am probably low class but my family is middle class or something. So I don't even need to borrow money when I want to move into a big but affordable house and own it.
I think, you nailed it pretty much with that definition. Your actual household income doesn't matter that much, but the risk of sliding down is what divides middle class and lower class.
@@Alienshade most money that is borrowed is not secured. So a very long unemployment realistically means debt default and it is more a hit to the banks than to the individual.
your version is like the one I always heard middle class = not WORRIED about basic bills but NOT able to spend recklessly trips take savings OR debt and are NOT "cash deals" same with major purchase
As a poor student in a tiny shabby shared apartment, life felt interesting and full of chances. After nearly 30 years of professional activity, I‘m definitely middle class. Btw, I’ve never owned a home, and own only a very small car - but always more than just one bicycle. When I retire, I‘ll probably feel upper class - it‘s only the rich who don‘t have to work, right? 🎉
Hehe, we're in the same team. As a family of four with two academic educations, we do own a soccer mom van that takes us to Italy on vacation. But the public light rail takes us everywhere around the city, and I'm going everywhere and anytime on one of my bicycles, and I'm loving the freedom this brings to my life. I'm in one of Germanys 10 biggest cities, traffic can be annoying unless you're passing the traffic jam on the bicycle path. We do own our family home, and consider buying another one to rent out.
For Germans I think saying "I am middle-class" will usually be "no, I don't want to say, that I am rich".
Showing off was traditionally a bad habit.
Even the richest people in Germany don't show this to the public.
As about half of Germans have an apprenticeship there are many master craftsmen (and craftswomen) who run a small business and are very important for the economy and "Handwerk hat goldenen Boden" (craftsmenship has a golden floor).
In the US they call themselves “upper middle class” or “comfortable”. Like my family is upper middle class but we are actually MIDDLE CLASS. Quite often people who have like 800k a year household incomes claim to be upper middle class or “comfortable”. They are comfortable but they’re not middle class anymore. However to be fair to them some of the suburbs they live in require an income of 800k a year to purchase a house so maybe the price inflation of their local housing market just makes them think they’re middle income since they don’t live a very special lifestyle with lots of glitz and glam 🤷♂️
That's also why German companies hand out fancy company cars, so the bosses even fancier company car doesn't look that much better.
This is similar to the thinking in Japan where I am currently living. If statistics were based on self-perception and questionnaires, the Japanese would consider the entire country 100% middle class. 🤣
Interesting what you mentioned about apprenticeships in Germany. In the US, trade schools used to be considered a viable option for high school graduates as much as college and was discussed more and encouraged. Unfortunately, many high schools now push college and don't have as many technical classes offered anymore, such as wood working or automative training. It's a shame b/c many students don't want to go to college and are unsure of what to do after high school. If they had more exposure and encouragement, I think many would choose the route of trades/apprenticeships. Many craftsmen/women make more than college graduates.
@@kristinab1078 I think there will be a comeback of trades. A lot of degrees simply are worth as much as they cost in the US.
@@woodywoodverchecker I hope you are right. I also think there would be fewer dropouts in HS, especially among male students, if there were more opportunities in school to learn hands on skills.
Lower Lower: Jail or Homeless
Middle Lower: 100% dependent on government
Upper Lower: Partially dependent on government
Lower Middle: Not dependent on government, but rent or owe more on their home than they have in assets
Middle Middle: Own more in assets than they owe on their home
Upper Middle: Own 2 paid off houses
Lower Upper: Don't have to work, but work because they want to. At least 2.5 million in assets
Middle Upper: At least 10 million in assets
Upper Upper: At least 100 million in assets
It's always weird as a Brit hearing middle class being described economically. Here it's strictly social, as seen by the low numbers describing themselves as middle class. The layer below aristocracy and above the working class.
If you switch aristocracy with capitalists (people who can sustain themselves by capital gains only, and don't need to work) it's not that different.
I agree with the first part of your comment "It's always weird as a brit" 😂🇬🇧
@@johanneskurz7122In the UK it's about class, not economic activity. You will find lots of people who identify as working class are financial better off than those who identify as middle class . It's very complicated and deep rooted.
@@ogribiker8535I think a key part in Johannes‘s point of view (but not mentioned explicitly) is that „class as in aristocracy“ is not a good measure for comparison - because most countries simply do not have aristocracy to a degree even remotely similar to the UK (think „House of Lords“, …). For example, there are still some people holding aristocratic titles in Germany, but in daily life, that does not play a role, except perhaps for the most rich ones; and in fact, many titles may no longer be relevant because while the title was retained, the actual holdings (e.g., now in Poland) no longer exist, or at least do no longer belong to the „family“.
Accent plays a role. Socially Brits cannot cope with Australians whose accents they can't place and with a lingering suspicion they have convict blood.
My experience living in the US is by no means typical, but having recently retired, I've been watching video presentations advising retirees how to manage their finances. Two programs were of particular interest to me, because they began by determining which economic class you belong to (lower middle class, middle class, upper middle class, upper class, and wealthy). As in your presentation, these rankings were based not how one lived, but by one's *net worth*, which is a much more reliable metric. I had always assumed that with a fairly average income and not a lot of expensive things, I must fit squarely in the "middle class" category, just as my parents had. Imagine my surprise upon finding out that according to both ranking systems, my net worth actually places me well within "upper class" group (people with a net worth in excess of $700,000). The only higher category was the "wealthy" class, whose net worth was estimated at 1.3 million dollars or more. When I hear the words "upper class", I picture people who drive expensive cars, live in large homes, own a nice boat, etc. But it turns out that despite their lifestyles, many of those individuals have a net worth far lower than mine because everything they own is heavily financed. If they were to lose their jobs, they would lose their homes and have to liquidate all their other assets in order to pay off their debts. By contrast, the only debt I've ever incurred was a mortgage on my first home that I paid off in just 11 years. I have never since purchased anything on credit, lived pretty frugally, and I've plowed nearly all my disposable income into the stock market for more than 30 years. That enabled me to retire early and have a retirement income (including social security) which is more than _double_ the amount that I made while working full time. Anyone can do this, it's just that the vast majority of Americans seem fixated on accumulating material possessions that they really can't afford. It also explains why so many high income types _can't_ retire, and expect to be working until they're no longer able to, or simply die.
reminds me of a story I was told about LEHMAN brothers when it went under and a LOT of there traders all had paper worth well beyond 1 million but were also absolutely wiped out when LEHMAN went under as almost ALL of that "value" were shares and bonds TIED to Lehman brothers and to live in NYC / LONDON ETC - to the life style they "expected" they would "leverage" against these assets that became worthless and the debt existed leaving them with little PAY/CASH and MASSIVE debts leveraged against garbage
The American idea is that you work until these is no work then your expected to die some out of the way. Like the woods.
@@jasonriddell not really a risk when you own a broad base of equity rather than concentrated Debt obligations. Every responsible financial advisor will tell you to diversify.
This is what I have been doing. I will retire wealthy despite never having an unusually high income. compound interest and living below your means is SO powerful.
Yeah... but there's no guarantee that a person will live long enough to retire, or that they'll be healthy enough after retirement to enjoy the activities they want to enjoy. There are some experiences you can't really get in older age. Plus, there are things a person might really want to do in their younger decades, that they will simply not have any desire to do when they're retired. I think it's risky to put all of your eggs in the retirement basket. But sure, if someone doesn't WANT to travel, ski, eat out with friends, go on vacations with family, try new foods, go to concerts etc. then more power to them.
Your name says it all. If you go to work and your name is on the building, you're upper class. If it's on your desk, you're middle class. If it's on your shirt, you're poor.
…now that got me chuckling. Don’t have a building named after my family but I live on a street named after my Grandfather and my sister’s home is named after my Gran which is a block away. I should rebadge my place as an estate like my neighbors do.
I'm french, i feel myself in the middle class, and for me owning my home is not a criteria to define me as middle class. It's more my "purchase power" : can i buy what a need to live, to eat, to wear, to travel, to entertain, and trying to save for non predictable incidents and for extra retirement... Without having to make a huge attention at all costs. As i'm protected by healthcare, health costs aren't an issues, allowing to be relaxed on other expense. I feel myself comfortable, and lucky with my revenu. But Are your sure about your numbers, didn't it mixed median and average/mean incomes ? I've read other official sources that show a median income about half the numbers you noted for Germany (France is close by the way). Median is not the mean.
What is your tax rate
Sounds like being French is really nice
42k as a median income in Germany sounds pretty realistic. Half would be 21k. A full time minimum wage job in Germany is around 26k, the median household income being considerably below that is hard to believe, since that would mean more then 50% of households living on less then one full time minimum wage salary.
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@@eechauch552242k for full-time as median is more or less correct. Average is more in the 50k region which shows the gap of minimum wage vs high payed jobs.
Being middle class does take more money in the US than a lot of people think. Car dependency, expensive higher education, expensive housing, expensive health insurance, (depending on who one works for), expensive home and car repairs and saving for retirement because Social Security benefits may be insufficient all contribute to people's inability to save money substantially.
The way things have been past 40 years, middle class in US is greatly under attack
@@mathisnotforthefaintofheartThe way things are now we are about to see a lot of social unrest. I really don’t understand how congress expects to get this generation through the next 2 decades.
You are missing out the entire German field of skilled trades and their steps of education, from apprenticeships through to master's certificates (without which you may not work as an independent electrician, mechanic and a thousand other trades).
The skilled trades structure is more important to the German Wohlstand and the middle classes than a university education - particularly as becoming a master takes many years and involves learning such things as business law, employment law and man-management and many other aspects of the discipline that a mere graduate only comes across far later in the work-place.
Also, many apprenticeships require today a high school diploma (Abitur) - for example Mediangestalter Bild und Ton - in order to be accepted.
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As a swiss trained Canadian tradie I can tell you that the German skilled trade system has its limitations. It's extremely bureaucratic. In Switzerland as soon as you receive your certification as a journeyman carpenter, you can immediately start your own company, if you can prove at least two clients, and basically find your niche and prove your worth on the free market. By contrast, in Germany as a freshly minted journeyman you have to request to the Handwerkskammer (a guild) that you are going to do a 'masters' within a certain amount of time (let's say one or two years), which either involves I believe four modules split up into evening and weekend classes, woefully inaccessible to people living in remote countryside areas (like me). At best, one can get a stipend to do a master's full time, in around 6-8 months, but regardless the entire process is a heavy burden on a private person, both financially and in workload. Without a masters, you are unable to get the guild's blessing to practice your trade and therefore in carpentry terms are relegated to installing industrially produced goods like kitchens or doors or awnings, as opposed to proving your worth on the market. In my opinion and experience, having a masters is not necessarily a guarantee of competence, but rather as is the case with all trades, motivation and experience are. This opinion tends not to please people who are convinced that proving your mettle through the masters is a guarantee of quality. On paper the masters is certainly an attractive qualification. Unfortunately, it also is a large bureaucratic and financial hurdle for individuals to surpass and thereby makes the flourishing of small scale workshops (in the case of carpentry) more difficult than in, say, Switzerland. In Germany, political support for industrial-scale production is obviously higher as it employs more people, which in turn drives prices down for handmade goods and services from local tradespeople. The irony is that in Germany, the guilds shout from the top of the highest tower that they are protecting the quality of the german trades, yet the climate to which they contribute is one where tradespeople are disappearing because of poor wages, low professional and therefore social mobility, and high levels of bureaucracy. Jobs in big industry make way more money. Why work your way up to foreman when you can study civil engineering and get there immediately? In Germany, on a tradesperson income, it is not uncommon to also need state subsidies to survive, despite full time employment. Despite the obvious practical benefits of even having the option to benefit from welfare state luxuries like housing subsidies, the reality on the ground is that because of this, the trades in Germany are hollowing out, because young people can't see a future in them.
@@pilzli6962 I absolutely agree with all that for carpentry - and gave your posting a thumbs-up! But when it comes to other trades, the masters' system benefits some and hinders others - and protects the public from rogue cowboy electricians. Just don't get me started on German chimney sweeps (a bloody law unto themselves!)
But the German trades system is a very complex subject and probably much in need of reform.
I'd add that an Abitur is much wider and expansive education than a High School Diploma. High School is more comparable to a good Realschulabschluss. The stuff I learned for my Abi was part of college curriculums in the US.
Spot on!
So the take-away is, once again,
- most people *need* to and *must* work,
- having and hanging on to a manufacturing industry is mandatory, not optional,
- that manufacturing industry needs to remain diverse - once a job has gone offshore it's not going to come back,
- service industry as a successor to manufacturing is a red herring. Even Walmart can only employ so many greeters.
There is a wisecrack I have read some time ago. It is a bit difficult to translate, though. You are "wohlhabend" (prosperous?) when your income reliably exceeds your expenses. You are "vermögend" (wealthy?) when you don't have to work to achieve this state of personal economics. You are “reich” (rich!) when you need professional help to keep track of your assets.
The first category (and maybe a half) would also make a definition for middle class. Of course, this is also relative, as you have already pointed out. One can be middle class or even "vermögend" on a somewhat lower income, and struggling as a higher income wastrel. Middle class is also a state of mind and of aspirations.
A nation can actually be highly prosperous without much manufacturing at all. Your is an Industrial Age model of economics to think domestic manufacturing is necessary. If the nation provides enough skills training and is very innovative about services, financial services, tourism, creative sector, high level engineering etc they can thrive without ANY manufacturing. Like how the US enjoys a hundred thousand high paid jobs for Apple corporation while none of their products are actually manufactured in the USA - all of those Apple employees make much much more than they would if they were merely working on an assembly line. UK thrives by providing the World with financial services, employing hundreds of thousands in 6 figure high value added jobs. Hong Kong, Singapore, Norway these nations have precious little manufacturing yet higher std of living than USA or Germany. Because: we live in the Information Age.
@@planesandbikes7353 Seriously? The shady finance service industry is doing such a whole lot of good for the overall UK economy. Yeah, sure.
Apple? Sure. Doesn't help the millions who used to have well paid jobs in manufacturing. Besides, a 6 figure income isn't all that great in Apple's neck of the woods either, if I understood some of Ashton's past videos correctly. Of course, for every Apple engineer at 177k US$ there are how many customer supporters at 74k?
Hong Kong (pop. 7.5 million), Singapore (5.9 million), Norway (5.5) are outliers with very specific conditions. Switzerland (pop. 8.8 million) is also doing great with a lot of manufacturing going on.
not sure how you arrived at your takeaway since Ashton did not mention any of those things. I am not say that you are wrong, necessarily, but your point of view is not at all mentioned in the video. I personally am a great fan of the idea that the people who make things should be compensated well. this includes farmers without whose labor we would not be eating. i am talking family style businesses with less than 20 employees. They are hard up against the pressures of the big producers.
As an American, life experience and observation has shown me that our “education” system is at the very core of our problems. Be it earning expectations after college, work required to achieve middle class income, or lack of actually knowing how to do anything with our hands. Removing vocational classes out of our high schools has been one of our greatest mistakes educationally. We have pushed our children into four year universities whether they could afford it or were ready academically ready. The parents are usually the ones to incur the loan debt thus removing a large monthly portion of their income.
As an Expat in Sweden, most services are done correctly the first time because technical training is available to anyone that wants it. That means less time and money lost to bad services. People don't get hurt at jobs as much or from faulty repairs. Those "high taxes" to pay for fee free education are well worth the money to the society.
Plumbers, electricians, and HVAC workers do very well. Some of the kids are catching on that a useless degree with 150k debt in their early 20s isn't necessary for success.
I love your videos. Geuinely interesting questions and great stuff. And you're just briljant in them, you do this so very well 🙂 When you say "really interesting, you're eyes sparkle with enthousiasm."
Ashton wieder! 🤘👍🫶
Congrats. Excellent work..
Thank you! Cheers!
Good analysis. I always enjoy your Sunday videos. Stuart Bonning Maryland
Much appreciated! Thank you.
Balanced, well-informed and well-explained. Thank you
Balanced? She totally misrepresented the usa and seems to have a boner for Germany. She should just move there if she hates the us that much
Thanks for another great video!
Glad you enjoyed it! Thanks for watching!
at least in The Netherlands remaining middle class also depends on strenght of family network. Much more than in the US. You might not on your own achieve all these markers, or maybe work in a low paid "passion" field, but your family (wealth and network) will provide the Housing and fund the Higher education of the grandchildren. Health is a universal benefit, so doesn't signify. Germany might be similar.
Your parents being middle class is the biggest reason for you being middle class everywhere I think. Even here in Sweden where education and healthcare is pretty much free. Houses are very expensive unless you live far from larger cities. If you don’t have parents that can help you get started it’s very difficult. If you live in Stockholm then an apartment can cost well over 100k euros just in the 15% you by law need to pay out of pocket here. You are only allowed to borrow 85% maximum. Personally I moved to a small city of only 5000 people to find a home where I only had to save up 12k euros for the 15% but even that requires help by borrowing from my family. Edit: Down payment I believe it’s called in English. What you need to have saved up and you can’t borrow from the bank.
Yes you are right. Its true fur all around the globe @@wertywerrtyson5529
@@wertywerrtyson5529 Houses expensive in Sweden? HAHAHA! Median in Sweden is like 44500 SEK per square meter or 3900Eur. We in the Netherlands enjoy a nice median of 5600 Euro. Our houses are 2.2 times more expensive than yours. And we earn less and pay almost exactly the same % tax :') Mate. Your houses are cheap as dirt. It's so cheap we're seeing a minor exodus from the Netherlands to Norway/Sweden :') I'm actually considering it myself. I earn 3500 per month (38500/y) and I CANNOT buy a (ruin) starter home. Literally nothing on the market I can get with my savings and the best mortgage. Not even outback in the countryside in the least popular areas. It's actually insane.
That means your poor sis 💅. If you were actually middle class you’d be able to afford your own single family home and your own college and to have your own spouse, 3-4 kids and 2-3 cars. That’s a standard middle class existence. In the US it’s been stolen from us by Biden and the democrats 50%+ inflation 😒. Your parents being middle class doesn’t make you middle class
Sorry this is one big NONsense. And no Netherlands does not earn less than Sweden and yes Sweden is considerably more expensive and yes , houses in Sweden are not only expensive but also old and not worth the price. And no , healthcare is NOT free in Sweden , each cent is paid through a forbiddingly expensive tax system , and yes Swedes are CONDITIONED to see these taxes as " normal" to them , equally in the other Scandinavian countries" but give me Netherlands in AlL Its aspects , except the size of the country. Swedes are born to look all the same direction , shut up , or be bullied, a perfect system to remain asset rich , relatively , but a life long cash STRAPPED. Ja , jag har lärt mig några saker om Sverige i mellantiden....
As always, an interesting question, and an interesting video. I think the difficulties in defining and analyzing the middle class have probably been left deliberately. People are more easily manipulated when all they can go on is how they feel. They are also more likely to consume and put on appearances when they feel that they are not enough.
Excellent video. Subscribed. It is nice to see someone who understands and can explain data in an entertaining way!
Thank you so much for the sub! Great to hear you enjoyed the video.
In Croatia more then 95% ppl are homeowners. Ppl rent when going to colege or 1-2 years until they save up for a down-payment.
Healthcare is universal, meaning everyone is equally insured and high education is free if you don't fail a year all up to masters degree. Seaside is really close and there are busses running day long excursions for 20E a person. Meaning anyone can take a days holiday that way.
So by US definition we are almost all atleast middle class. Ask ppl and some would disagree.
Especialy Croatia became a sucess-story since the end of the civil war in yugoslavia. So its no wonder that they prosper.
@TOFKAS01 ah, you still have ppl who live in remote areas living in poverty. But as a positive example when a massive earthquake hit Zagreb in 2020 many poor were left homeless. City stepped in and gave out rooms in city owned hostels (remnants of socialist era) and set goals to fix buildings with help of EU money or provide city owned apartment at controlled rates pretty much indefinitely. There is noone camping in the park. And I gladly pay my taxes to ensure it stays that way.
My wife and I come from humble mean families in socialist past and today we are upper middle class even by western standards. High class in Croatia. I'd rather pay more taxes then compromise security by having poor hungry ppl in the streets. If not altruism, consider this caregiving for selfish reasons. I firmly believe no one in rich countries should be left hungry in the cold.
Thanks again for this ❤
My pleasure! Glad you enjoyed the video!
Ashton I love your channel and i enjoy your well-reasoned analyses. I sunscribed 2/3rds through this video.
Awesome! Thank you!
We need to talk what secondary and tertiary education mean in a German/Austrian/Swiss context compared to US training on a job, community college education/vocational school and a "college" degree...
Even in Serbia BCs is "you failed to finish Faculty" diploma and MSc is kind of "you lucky bastard that didn't had to obtain Diplom. Ing. diploma but this stupid level for idiots which covers 2/3 of Dipl. Ing. for more years of studying and no multisemeter exams, no oral part of exam and doing only tests like Americans"
Hey Ashton, I hope you and Jonathan were able to celebrate the Bundestag's legislative decision on Friday!
We did! I'll be making a video about it next Sunday.
Looking forward to it!
really good. well done!
Well done!
Great video!!!!
It's interesting to think of classes in terms other than economic. The social perspective makes total sense, too. Based on the Middle class scale shown in the video, we would probably be classified as lower middle class. And we do consider ourselves as such, even if for just the social context; we own our home (2 actually), 2 vehicles, and can afford a vacation once a year. However, 5 years ago we relocated to a state that has a considerable lower cost of living, and even with larger salaries we often find ourselves struggling more than we did
Anyone who owns multiple homes is rich af, anyone who owns a single home over 2000 sf is also rich af
Our second home is a rental property, not any type of vacation home. We were unable to sell it so we rent it out. And neither house is big either lol@@drtyhay
Very interesting video. Sometimes a bit difficult to follow when it’s not fully clear if the numbers are adjusted for purchasing power when comparing between countries or if the figures are expressed in nominal or real terms when comparing over time. Effects can be substantial.
Very informative video Ashton, thank you!
I aspire to produce high quality educations content like this and I really like your setup. If you’re willing to share, What camera and mic do you use?
It is really interesting. If the families you refer to are households, then transitioning to more single-person households could easily imply that household income and wealth are decreasing, while individual income and wealth are on the rise.
Middle class is all about living within your means. No extras. Minimal luxuries. Of course, it seems there are many debates on what is considered a luxury.
Great video as usual, Ashton!
Glad you enjoyed it!
Excellent information.
just a few aspects defining income/wealth:
- every German (as opposed to Americans) is born with a minimum lifetime income/asset called Bürgergeld - if you put the monetary value of this at only 1000.-/month, he has a net worth of 80 (years life span) times 12 (months) times 1000.- Euros = 960.000.- Euros *from birth*!
- now add free education including tertiary education in Germany, which easily adds another 250 grand, if you compare it to American individuals and their costs to finance the same.
- and then there is retirement costs: Americans have to save up for retirement, and these savings are counted as assets when calculating their net worth, whereas in Germany, at least the entitlement to staatliche Pension is not counted as assets.
so, in this comparison, we are also runnung into the same difficulties as you did when comparing incomes (which, by the way, you did a really great job at!)
@peterkoller3761, *Income* is not wealth. Pre-retirement *social security handouts* are not wealth either.
Depending on which study you look at, accrued claims on pension systems are actually counted towards net wealth as well. That includes Beamtenpensionen and Deutsche Rentenversicherung as well as US social security pensions and 401(k)s. Or not. That makes those comparisons so ambiguous. One needs to read the respective fine print. Studies that do not elaborate on the details are typically biased towards a specific political agenda.
The Burgergeld only exists as long as the state can afford it, so only works as long as everyone else is not using it.
The Burgergeld only exists as long as the state can afford it, so only works as long as everyone else is not using it.
@@stefanj1610 of course social security claims, if you are legally entitled to them, are wealth! they are basically the same as if you had that same amount you are getting over a life time sitting in the bank nd taking it from your account in monthly installments.
@@Zelielz1 so? your money n the bank is also only safe as long as the currency doesn´t crash oder bank doesn´t go bancrupt.
so if we go with your argument, money in the bank isn´t wealth, either.
Social permeability has definitely taken a hit. There is a psychological effect that one weights only their own problems and is not aware of the struggles of lower classes - because it's not where you want to be going, you want to be going up. And so each class is looking above and using their means to bring attention to it. Higher classes have more social and economic capital to highlight their issues and we can see an ever accelerating swing in favour of the wealthy (taxload, education accessibility etc.) we can see an acceleration in the economic division.
Wow! Surprisingly good content being recommended. Most financial related videos are garbage and fear mongering. This was such a good video!
Great Video!
You live in a house (rent or your own), have a car, you dont need to buy the cheapest grocery, you have a health insurance, you can provide any education for your child then you are a middle class. If on top of this you can still go on vacation and save some money on side you are a higher middle class.
This is my own definition i will use on any country.
In Germany nearly everyone has health insurance, and education is free. Homeless people are few. Those who do not own a car often do this because it isn't necessary, e. g. in a big city, but some can't afford (40 million households of 83 million people own 50 million cars). - I would estimate 80% of people would meet your criteria.
My experience is that in the US expenditures swing much more than they do in Germany on a monthly basis, and you either have the built-up reserve, to plan for those swings, or if you don't, it leaves you very exposed financially, exposed in a way that I just did not ever have to consider in Europe. Healthcare is the obvious cause and example, but there are many others. If a household with four adults (two parents, two adult children, still being supported) needs 4 cars, there is more variation to be expected than in a similar household with one car and 4 monthly bus passes (and that is just the financial side, not discussing the environmental footprint here). Education costs vary every year as people choose new career paths, jobs are less secure, and so temporary loss of income is more likely. But there are other things. Fluctuations in tax law with major implications for a specific household are much more frequent (your annual property tax just increased by $ 4000, due next month, oops - that kind of stuff) , your gym was bought out, now your annual costs are $ 450 higher, here is the bill. Every once in while there is a windfall, I just got a $ 1800 check from the dentist, because the insurance had actually paid more than had been assessed, occasionally a bonus gets paid, or a financial investment pays out something. it can happen, once in a blue moon.
But the bottom line is, the reserve you need to build up, to deal with these 'constant surprises and swings' is completely different than it was in EU. Granted, I then did not have to multiply it by 4 yet, as I have to do now, but here it seems, that every month there is something. And if one month there is nothing, well great, there is some extra vacation money or something. Inflation adjustments were a more recent addition to the mix, but they are more a constant additional burden by now, as we all had to adjust to the new price level. What remains is the fluctuation in monthly spending, and the level of it. Also, our income in the US, even in the normal professional world, is more bonus dependent than it was in Germany. In Germany, you had your 13th income (predictable), and then a smaller bonus of something less than a month's salary. Here in the US, my bonus was a month salary in a rather bad year, but it was over 100 % of my annual salaried income in the fattest years of my career. Those are huge swings, and people I think are generally not able to handle such fluctuations with the right level of level-headedness, pre-planning, and farsightedness, when it comes to planning their own future.
You add to that, that the mega health care bills, i.e. car accident, cancer diagnosis, etc., as well as natural catastrophes (hurricanes, tornadoes, large fires, etc) can totally uproot even ever so prudent planning processes. You do live with more risk here in the US, and that does add a level of stress to life in general, and may take certain people out of middle class and into poverty levels much more quickly than it could happen to you in Germany. And I would say that most of the working poor in the US, fall into this category, where they lost their houses and/or jobs, and their secure middles-class existence suddenly was turned upside down to land them where they find themselves now.
You don't need any of that in the US. It's just Americans have a very high income level even compared to Europe and have extremely high expectations for material standard of living.
For example outside of US/Canada/Australia, what middle class expects to own a single family home with ~2700sqft(around 250 m2) of living space, a yard, and a garage in a city? In basically all other developed countries this is pretty much reserved for the upper class. Middle class live in small condos and townhouses.
I started my careers as a drafts person with a two year degree from a community college. The pay was not terrifically good but it wasn't at the bottom of society. I was in heavy industry and soon lost my job. I returned to college & got my bachelor's in engineering. I then got a job in a sales & marketing depart and did extremely well but I found the job not challenging and boring. I was doing product cost estimation & pricing. I then worked myself into a product and cost estimation and pricing job in several small companies. I moved onto several heavy machinery companies and continued to both design and cost estimate
Hi Ashton, great video as always.
Have you read the New York Times article "The Great Compression" (17Th of February) about the shrinking of the average house size due to increased housing costs?
I can image you can make a great video out of this topic. 🙂
Thank you, Ashton! As a German I'd like to add the following.
Rental prices in Germany are exploding and this is hitting the lower income groups in particular, who usually have to spend half of their net income on rent. This is a form of impoverishment that affects the reality of many people's lives but is hardly ever discussed. Especially by politicians.
Yeah, hard working people from south and east eu countries are crammed into overpriced rooms, unable to find a flat while Mutombo lives comfy in a free 60m2 apartment while dealing drugs and taking unemployment benefits from the state👍
Perspective is soooo important.
My parents consider themselves as middle class, but they are retired and by income they are clearly in the low class or lower middle class. But they have assets, so they can still live a comfortable middle class lifestyle.
In stark contrast, my wife and I technically broke into the top 10% of household income for our local area. But we were in debt for a long time, and have little in the way of assets, so while our income is high at the moment, we would still consider ourselves middle to lower middle class for our area. If we can keep that income up over time we would break out of this. But at the moment, 1 year of high income doesn't make us rich in spite of technically putting us in a higher class.
Point is, when looking at defining "middle class" you need to average income out over time, and weight assets over income as people age.
Another huge issue is defining a person's class by their lifestyle. Out plan is to break out of the middle class over time... But we don't value having a fancy house or new cars. Both of our cars are more than 10 years old, and we aren't planning to replace either of them any time soon... But they are paid off. We have an older 1950s home, but as our kids age and eventuallyove out, we aren't super motivated to move into a newer, nicer, larger home. My house is my hobby project, so moving into a nice new house removes a lot of my hobbies. So even when we break out of middle class income and assets, we will likely retain middle class lifestyle.
Put another way, we will likely break out of the middle class by remaining middle class. While my peers are upgrading their homes and cars... I work from my basement and don't drive much, which frees up money to put into other income assets instead of adding liabilities.
To be clear, there is nothing wrong with having nice things, as long as you value and use those nice things. I will always have the best phone, and computer, and network and server equipment in my house because I value and use those things. But most people will buy a cheap laptop and a midrange phone every few years, because they have different values. And that is totally fine! I think the issue that holds people back is that thry don't focus on having a few nice things, so they want the best (or extremely good) versions ov everything... Which frankly isn't middle class. Middle class is a few nice things, or a lot of midrange things... You know... The middle. It is trying to afford this upper-middle to higher class lifestyle which prevents the asset buildup required to remain in the middle class long term, or which prevents or delays the ability to retire. I don't want to work forever, so I have stopped expanding my lifestyle until I can afford to retire at the lifestyle I have. Once I achieve that, then I can retire a little early, or expand lifestyle and keep working to support retiring on that expansion. But knowing and acting like I am middle class is what allows sustainability or breakout. We all just need to stop pretending we are something we aren't.
Congrats on your differentiated view as well as your professional success.
Understatement is a very healthy and in the long term wealthy habit to keep.
We also see a lot of people living on their financial limit especially during low intrest rates. But it comes at a price: You have to keep on running instead of building safety.
Very informative. Thank you :)
Glad you enjoyed it!
I think the middle class should be determined by looking at cost of life vs. income (purchasing power) and not a scaled metric like "median income level", because income level does not necessarily determine lifestyle, cost of goods, services, and products determine that. I think this is why many people associate "middle class" with "ability to purchase a home".
a secondary cohort is "readiness/potential for retirement", which could be used to help define the upper boundary of the middle class. you somewhat touched on this.
in any case, i really enjoyed this video, the first of yours i've ever watched. subscribed, thank you for publishing, looking forward to more!
Middle class is a function of net worth - having a net worth of $2MM and an annual combined gross income of $500k… coming from blue collar income families, we didn’t marry until we both attained our master degrees and had both started and then progressed in our respective careers… we didn’t even consider children until 10 yrs after marrying, now in our late 50s, our children are in early into their college and late in their HS careers, respectfully . We consciously chose to delay the “normal” early marriage milestones, so that we could rise above the “norms” of the social-economy demographics in which we grew up, thus altering our family’s go-forward economic trajectory….
For me as a 35-year-old with my partner in the bacon belt (kann man das so sagen?) of a conurbation in Hessen Frankfurt, it feels strange to be in the top 10% in terms of income but not be able to afford a condominium or house. We now have to save up some equity and we are happy to be one of the lucky ones who can.
But others our age can't, rents and basic expenses for food etc. keep rising and rising and eat up every pay rise...
Although we have better jobs and higher wages (adjusted) than our parents, we couldn't afford a house or apartment in the same street. This poses real social problems in Germany, as only very few will inherit.
And thank you for distinguishing between income and assets. Sometimes I miss that in German discussions. Because the really rich people in Germany have inherited assets or wealth and didn't get rich through income!
Great video, as always!
Our economy has evolved so that produce from farm and factories has become much more affordable than our parent's generation,
Eg. an electric drill will take the carpenter 5 weeks of income to buy back in the 1960s, now it probably takes 1-2 days of income only.
But assets like housing has got so expensive that most of us are effectively priced out of the market due to the low interest rates and relative stability since no major wars has happened since WW2.
Health/Education/Food/technology has gotten a lot better, but the asset/wealth bubble has made most of us unable to afford our own place other than waiting for inheritance
Simple, stop wasting money on expensive cars and holidays and start saving,
@@tancreddehauteville764 let me guess you are an american fellow? ;)
here is my advise... travel the world! btw.. we don't have car...
Great like everytime! 👍
Hello Ashton, this was a great video.
Glad you enjoyed it
Hello, a German here. I live a little bit to the north of you close to Heidelberg. First of all i wanted to say thank you for all the videos you made so far, keep up the great work. I stumbled across this channel about 1,5 weeks ago and now watched a lot of the videos. Thanks for all the data oriented comparisons, also the family stories are simply adorable and fascinating. Now regarding an aspect of the video: Germany has a good social and healthcare net. But I think the whole retirement system is deeply flawed, as it basically only distributes what comes in to the current retirees. For years the system needs to be stabilized by tax money (this is actually the largest single position in the Bundeshaushalt every year). I don’t understand why my fellow German millennials accept this system, after all we pay for something that we likely will not get anything out of. At least I’m pretty certain that this system will implode in the next decade or so, when most of the Boomer generation is in retirement. At least if there not substantial changes to the system. To me this also means the whole net worth calculation for Germans is deeply flawed. Also the reliance of Germans on saving accounts is a big problem. We overvalue security and have to low of a yield, which forces us into higher saving rates. In that sense I think it is a good thing that Americans are more reliant on the equity and properties (it they can afford it in the first place of course). I would love to have something like a 401k. There are way to few Germans investing into stocks, for instance via diversified ETFs or building another way of retirement income, as it is also not really supported by the government.
Spot on!
I agree with you Mate. I invest to a private German 401k. The system needs a reform in order to ease the burden.
There will be no easy way out. Our parents rely on our payments. We will give more than we want to and they will get less than they hoped. Just no black magic in there. Just the question of: who will suffer more?
*The "class system" and the "caste system".*
_Both are used to "divide and rule" people._
Catogorize people in a "class," set them up against each other, create tiers of classes, and if you're in the _"dividing class,"_ you're set to go...
no, thats not true. social class and inequality is the consequence of the variance of capability that comes from genetic variance and statistical success successively accumulating over generations. thats what causes stratification of society. is really the result of natural selection and lack of dying out of the loosers from each generation.
the caste system was implemented to prevent people of low genetic quality to poison the people of higher quality with their genes, mental illnesses, genetic illnesses, and destructive habbits to not collapse the societal progress over generations.
Yes this is heavily abused to rule people, however erasing the division is the worst thing you could do because it poisons the capable and destroys any progress that was made.
really, the ruling class wants to infuse the bad manners and genes into the middle class to lower them back to have a ruling and slave class duality, and to prevent people from collectively threatening the ruling classes power.
additionally, every generation and every influx of genetic heterogeneousness increases stratification until the gradient is so big that the society collapses because there are too many people who are not competitive a tiny percentage of capable people can not force feed the incapale anymore.
the only solution and the moral solution would be to make sure that the lower class is not able to reproduce and multiply, which is as simple as not giving them any wellfare beyond keeping them alive. additionally, people should be divided by class as much as possible to preserve the generational progress in collective capability of the successful people of each generation.
if we did that, we would have paradise on earth. no crime, no poverty, only smart, healthy and good looking people, illnesses would did out naturally, astronomical progress, and nobody would have to work. all our problems would vanish over night.
preserving competence by division is good. erasing it by lack forced non division is the most evil thing you can do. collective standard of living is proportional to the collective competence of the people in a society, and this competence an skill is biological in nature and comes form natural selection.
thats why all animals in nature look beautiful and you can not tell them apart. they are all the result of natural eugenics.
what you are saying is marxist propaganda that is marketed towards lower class people to use the lower class as a weapon to erase the middle class and make them both slave class by eroding the genetic progress accumulated from the last generations. basically they get you to envy the the more capable and dilute them out of envy to make them dumb enough again to not be a threat to the ruling class. by advocating for non division, you are effectively killing of your potential saviors out of the ruling classes tyranny because you envy them. thats how they rule, and they control the media and governments to brainwash the lower class to get them to do it for them. the communist revolution was exactly that. the 100 million russians and chinese killed by it were the smartest of them because they owned more than the people who killed them. thats why russia and china are in the place they are in now.
Another excellent analysis as usual. It’s a shame that the general media doesn’t bother with actually understanding the data but report on the superficial.
Not to mention our politicians.
Middle class is relative to your location. A middle class worker in California makes significantly more than a middle class worker in West Virginia. A more honest comparison would be comparing the state of California to Germany as there both have the highest gdp in there respective geographic locations, although California has half the population it’s better than comparing Germany to a country that’s comparable to the entire EU
Thank you for actually giving a definition to middle class! So many people use the word but give no true meaning to it!
I consider myself a middle class citizen in The Netherlands, which is somewhat similar to the middle class in Germany. I earn about the average income (which is higher than the median income), I can save up quite some money, can pay for any groceries I want, and I can easily pay for a vacation at least 2 times a year if I want to. Yet I still cannot afford to buy my own home here, so I am forced to rent something, because housing prices are too high for me to pay...
You described exactly my own situation here in Germany. ✌️😁👍
I'm in a very similar situation in The Netherlands. I don't have to worry about money, yet I can't buy a home in the area where I live on one income. When I look at colleagues and friends who did buy a home, I'm quite shocked that a lot of them barely have a financial buffer, while their mortgage costs are high. Too many of them are just one (maybe two) paychecks away from no longer being able to pay their mortgage. Due to problems with the salary system we got our salary 3 days later than usual. For me a minor inconvenience because I had to book some money from my savings account. For two colleagues of mine a real problem, because this meant they would be late with their mortgage payment.
I might be a renter, but I could live for at least 4 months off my savings (without needing to cut costs).
By US/Canadian standards, a renter could hardly belong to a middle class. Having a house is fundamental for being a part of the middle class.
@@antonnnn464 welll you see that even poor southern european countries have a higher percentage of people owning a house and having networth in real estate. Germany and others are economically strong, but people are actually poor and depend on their strong state to help out.
@@antonnnn464 depends on WHERE in Canada Toronto / Vancouver WITHOUT generational wealth OR a existing home you get a LOT of people that could live quite comfortably BUT have to RENT and can NOT enter the real-estate game
I love your videos! As an American, I view being middle class as being able to own a home in an area with a good k12 school district, having a great health insurance plan, going out to dinner once a week, affording a vacation every few years, and being able to send your kids to college or trade school. Retiring at 65 with a paid off mortgage would also be nice. I just wrote that and realized that only the upper middle class have a hope of doing that in my area….and it is a stretch for THEM. Maybe our expectations are too high? 🤷🏼♀️
few notes that might shed a light:
- rest of the world has the health insurance provided by taxes so further expenses on that are relatively low;
- vacation once every FEW years sounds unacceptable. You should be able to take several weeks off per year (granted by law and encouraged by employer), vacation doesn't necessarily have to be at exotic destination, could be within the country itself. So it means you should be able to have at least 1 say week long vacation every summer, not too luxurious but enough to have a rest;
- college/university is also paid by taxes in rest of the world.
I'm British, aged 56, own a $600k home with $50k left on the mortgage, go on vacation twice a year, eat out twice a week and am on track to retire at 62, and my net worth (mine only, not the household) is around $1M. Despite this, in many ways I still consider myself only lower-middle class at best, certainly not very well off. I drive a six year old car and have no intention of changing it anytime soon. I went to college but didn't even have a decently paid job until I hit 31 and have been fired loads of times, after ending up in many unsuitable roles.
Being able to afford to send your kid to college? Do you mean pay for college without any loans?? Because you have to be rich to do that nowadays. No middle class person, even upper-middle class could afford college out of pocket.
@@sashkad9246I know plenty of fellow Americans who have never taken a vacation, or only take one once a decade maybe. It’s not seen as a necessity, and often isn’t possible with many jobs.
I’m Native American and German, I was serving in Augsburg and got to spend time with relatives in a community outside of the base.
I have the feeling that here in Germany many young people don't even know that they could buy apartments or even houses. In the media we only ever hear the prices of the cities with a population of over a million, but not our own prices. For example, I have coworkers who spend €10,000 a year on vacation (for two adults without children). But they don't know that they would only have to give up their vacation for 5 years in order to save the down payment for a spacious apartment or 8 years for a small house. In conversations they mention house prices like €500,000 even though it's only €150,000 for us!
Our German obsession with vacation trips and of course the fact that they are common topics of conversation has a huge impact on us.
I've never spent 10,000 USD on a vacation. I mean maybe when my kids are older, but that seems like a ton of money to throw away.
I don't think that the math works out, if you spend 8 years saving up for the down payment, chances are you'll be in your late 30s or early 40s, at which point a 30y.o morgage isn't a good idea, and a 25 one is probably too expensive, especially at current interest rates
Crazy! My wife and I spend around €6,000 a year on vacations and consider that to be a lot. House prices in the UK are beyond crazy - my small house (90 sq m) is worth €600,000. We could only buy it with a lot of help from relatives.
Growing up, if you had your own home and garden you were rich to me
Watching from South Africa, you had me digging through the internet to see equivalent numbers to those you were presenting for USA and Germany.
Quite intrigued by the way you present. Not overly casual, and neither too "academic." And it's refreshing to hear a woman's voice in this male dominated arena.
Owning a home is a great hedge against inflation. Renting gives you a book of rent receipts. Houses nearly always increase in value over the long term.
the "houses nearly always go up" is what is removing the "middle class" because it drives the MOST IMPORTANT expense anyone has up and up transfering that money into a ever fewer rich / very rich sub group making everyone else poorer and further from being financially secure
@jasonriddell your parents should be able to transfer a paid off house to their heirs, otherwise they're just being selfish and greedy.
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Usually you are paying roughly x2 the loan amount in the end. If you invest wisely, renting makes more sense than home ownership. (Most, including myself do not, and a mortgage is the way to go.)
hey Ashton, there seems to be an issue in the video from 5:14 to 5:24. I had a feeling, that you were trying to show some numbers but I can only see a blurry colored screen and there is some circling going no, but I feel the facts are missing. but maybe I just expected something that isn't there.
Ah shoot. Perhaps something didn't render correctly.
Interesting video so thank for the insights. I think its a very challenging comparison when comparing the US to European country as the government entitlement systems vary significantly. With that said I will speak to the US perspective. I'm approaching retirement so I spent significant time planing for my retirement and "legacy" to had off to my children. I've been fortunate to have both a frugal mindset as well as timing (GenX). When I began my retirement planning I no thoughts of leaving or having to leave a "legacy" for my children. But the realization of the costs of secondary education (debt) and the elimination of "easy" wealth generation (owning a home) have made it a priority for me to ensure I leave some savings behind. I honestly do not believe the rising cost of education and housing are sustainable. We are also seeing an increase in corporate home ownership which will not bowed well for the rental markets as these companies need to show continued profits and growth (i.e. rent increases fast then inflation and earnings). I hate to the pessimist but the middle-class in the US will continue to expand downward.
This has made me realize that my distaste for travel is related to the costs. I dread having to leave home for travel. I simply want to stay home keeping all my costs minimal 😂 People refer to travel as if it's some great privilege but i struggle with it.
It's all about taxes. In NL we pay a good amount of income tax. I agree, it's for a good cause, we have a great social security and people are not left behind fast. In NL we also have very favorable taxing on assets and income from that assets. The highest income tax scale is 49%, so this means you have to pay 49 cent to every euro you earn in that scale, which is every Euro you earn over 75k€ per year. If you have millions of euros and you have investments with that, let's say you earn 200k€ with those millions. From those earnings you pay 36% tax.
So here's the deal. In NL we pay more tax on sweat (the labor we perform) than on income with the money we have. So being rich pays off, too much!
To make the income gap smaller, it's suggested to raise tax on income from investments and decrease tax on income from labor. In this way the people that have a low income, have more money available and will spend this. This is good for everyone and you even hear more and more rich subscribing to that point of view. Tax does not have to make the rich poor, but is can help slowing down the speed they are getting more rich.
Middle class is a flexible term, it's supposed to feel like a middle, but it really normalizes the existence of poverty. It tells you nothing about your real position in the society. More meaningful would be talking about the working class and the owning class.
Interesting! It is very hard to compare countries with different systems.
I do not own my pension funds, but it provides me with a decent income until death.
On paper it simply isn't there, I cannot leave it to my family, and cannot cash it.
And at 15:17 another aspect is illustrated. Dutch people keep a mortgage on their house for taxation reasons. Even if the house is fully paid, they take a mortgage for improvement or even to spend the money for other things, like an envelope for the (grand)kids.
There is a lot of 'silent wealth', people living in normal houses, with a small car, not showing off in anything, yet their offspring doesn't have to worry about their future. Slowly family capital moves to the next generation.
That is SUPER fascinating about Dutch culture. Thank you for sharing!
so they "reverse mortgage" there homes to "unlock" liquidity for improvements / retirement / generational wealth
it is done in Canada to an extent but we do NOT get "tax" breaks on MORTGAGE we DO get capital gains exemptions on our "primary" home
a "HELOC" - Home Equity Line Of Credit is a line of credit backed by your house value and is a "revolving" credit as in you can run it up pay it down and run it back up till you CLOSE it off OFTEN used to start a business as it is CHEAP credit due to the asset value of the home
and there are "reverse mortgages" as a product where you take out an amount against your home and NEVER pay it back till you DIE only paying the interest and is sold towards paying for long term care homes OR cash infusion without giving up your home
Such an interesting topic again! We too identify as middle class. But both my husband and me have noticed recently that when it comes to wealth, both our parents were higher up in the middle class ranking than we are. Although we have a better education and better jobs. It's the same for most of our (academic) friends. We can hold but very seldomly surpass our parent's ranking. ( 24:47 Which does not count for the upper class of course). And our own adult children don't even care. They don't see any value in being part of the middle class at all. They want more from life in terms of freedom etc. Ist this a good thing? I don't know.. maybe it is.
Great video, as always! I think it varies a lot by area. Where we live, outside DC, the numbers would make us seem upper class, but as two teachers I can say for sure that we’re not. Solid middle class here. Same income in Ohio would make us upper class for sure. Still not sure we could afford uni for both our kids and a serious medical issue.
Yeah, this point was briefly touched upon, but I feel like it’s an incredibly big factor for the „feel like middle class“. Our household income comfortably puts us into the upper class in Germany, based on the nationawide numbers she showed. But while we are by no means poor, I don’t think anybody would disagree with us being middle class. Living with our income in many parts of the country would be quite easy, but our high incomes are strongly tied to living in one of the most expensive regions in Germany. Part of the reasons for the salary are the costs of living. Comparing our income in Munich with rural Mecklenburg-Vorpommern to determine whose in the middle class is pretty useless. The local medium income is what’s important and that can be quite different then the national.
@@eechauch5522this is very true. I have friends in bavarian countryside and all of them work as skilled workers (craftman) earning less than half my or my peer‘s income near Munich. Nonetheless all of them own houses (and paied of a big part) none if us could ever afford here.
So who is middle class? The engineer living in an expensive rented flat with a shiny company car or the craftsman parking his 8year used car in front of his 4 bedroom house?
Friedrich Merz, leader of the cdu, ex ceo of blackrock germany(?) and probably within the top 1% defines himself as middle class. basically all his "friends" have bigger or more private planes so he cant be rich.
that is probably also the reason why he is so bad at communicating towards people who do not own private jets because he thinks he is average and everyone has to deal with the same type of problems as he does.
no need to pin this explicitly to Merz. The majority of politicians on a national level (and sometimes even on a state level) is completely disconnected from the reality of living in Germany. And in other countries it looks the same.
ha ha ha! lololol!
Interesting about the three "h"s. Would have loved a marker like that for germany, as theese do not really apply. Everybody has healthcare, higher education is only expensive as in "you do not start to earn until you are done" and then there are student loans for low income families - of which only up to 10.000 Euros need to be paid back.
This was exactly my thought also.
Nice video. It is interesting how there can be so many ways to see the middle class. In the US, with 'poor' people owning cell phones and TVs, it makes one wonder how much people in other countries have of these things or even consider if they want to have these things. As far as food, what would people consider middle class food or how often they can eat out or where fast food figures into such things. Great stuff.
In a place like the U.S., these items aren't symbols of wealth. A flatscreen TV costs less than $100 new. 40 years ago, phones were considered so critical as a means to lift people out of poverty that the government started a program (Lifeline) to subsidize phone service, which later added cells (Obamaphone), because you can't get a job if employers can't call you.
At one point, only rich people owned cars. Today, a car is viewed as a necessity of American life, for even the poor.
Hi, I am European, middle class for me starts in the moment, when have all you really want, you go grocery shopping and you don’t really care about the prices. You don’t need to calculate how much is in your basket before you reach the cashiers 🤷♂️
That concept of giving people/families a price tag (net worth) is very unusual in Europe. Maybe it'd be helpful to explain how this tag is calculated in the US.
It is a very simple calculation. Take your assets and subtract your debts. Generally at the level used for these surveys smaller assets and liabilities are likely ignored. So it is really going to house value and financial assets minus loans and credit debt. The two main reasons I can think of for wanting to know this in the US is for lending and tracking your long term personal finances to ensure future security for retirement.
The first problem seems to find the correct "middle". Is it the avarage? Or is it the median? Both have their pros and cons. Usually the financially oriented use the avarage, it swipes away the problems of excessive high values for very few individuals. More commonly oriented viewers, like sociologists or trade unions, use the median, as it more tells what the most people have as a value. Incidently, the german laws regarding equal pay use the median.
What was left out somehow were two things: 1. the cost of education is totally different. 2. the social security system is incomparable, especially when it comes to retirement (Rente).
Speaking for my family, my parents were in the worker class with no wealth and low income. The positive thing about living in germany was, that the mere fact that i was good at schools and i had the opportunity to use newly built universities i was able to get a degree and rise to a middle class IT work. And so I was the only child of my parents that studied, but both of my kids have a master degree. Still we dont own a house, i wasnt supported by my parents but had to support them. And then i supported my kids very long. So i feel like being in a sandwich generation, within the socalled boomers.
Median household income is a more robust and accurate measure for summarizing income at the geographic level as compared to average household income since it is not affected by a small number of extremely high or low income outlier households.
In a geographic area, for example, where there happen to be a small number of extremely high income households and a large number of lower income households, the average income can become inflated and give the false impression that all households on average have more money than they actually have. The median income on the other hand is completely unaffected by high-income outliers and therefore better reflects the income status of the majority of households.
In essence the more unequal the distribution of wealth and income is in a group the less useful it is looking at averages
The video shows median multiple times
Average does not swipe away the problem of high values for very few individulas - median does that. Average income will be higher number than median income.
@@michalsladek8809 And that is the problem with averages.
In essence the more unequal the distribution of wealth and income is in a group the less useful it is looking at averages
Huge difference in European vs. American culture, so that's the major delineating point. I was stationed in Hanau, Germany back int he 90's with the Army and experienced German culture back then. Germans as a culture are healthier than Americans, as they walk much of the time and value exercise. They are a regimented culture which values quality over quantity, whereas America is almost the complete opposite in that regard. Here in America, the middle class is disappearing slowly. The goalposts have moved in terms of what income level constitutes "middle class". This is based on single, or married, kids also. I live in a middle class neighborhood, however as a single man with no wife/kids, clearing well over $100K/year, I am considered upper class for my area. Most families in my area don't earn my income, even with a double income household. Last thing, your point about an undergrad degree being the equivalent of a HS diploma now is correct. For many occupational fields today, the requirement is a Master's or Doctoral degree. My field requires an undergrad, Master's and medical license, so there's that. Undergrad degrees are devalued. Skills matter more.
My German coworkers showed me, each engineer I knew there had - Dad’s car, Mom’s car , & Dad’s rally driving car, and most also had A full size Harley Davidson Motor cycle.
i think the end of the video hints at the problem with the middle class...
the reality is...there arent 3 classes in society - there are 2: the working class and the owner class
the middle class is a device to pit the majority of the working class against their peers in a struggle to maintain their relative wealth rather than unite with them to curtail the further accumulation of wealth in the owner class
it is a classic divide and conquer approach and focuses on a desperate desire to not be poor rather than an effort to ensure that there is as little poverty as possible... as long as the focus is that "middle class" ... the poor will always be required, otherwise there is no one to compare against
the few times you mentioned the upper class in context, you even pointed out that the majority of their wealth came from business investments and other owned assets, which survive the bust section of the typical boom&bust cycle in capitalism more easily
Yeah. There is theory that instead of middle class we should classify population based on income sources : capital, wages or professional occupation (doctor, lawyer, small business owner). Middle class is the one with mixed income sources, e.g. still requires work.
WOW!!! Sounds like a whole bunch of Marxist bullshyt.
that 2 class really only divides inherited wealth from the very rich below the 1% that WORKED to build there wealth
so you end up with "unemployed" working class and the few "owner class" and is the small construction company owner that spends 14 hours 7 days a week running a business a working class or owner class?
@@jasonriddell working class - while they are the owner of that company, they cant make a living without working
people in that position usually also pay themselves a salary (and while thats usually more than other employees, it generally is not completely unreasonable, because a small company like that doesnt have a large operating budget to cut into) to keep the business account seperate from their personal one
essentially in those cases...the majority of the money the company makes goes back into the company, rather than to that owner and the owners work is genuinely required - mind you, if they choose to hire someone to do the work they are doing, so they can stop working and still pay themselves out (or turn themselves into the majority shareholder) then they become owner class
im sure there are a lot of grey areas between the classes (when are there not right?), but that one at least is pretty straightforward
good question though - and one i have asked in the past as well =)
Am I middle class in Europe? I'd like to think so. I am over half way paying off the mortgage on my house, I have a good car parked in front of it and I can say with certainty that I'm spending more on my plane ticket alone than the average German apparently spends on their entire holiday. However, I never did any tertiary education although I've been holding jobs this last decade that usually do list that as a requirement in the job postings.
The big threat for the future however is extreme capitalism. When you look at the distribution of wealth and you look at how that is evolving, you see that more and more wealth is going to fewer and fewer people and unfortunately, the middle class in itself can't correct that.
USA has Huge distribution of wealth but somehow middleclass Americans still earns much More then middle class europeans
What is your job?
Divide income groups into 5 groups, 20% income. Adjust for regional cost of living. You could sub group both the super rich & homeless as outliers. You get rich, upper, middle, lower & poor. Measuring between countries that use different currency & culture it gets a lot harder.
I grew up in middle class Mississippi. I am now middle class in Colorado. There are stark differences in the middle class.
Suggestion for a future video:
"Why do Germans invest less than Americans"
As far as I know, only 20% of all Germans own stocks, compared to over 50% of Americans. That has been bad for our country, as we haven't built as much as wealth as our friends in the US. You could also ask a German startup to sponsor the video, Trade Republic or Scalable Capital come to mind (German neobrokers that let you buy stocks)
2008/9?🤔
Well you challenged my perspective. Maybe I am upper class?? I am an American and I always describe myself as middle class. Why? Because that’s how I was raised, as a son of a High School teacher father and a stay-home mother. But I got lucky, by falling into a career which I love, and which I excel in. I earn 20x the median income in the US per your numbers. I was amazed when we were able to buy a 3600 sq ft home on 11 acres in 2019! Then, last year in 2023, we bought another 15 acres next door with a 6,000 sq ft custom home and a 1,000 sq ft guest house on it (they’re both vacant for now). We expanded our property to a gated 26 acres with 2 electric gates you have to pass through to get in. So how am I middle class? Because I don’t “act” rich. If you saw me, an average 45 year old, you’d just see a normal middle class looking guy. I don’t think I’m ostentatious or pretentious. I am able though to quietly give away a couple hundred thousand dollars a year, to those who are in need or who need a hand. Only those we’ve helped know that we helped them, and no one knows about all those others we have helped out. I guess I’m upper class, trying to hide and fit in as middle class. Those are my people! I don’t want to me be lumped in with the upper class stigma perhaps.
Everything about your comment makes me vomit 😂🤮
I love your videos !
Thank you!
@ashton: for the gap between income and self-perceived middle class, you should also consider, that students, who do not have much income, but are children of middle class familys, will likeley describe themselfs as middle class as this is how they were raised. Same thing applies to pensioners, who were in the income middle class all their life, but now get less annuity.
I'd also consider that not all parts of a country are equal. Middle class in high-cost cities like Munich or San Diego is a different thing than somewhere out in the boonies. You may well have a better standard of living in the latter while technically having a lot less money.
Many people who look like me define themselves as middle class. But I study geography and know that I am not middle class. I'm at the top of the underclass. This is also because we have a good income and debt-free real estate - but at the same time we also have 6 children.
Here's an interesting comparison for you. In Germany (as an example), minimum wage for a single person is 12 Euros per hour (1,500 Euros a month) and has an average cost of living of approximately 1,050 Euros a month (this is considered Middle Class for a single person). In the US, the minimum wage is a bit over 7 dollars per hour (around 1,160 dollars a month) with an average cost of living of around 3,189 dollars per month. And yes, I'm aware that minimum wages and costs of living do vary in the US, from state to state (in fact, most states pay higher than the federal minimum wage- Alabama being an exception). In the state of Washington (which pays the highest minimum wage of any state in the US), for example, minimum wage is $16.28 (about $2,604). The cost of living is around $2,600 dollars per month. As long as you have good health insurance (a big IF in the US) and nothing goes wrong, maybe a single guy or gal can live okay here.
Which brings us to another important point. In the United States, most individuals filing for bankruptcy do so because of overwhelming medical debt. In Germany, every citizen has paid health care. In the US, you may have some version of it, if your state opted in for Obamacare. But if you live in a state that does not, you're pretty much on your own.
You don't understand the ACA (Obamacare). It can be unbelievably expensive to get health insurance from the ACA. When I lost my job a few years ago, I looked to see if it would be cheaper to go through the ACA vs my husband's work. The ACA was triple the cost through my husband's work. It would have been about $500/month to have basic coverage. That means I'd pay the majority of the costs under a high deductible plan and the insurance would pay up to 50% of the costs. Even though I don't go to the doctor often, I couldn't rationalize paying close to $500/month for a plan that covered so little.
You have to be extremely poor to qualify for free, or extremely low cost, benefits. You have to be able to barely feed yourself for that to happen in the US. It's sickening how poor you have to be in the US to qualify for help.
Yes, my dear. And I AM that poor. Do you think it would be any easier for me and the many millions of Americans living below the poverty line, if I did not have Obamacare?
The reason we do not have FULLY PAID public healthcare FOR EVERYONE is that it would never pass through congress thanks to the Republicans, who don't care about their constituents. Obama did what he could, given the political climate of the time. As he likes to say, "Don't let the perfect be the enemy of the good."
If you want to solve the very legitimate problem, that you correctly describe, you have to advocate for fully paid healthcare, paid for by your taxes, as they have it in most advanced, western democracies elsewhere in the world. And the people have to stop voting for Republican Corporate shills that want to squeeze as much cash out of their hospital/healthcare networks as is humanly possible.@@smania7575
@@user-wt7wd4oi7j LOL. Fining someone who can't afford to have healthcare for not having healthcare did not help anyone. Thankfully, it's not as strict anymore.
And it's subsidized by taxpayers. That's why many people who are out for lower taxes wouldn't want this. People that care about what their constituents have to pay each year to the government. Even 38 democrats voted against the ACA. So, it's obviously not just a party issue.
Well, I think I just explained that it helped me (and my entire family of 4). I think it's also safe to say, judging by the number of people that have signed up for and renewed coverage each year, that it is still helping.
Now, having said that, the way the system works is (as you correctly point out) being subsidized by tax payers. That's why the system needs to be mandatory. If everyone does not pay into it, the funds are insufficient to cover the needs of each citizen, which is why you are in the predicament of having to pay so much based on your current income.
Making it mandatory to opt-in means that there will never be enough funds for it to work the way that it should work (i.e. providing healthcare for all citizens, regardless of income or tax/bracket). Regardless, it's still better than what we had before (which was every man for himself, if you are lucky enough to have an employer that provides decent insurance. I've worked a lot of jobs in my 50+ years on this earth. Some of them had reasonably good insurance. Most did not- and there was always some coverage (dental, eyecare, whatever) that invariably slipped through the cracks.
In any wealthy country, healthcare should be free, subsidized by each citizens taxes. End of story.@@smania7575
@@user-wt7wd4oi7j I love how you think everyone should be forced to pay for something because you benefit from it. You don't seem to care if others suffer from this program in any way as long as you are benefiting.
Forcing someone to pay for socialism is how communism starts.
Middle class is almost a "State of Mind" and "Keeping up with the Jones's". Such a variety when you factor in which of the 16 German Federal states you live or in which of the 50 US states you live. Health care, Social safety nets etc... also are extremely different. I applaud you for gathering this data and you presented it well.
It lies who wants to be in lower class , people dumb with money and no work effic will never reach middle class lefty
Me in Colorado: it's 0100 in the morning. I should go to sleep.
My phone.... hey, Type Ashton just dropped a video.
Me: OOOOOOOO, a reason to stay up!
Hahaha I am happy to be a fun distraction. Hope you enjoy the video!
😂👍
Intersting how high the income of the middle-class in the USA is. But it doesnt look like the americans have a higher standard of living than we have in germany....
It is interesting too when you look at the indicators. The same number of Germans and Americans own their home outright (the US just has more families with mortgages). And German families typically have more in retirement and savings than a US family, despite having more income.
If You're not poor Then USA is better Then Germany anyday
@@TypeAshtonMedian wealth of American households are about 193000$ as of 2023