Madison Avenue no longer marketing to the middle-class as the rich have all the money.

June 1, 2011 1:03 PM

According to Financial Blog TooMuch, a new white paper from AdAge claims that the era of "Mass Affluence is over". This means that because the middle-class no longer have the dominent share of disposable income that marketing directly to the super-rich is the future of advertising. This means that if you're over 35 and make $100,000 to $200,000, Madison Avenue no longer really cares about you.

Apparently no one in America really realised what it meant that "The top 10 percent of American households.. now account for nearly half of all consumer spending, and a disproportionate share of that spending comes from the top 10’s upper reaches."

It reminds me of that Steinbeck quote, that 'Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.'
posted by rudhraigh (163 comments total)

Middle-class swim time is over, everybody out of the pool.
posted by GuyZero at 1:04 PM on June 1, 2011 [10 favorites]

Arab Spring is over -- time for an American Summer.
posted by empath at 1:07 PM on June 1, 2011 [21 favorites]

Well at least now I don't have to worry about what luxury items to spend my remaining money on. I can spend them on food and gas, like everybody else.
posted by Stagger Lee at 1:07 PM on June 1, 2011 [14 favorites]

So this means that no one will market crap to me anymore? I guess there's an upside to everything.
posted by Frowner at 1:10 PM on June 1, 2011 [64 favorites]

That's funny, pound for pound I see more advertising aimed at people who seem less wealthy than I am. McDonalds, pay day loans, car insurance for people who seem to have trouble getting car insurance. Maybe it's because most actual advertising I see is at the gym, where I'm stuck in line of sight of tv sets that are running ESPN, fox, cnn, VH1, Lifetime...

But I still think the point could be made - where are you going to expose uber-rich people to traditional advertising these days? I'm far from uber-rich and I watch Netflix, listen to satellite radio, etc. If you're going to market to me you're going to have to use the internet.

If I'm rich and buying a big house, a jet-ski, or a helicopter, or an investment, I'm far more likely to have made those decisions based on who I know.
posted by randomkeystrike at 1:12 PM on June 1, 2011 [10 favorites]

So this means that no one will market crap to me anymore? I guess there's an upside to everything.
posted by Frowner at 1:10 PM on June 1 [1 favorite +] [!]

They have to sell all of the shoddy, mass produced shit to somebody. We'll just get lower quality ads.
posted by Stagger Lee at 1:13 PM on June 1, 2011 [4 favorites]

marketing directly to the super-rich is the future of advertising.

Remember blipverts? That form of advertising from Max Headroom that compressed too much data into a few seconds and it caused the viewers heads to explode or something?

Perhaps they can go with that as a targeted ad model.
posted by quin at 1:14 PM on June 1, 2011 [9 favorites]

Aw, Frowner beat me too it.

Heh. I love marketing, especially when it's done right. Maybe now they can focus the "I'm fucking stupid and I love it" beam on the super rich and destroy them just like they destroyed the middle class consumer...
posted by daq at 1:14 PM on June 1, 2011 [3 favorites]

So this means that no one will market crap to me anymore?

Most likely, you'll still be marketed to, at least through the usual channels, it'll just be for things you can't afford.
posted by drezdn at 1:14 PM on June 1, 2011 [1 favorite]

I disagree with this, in that if those corporate masters know what's good for them, they will work hard to continue constructing the idea of the average American household for the lower-middle classes. If advertising suddenly shifts so far to the rich end of the spectrum that it is actively alienating 90% of the population, things will get ugly fast. American Summer indeed.
posted by mek at 1:15 PM on June 1, 2011 [6 favorites]

I'm interested to see if this eventually means that there will be Big Macs that cost a thousand bucks.
posted by rudhraigh at 1:16 PM on June 1, 2011

Most likely, you'll still be marketed to, at least through the usual channels, it'll just be for things you can't afford.

AH-HA! Welcome to my world, middle-class.
posted by thsmchnekllsfascists at 1:16 PM on June 1, 2011 [27 favorites]

it'll just be for things you can't afford.

So, business as usual?
posted by Devils Rancher at 1:16 PM on June 1, 2011 [3 favorites]

This white-paper must have been written by someone as high as the proverbial fucking kite.

Poor people like to have things that rich people have. They have and will buy downmarket versions of these things ever since ... since ... well, since there's been things. Pharoah got his ass a pyramid. It's good to be pharoah. But wouldn't you like to have a nice plot for grandpa, too? Step right this way, sir...

What the fuck do you think Target and Wal-Mart sell, anyway? It's not all just soap, toothpaste and underwear. So we think middle-class people will suddenly not want to play Xbox games on flat-screen televisions?

This is horseshit. The Robb Report is not the end-all future of advertising.
posted by Cool Papa Bell at 1:19 PM on June 1, 2011 [13 favorites]

Something's wrong with the statement that ""The top 10 percent of American households.. now account for nearly half of all consumer spending..."

From the Federal Reserve's Consumer Expenditure Survey (2009), table of consumption by household income, here's the distribution of consumption by household (I just multiplied average consumption by number of households and divided by total consumption):

Bottom: 9%
2nd:13%
3rd: 17%
4th: 23%
Top: 38%

Even if the 2nd highest decile consumed the same as the average of the 4th quintile, the top 10 percent would consume (38 - 23/2)=26 percent of total consumption. Inequality's growing, but the top decile's consumption share didn't increase from a quarter to a half.

My guess is that when they say "consumer spending," they mean stuff that advertisers spend a lot of money advertising.
posted by Mr.Know-it-some at 1:20 PM on June 1, 2011 [7 favorites]

Did anyone else get the Chromebook email offering from Google today?

It directs you to this site for their offered sale of the new Chromebook. Apparently they're using gilt.com as the 3rd party distributor. I'm not entirely sure why they went with this site.

This site appears/looks/feels incredibly douchetastic. Upon signup you're presented with a gender choice, and that gender choice is used to either show you the ultra-masculine manly-man side of the site, or the girly-girl side of the site.

WTF, Google? Are you intentionally trying to position the Chromebook as an expensive fashion accessory?
posted by loquacious at 1:20 PM on June 1, 2011 [5 favorites]

empath: Arab Spring is over -- time for an American Summer.

First, this is highlighting the difference between the Have-a-lots and the have-enoughs, not the haves and the have-nots. Rebellion because you can't buy whatever you want (or aren't being courted by companies) is not a rebellion waiting to happen - it's idle chatter between friends and acquaintances.

Second, Madison Avenue cares about a lot of people in different ways. Have fast-food restaurants and sugar-water peddlers stopped pumping money into catchy adverts? The really wealthy aren't the target of the Coke vs Pepsi War, it's anyone who is thinking they have a few bucks to spend on a drink.
posted by filthy light thief at 1:22 PM on June 1, 2011 [3 favorites]

Aw man, now we're going to miss out on all those cool, hip ads.

Drat. What a shame.
posted by Slackermagee at 1:26 PM on June 1, 2011 [1 favorite]

I'm far from uber-rich and I watch Netflix, listen to satellite radio, etc. If you're going to market to me you're going to have to use the internet.
In addition to the above, I use Firefox's AdBlock plugin, so there goes the Internet, too.
posted by foldedfish at 1:30 PM on June 1, 2011 [9 favorites]

The future for middle class americans is a J.G. Wentworth ad stomping on a human face forever.
posted by drezdn at 1:30 PM on June 1, 2011 [16 favorites]

This is like a horrible game of telephone.

An ad agency (Digitas) writes a white paper using data from the Mendelsohn Affluent Survey and partners with AdAge to sell it for $249. AdAge writes a short article describing some juicy bits from the study. A blog writes a much longer article that has almost all of the magazine article embedded in it (and I'm guessing they didn't fork over the cash to get/read the whole white paper) and concludes:

In the future, if current trends continue, no one else but the rich will essentially matter — to Madison Avenue.

That's complete horseshit.
posted by donovan at 1:31 PM on June 1, 2011 [15 favorites]

Dear god, I'm poor.
posted by 23skidoo at 1:31 PM on June 1, 2011 [4 favorites]

Second, Madison Avenue cares about a lot of people in different ways.

Like your grandmother. Or God.
posted by steambadger at 1:32 PM on June 1, 2011 [1 favorite]

I'm far from uber-rich and I watch Netflix, listen to satellite radio, etc. If you're going to market to me you're going to have to use the internet.

Or they'll get billboards, signs in bathrooms, product placement in movies, books and music, and pay people to talk about them in public.

(And on the internet, they'll pay people to subtly hype up their product on twitter, in response to questions on the net, and in posts)
posted by drezdn at 1:32 PM on June 1, 2011

The last ad that really caught my eye in the last year or so is one currently running on the side of Portland mass transit. It offers the bargain of "any tooth extraction for $100."

This is not the kind of bargain that you look for in a healthy society.
posted by fifteen schnitzengruben is my limit at 1:32 PM on June 1, 2011 [10 favorites]

Not to worry. Don't buy home. Rent. Get lots of credit cards. Leave debt to your kids. Tell them no college because can not afford it and it gets you nowhere...hunker down and shop at WalMart...car pool with your wife or your girlfriend or alternate weekly. Skip anniversaries, birthdays, and send used Hallmark cards.
If all else fails, join the Tea Party so you can have new friends and direct anger at all others.
posted by Postroad at 1:32 PM on June 1, 2011 [3 favorites]

First, this is highlighting the difference between the Have-a-lots and the have-enoughs, not the haves and the have-nots.

I have significantly more debts than assets. Technically speaking, I'm part of the "have less than nots."

The difference is I get to eat 3 squares, have clothing, split a nice house with roommates, play video games, still manage vacations, etc. We're still a way off from a good old-fashioned revolution.
posted by Mister Fabulous at 1:34 PM on June 1, 2011 [4 favorites]

Drezdn, I'm sorry, that's ridiculous. I'd stay here and argue with you, but I've got to go pick up dinner from Subway in my Honda Civic, which gets 35+ miles per gallon.
posted by randomkeystrike at 1:35 PM on June 1, 2011 [9 favorites]

/formatting and preview fail
posted by randomkeystrike at 1:36 PM on June 1, 2011 [1 favorite]

Arab Spring is over -- time for an American Summer.

Just as long as it's a Wet Hot American Summer.
posted by Strange Interlude at 1:38 PM on June 1, 2011 [2 favorites]

Steinbeck had our number.
posted by caddis at 1:39 PM on June 1, 2011 [5 favorites]

1. Millionaires Control 39% of the World’s Wealth

2. The Rich Use the Web Mostly for Money, Food & Porn

human civilization = porn
posted by stbalbach at 1:39 PM on June 1, 2011 [5 favorites]

Just as long as it's a Wet Hot American Summer .

The proles eat Meatballs in summer.
posted by KokuRyu at 1:41 PM on June 1, 2011

human civilization = porn

Was there ever any doubt about that?
posted by thsmchnekllsfascists at 1:43 PM on June 1, 2011 [2 favorites]

I'm waiting for the era of Ass Affluence to be over. Cuz seems like every where I look, only Assholes are affluent.
posted by spicynuts at 1:43 PM on June 1, 2011 [2 favorites]

Thank God I won't be inundated by junkmail and pop up advertising anymore.
posted by JJ86 at 1:43 PM on June 1, 2011

if those corporate masters know what's good for them

I think this is the crux of the problem -- they honestly don't know what's good for them. Our modern Corporate Overlords don't appear have, collectively, a tenth of the insight that Henry Ford had in one (ragingly antisemitic) earlobe. Quite a few of them seem to have drunk a very special kind of Exceptionalist Kool-Aid, not American Exceptionalism, but personal exceptionalism. I think they honestly believe on some level that their past success is a guarantee of future success, to hell with everything else.

The fact that many of them might end up in a basement like the Tsars if they keep pushing their luck doesn't seem to occur to them.
posted by Kadin2048 at 1:43 PM on June 1, 2011 [5 favorites]

Cool Papa Bell: Poor people like to have things that rich people have. They have and will buy downmarket versions of these things ever since ... since ... well, since there's been things. Pharoah got his ass a pyramid. It's good to be pharoah. But wouldn't you like to have a nice plot for grandpa, too? Step right this way, sir...

But there weren't burial pyramids for working class in Egypt. If you were lucky, you'd be one of the servants or slaves buried alivein your boss' big geometric crypt.

In any case, I think what the paper is getting at is, advertising is in large part a case of chasing the biggest markets, and they tend to attract disproportionately. That is to say, in a sense, the slice of the pie that's 51% of the whole tends to get more than 51% of the people reaching for it.

That's why teenage males are catered to so heavily in movie theaters these days even though, proportionately, they aren't that much larger a demographic than the others. The result is they're catered to, which expands the market artificially to a point, which causes people to cater to them more. The result leaves the rest of the market distinctly under-served.
posted by JHarris at 1:44 PM on June 1, 2011 [3 favorites]

I can say that there's a definite difference between so called "aspirational" marketing and marketing directly to the super-rich. Getting the attention of the super rich will have to be a much more personalised, individually tailored experience. Say for example you have a marketing budget of 10 million dollars for a Nike campaign, you can either spend that on a hugely open campaign that appeals to all, or you can spend your entire budget on using a lazer to carve Bill Gates' face on the moon and hope he sees it and buys Nike.

It's an odd model with obvious shortcomings, but I can tell you that if this happens, you'll see a definite downgrade in the amount and quality of ads you see around the world, at least until the industry normalises. Kind of like the effect outsourcing had on the manufacturing industry, we'll be sending our marketing dollars abroad to St Barts and the South of France.
posted by rudhraigh at 1:44 PM on June 1, 2011

Perhaps, instead of telling us what the article means in the post, you could let us decide for ourselves what we think it means.

Not that you're grinding axes or anything.
posted by DWRoelands at 1:44 PM on June 1, 2011 [2 favorites]

http://blogs.wsj.com/wealth/2011/05/31/millionaires-control-39-of-the-worlds-wealth/

So this article starts by saying that millionaires share of world's wealth is up, apparently by 2%. It then goes on to say that among those with over $5 million the share is also up. Again, by 2%. So, it seems that the gain has gone almost entirely to those whose assets total $5M or more. Of course, some of those individuals could have passed that threshold in the time period precisely because of the wealth gain, but it does emphasize that, in aggregate, the economic share of the pie is only growing for the top %0.1 of the population.
posted by meinvt at 1:46 PM on June 1, 2011 [1 favorite]

Yeah, the FPP is just a TAD bloggy, isn't it?
posted by hippybear at 1:47 PM on June 1, 2011 [3 favorites]

But there weren't burial pyramids for working class in Egypt.

Leave it to the Internet for someone to correct you about burial practices in ancient Egypt.

I was ... ahem ... using hyperbole to make a point. Of course the lower classes didn't have pyramids. But they had to be buried somewhere (if not inside a pyramid with 100 of their stonecutter buddies). And it's a certainty that some burials were better than others. Hence, marketing of burial plots. Those priests made their money somehow.

Bottom line: Everybody pays and everybody dies.
posted by Cool Papa Bell at 1:47 PM on June 1, 2011 [1 favorite]

So the Mendelsohn survey defines Aspiring 35+ as those making $100-199/year. I guess the message is that if you make less than that you shouldn't even bother to aspire. That's quite a message for the 267 million Americans who aren't in the affluent zone.
posted by blucevalo at 1:48 PM on June 1, 2011 [2 favorites]

$100-199k, that is
posted by blucevalo at 1:48 PM on June 1, 2011

I peripherally know someone, who has on average, 2.5 to 3 Million dollars sitting in his driveway at any given time. I have seen a handful of advertisements for two models of those vehicles during my entire lifetime.

I am someone who has about $18,000 sitting in his driveway. I see advertisements for my vehicle ALL the time, as in at least 5-10 times depending on how much TV/media I encounter during a day.
posted by Debaser626 at 1:49 PM on June 1, 2011 [2 favorites]

Getting the attention of the super rich will have to be a much more personalised, individually tailored experience.

Indeed. And then a slightly less well-off person will say, "Hey, I want my face carved into the Moon, too. But I can't afford the Moon. Do you have anything else? How about carving into the face of Half Dome? At least I can see the Moon from there. It'll make a nice picture. See?"

And then someone will advertise that service for others.
posted by Cool Papa Bell at 1:50 PM on June 1, 2011 [1 favorite]

Surely giving more tax cuts to the rich will fix this problem in no time!
posted by tittergrrl at 1:52 PM on June 1, 2011 [8 favorites]

I peripherally know someone, who has on average, 2.5 to 3 Million dollars sitting in his driveway at any given time. I have seen a handful of advertisements for two models of those vehicles during my entire lifetime.

What magazines are you reading? If you're in the UK pick up a Financial Times and read the "How to spend it" supplement. They advertise superyachts in there, let alone cars.
posted by fire&wings at 1:56 PM on June 1, 2011 [3 favorites]

I peripherally know someone, who has on average, 2.5 to 3 Million dollars sitting in his driveway at any given time. I have seen a handful of advertisements for two models of those vehicles during my entire lifetime.

Much of most episodes of Top Gear (UK version) are just lengthy advertisements for such vehicles disguised as an entertaining television show.
posted by hippybear at 1:58 PM on June 1, 2011 [1 favorite]

This seems a bit dramatic. The International Metalworkers Federation keeps statistics on the number of hours people need to work to purchase stuff in various parts of the world. On that measure the USA consistently scores good to very good (i.e. requiring the least number of hours of work) for food, clothing and durables. Now the Metalworkers Federation is not a source that you would expect to be particularly biased towards the interests of the rich. The 2008 survey as PDF.
posted by eeeeeez at 2:00 PM on June 1, 2011 [1 favorite]

Who Cares?
posted by Vibrissae at 2:02 PM on June 1, 2011

Oh, the rich people want what the poor people's got
And the poor people want what the rich people's got
posted by munchingzombie at 2:03 PM on June 1, 2011 [2 favorites]

I have seen a handful of advertisements for two models of those vehicles during my entire lifetime.

Debaser626, that's the point of matching media with the target demographic. If the advertiser is reaching you, (and I'm assuming you're a middle class-ish person) then they are wasting their money. The manufacturers of those expensive cars spend their advertising money on media that is very tightly marketed to their target audience. Ever seen a copy of an in-flight magazine for something like Emirates Airlines? There's stuff for sale in there I've never heard of.
posted by Mcable at 2:06 PM on June 1, 2011 [3 favorites]

I wonder if this will de-marginalize "bling?" "I can't afford a decent car, or a house, or heathcare, or a future, but, damn, look at my fancy-ass iPad!"
posted by rtimmel at 2:11 PM on June 1, 2011 [1 favorite]

where are you going to expose uber-rich people to traditional advertising these days?

In-flight magazines. I've always been intrigued by the lifestyle that those things advertise: it's all luxury cars & $20,000 wristwatches for the men, diamond jewellery & designer handbags for the women, not to mention exclusive Conde-Nast style resorts in the Maldives - a pop at only a few grand a night.

But like Cool Papa Bell points out, people with less disposable income will still buy into whatever chunk of the prestige experience they can afford. Ferrari make more money from keyrings, caps & similar small-ticket merchandise than they ever do from selling actual cars, for example.
posted by UbuRoivas at 2:13 PM on June 1, 2011

The problem with marketing primarily to the top 10 percent is that unless they buy multiples of item X the pool of potential purchasers goes way down.

While there is still a market for Ferraris and Bugattis and Porsches and the relatively high profit margins of high-end luxury cars plenty of people are willing to shell out for luxury cars like Lexus, BMW and Mercedes that simply can't afford the supercars.

Further while there are the collectors who tend to purchase large number of cars the number of those people in the world really isn't a massive amount. Even though the profit on each vehicle is smaller on the average Lexus and much smaller on the average Toyota the sheer volume of those smaller transactions helps. Especially if you get the aspirational crowd to finance their purchases either through a car loan or a lease.

It also seems to ignore the fact that the wealthy tend to save more and spend a smaller percentage of their income than middle and low income individuals. The wealthy drive consumer tastes but you still need to average consumer to make plenty of money on your products.
posted by vuron at 2:16 PM on June 1, 2011 [1 favorite]

Does this mean that they won't have the people in ridiculous outfits dancing and waving in front of Liberty Tax and the Cash for Gold places? That would be a fucking tragedy!
posted by double block and bleed at 2:17 PM on June 1, 2011 [1 favorite]

I would like to buy a Bugatti Veyron Mouse, but nobody has tried marketing one to me.
posted by Joey Michaels at 2:20 PM on June 1, 2011

Holy shit! 100,000 to 200,000 dollars is middle class. If only I made 20 times more money a year I'd be lower middle class.

I sincerely hope that one day all the Bugattis and Lamborghinis and Mercedes and BMWs and Hummers magnetically attract each other and explode on impact. With or without the owners inside them.
posted by cloeburner at 2:20 PM on June 1, 2011 [1 favorite]

Stagger Lee: "We'll just get lower quality ads."

yeah, like? I couldn't afford netflix? Soooo I wound up with a natflox account? The selection's not as good, but it's only $20/ month.
posted by boo_radley at 2:20 PM on June 1, 2011

The result is they're catered to, which expands the market artificially to a point, which causes people to cater to them more.

The Shoe Event Horizon
posted by BeerFilter at 2:21 PM on June 1, 2011 [3 favorites]

If you're in the UK pick up a Financial Times and read the "How to spend it" supplement. They advertise superyachts in there, let alone cars.

Interestingly, from a handful of newspaper 'lifestyle' supplements & magazines I've seen in India since that nation started telling itself it's a nascent superpower & economic miracle, just about all of the advertainment articles are about seriously high-end products like supercars, luxury yachts & private jets; nothing much that any ordinary rising middle-class Sanjay Public could ever hope to afford.

Or perhaps "hope" there is the telling word - that it's all about aspiration, and that if a regular babu cannot afford a walk-in German refrigerator with built-in humidor & wine storage rack, then maybe he'll at least feel compelled to fork out for a regular Samsung model, to feel that he's at least partially keeping up with the Singhs.
posted by UbuRoivas at 2:24 PM on June 1, 2011

WTF, Google? Are you intentionally trying to position the Chromebook as an expensive fashion accessory?

Even after 2x checking the original email a few times, I was still left thinking this was probably savvy phishing ... if I were interested in buying a Chromebook, it wouldn't be from a vendor as sleazy / MLM-looking as "Gilt Groupe".

I guess this prole is still being marketed to, then.
posted by ryanshepard at 2:27 PM on June 1, 2011 [1 favorite]

Hell, judging by the commercials I see on tv, I left the advertisers' crosshairs ages ago. I rarely see anything in ads that are targeted to me, at least from an economic standpoint.
posted by Thorzdad at 2:29 PM on June 1, 2011

Yeah, to echo cloeburner, if you're below $100K you're lower class? Guess I know my place.
posted by maxwelton at 2:29 PM on June 1, 2011 [3 favorites]

This site appears/looks/feels incredibly douchetastic. Upon signup you're presented with a gender choice, and that gender choice is used to either show you the ultra-masculine manly-man side of the site, or the girly-girl side of the site.

I got the email and had the same impression. I see this as an extension of how hypermasculine the Android phone ads are, especially the Motorola and Verizon ones. If you don't use Android, you're a pussy, basically. Maybe it is an extension of how Google develops software with interfaces meant for computer scientists, a predominantly male-dominated field. There's probably a graduate-level thesis on the sexual politics of consumer electronics marketing.
posted by Blazecock Pileon at 2:30 PM on June 1, 2011

I guess they convinced enough of the 100k to 200k club to purchase massive houses at inflated prices in suburbs that are miles from their jobs so that they need 2+ cars per household and due to long commute times requires them to eat fast food 3-4 times a week.

When the basics of your lifestyle (housing, food, transportation) and the common conveniences (cable, internet, cell phones, HDTVs, computers) eat up most of your income and you can't borrow massively against your mortgage then you simply aren't buying as many Veblen goods as you used to.

I guess advertisers are noticing that the middle class (100k to 200k) bracket can't afford as many clothes, trips, consumer electronics, toys, etc as they used to and they need to focus their attention on those consumers who are less likely to be cash strapped and housepoor.

Some percentage of the aspiration crowd will get carried along but you gotta chase the money.
posted by vuron at 2:30 PM on June 1, 2011 [2 favorites]

This white-paper must have been written by someone as high as the proverbial fucking kite.

Drug use in the advertising world?!? Well I never!!!
posted by chavenet at 2:33 PM on June 1, 2011 [3 favorites]

Quants 1, Wants 0. Next round.
posted by jeffburdges at 2:35 PM on June 1, 2011

Arab Spring is over -- time for an American Summer.

Winter for Poland and France!
posted by Devils Rancher at 2:36 PM on June 1, 2011 [1 favorite]

Yeah, to echo cloeburner, if you're below $100K you're lower class?

It's bullshit. A single earner making $150k is not middle class. Hell, a $150,000 household income is in the top 5%. So a single earner at $150k is top 2 or 3%.

How can defining as middle class someone in the top 3% of earners be in any way useful? Answer: it can't. Middle class is something like $35,000 to $85,000. With adjustments for local cost of living. Note that even at $35,000 you're defining something like 40% of households as below middle class, since $35,000 is roughly the start of the 3rd quintile.
posted by Justinian at 2:36 PM on June 1, 2011 [8 favorites]

Fuck you Madison Avenue! I don't give a shit if you market to me or not! I'm still going to buy it! that'll show you!
posted by Ad hominem at 2:37 PM on June 1, 2011 [1 favorite]

Hell, I may be too conservative. A single earner at $150,000 may be top 1%.
posted by Justinian at 2:38 PM on June 1, 2011

When are you [Mefites] ever going to make the distinction between the wealthy, high earners, and class? They are not necessarily the same thing, even though all three may often be closely correlated.
posted by kdar at 2:42 PM on June 1, 2011 [2 favorites]

Nothing in the white paper abstract or quoted sections says that advertisers won't or shouldn't advertise to those making less than 200k--that appears to be the blogger's (entirely made-up? I can't say for sure because I haven't paid the $250) gloss on the paper. According to the abstract, the paper is actually about identifying who is likely to be a target market for high-end luxury goods now and in the future.

Abstract:
Income inequality may be a political talking point in Washington D.C., but it's also a reality that marketers need to consider when they are positioning products aimed at upscale consumers. In the wake of the Great Recession, it's time to rethink how to market to the segment that drives nearly 50% of consumer spending. But just who is affluent today? And which group is on the path to the rich life? This Ad Age Insights white paper, based on studies and data from strategic partners Digitas and Ipsos Mendelsohn, identifies five tiers of affluent households and explains why true affluence isn't achieved until the $200,000 household income level. Two distinct groups are found at the $100,000-$199,999 household income level, one on the path to riches, and one that has fallen back into the middle class. Learn why career is one of the strongest indicators for attaining wealth, and how media habits change as consumers move up the tiers. This white paper includes 10 charts, available as downloadable Power Point slides.
posted by phoenixy at 2:46 PM on June 1, 2011 [2 favorites]

GUCCI GUCCI FENDI FENDI PRADA

BASIC BITCHES THE TOP 10 PERCENT OF AMERICAN HOUSEHOLDS WEAR THAT SHIT SO I DON'T EVEN BOTHA
posted by everichon at 2:47 PM on June 1, 2011 [3 favorites]

Ferrari make more money from keyrings, caps & similar small-ticket merchandise than they ever do from selling actual cars, for example.

Holy shit, I never thought of that. Of course the brand is more valuable than the cars themselves. Are there numbers available somewhere on this? Because that would be fascinating to look at.
posted by Cool Papa Bell at 2:48 PM on June 1, 2011 [4 favorites]

Oh, the rich people want what the poor people's got
And the poor people want what the rich people's got

If what the poor people's got means cool, they've gotten it. It used to be that "cool" was a secret knowledge privy only to those on the margins of society (first black jazz musicians, then white hipsters in the 1950s sense); the rich were too bourgeois and strait-laced to get the message, and by the time they got the lingo, it had changed.

Then, sometime after everyone started wearing blue jeans and listening to rock'n'roll, the next generation of rich managed to convince themselves that they're middle class, and get invited to the party. Meanwhile, real wages have fallen, and as the rich's cultural disadvantage has receded, their material advantage (not having to work exhausting hours, having seed capital to spend on everything from making music to opening clubs and galleries) has counted for more. The logical outcome of this is the Vampire Weekend generation, where the hippest places (like Brooklyn these days) are those the non-rich can't afford to live any more.
posted by acb at 2:49 PM on June 1, 2011 [5 favorites]

As far as I can tell neither the actual adage article nor the study define "middle class" as household income over $100K. In fact, the $100-$199K range is used as a proxy for a group that either "aspires" or is "emerging" towards affluence or wealth. The only reference to "middle class" is a claim that prior to the "Great Recession" people in the "aspiring" group "felt rich," while now (presumably because they've come to realize they will never become affluent or wealthy) they describe themselves as "middle class." In fact, as far as I can tell, this study isn't really talking about overall allocation of advertising dollars, but rather attempts to highlight who should be targeted for marketing of luxury goods.

The characterization of the study in this post and the linked blog post aren't really accurate.
posted by pardonyou? at 2:52 PM on June 1, 2011

I don't know. Have you been to Brooklyn? A lot of not rich people there.
posted by josher71 at 2:54 PM on June 1, 2011 [1 favorite]

then white hipsters in the 1950s sense

We see them as hip in retrospect, but who got all the attention in the 50s, movie stars and the Jet Set.
posted by Ad hominem at 3:01 PM on June 1, 2011

Holy shit, I never thought of that. Of course the brand is more valuable than the cars themselves. Are there numbers available somewhere on this? Because that would be fascinating to look at.

Ferrari brand is worth $3.5bn:
http://images.businessweek.com/ss/08/09/0918_best_brands/94.htm
Ferrari 2010 sales: €1.9bn
Ferrari 2010 profit: €303m

Source: Fiat 2010 annual report
posted by chavenet at 3:01 PM on June 1, 2011

I don't know. Have you been to Brooklyn? A lot of not rich people there.

"New York has closed itself off to the young and the struggling. But there are other cities. Detroit. Poughkeepsie. New York City has been taken away from you. So my advice is: Find a new city.""
- Patti Smith
posted by acb at 3:03 PM on June 1, 2011 [5 favorites]

The Temporarily Embarrassed Millionaires is my new bluegrass band.
posted by Ironmouth at 3:05 PM on June 1, 2011 [6 favorites]

All TV shows on networks will now feature an all Hall and Oates soundtrack and at least one appearance by either Warren or Jimmy Buffet.
posted by inturnaround at 3:08 PM on June 1, 2011

This site appears/looks/feels incredibly douchetastic. Upon signup you're presented with a gender choice, and that gender choice is used to either show you the ultra-masculine manly-man side of the site, or the girly-girl side of the site.

I got the email and had the same impression. I see this as an extension of how hypermasculine the Android phone ads are, especially the Motorola and Verizon ones. If you don't use Android, you're a pussy, basically. Maybe it is an extension of how Google develops software with interfaces meant for computer scientists, a predominantly male-dominated field. There's probably a graduate-level thesis on the sexual politics of consumer electronics marketing.

Its so obvious, down to the deep voice and ass-kicking ad copy of the commercials.
posted by Ironmouth at 3:08 PM on June 1, 2011

Sorry to derail, but that doesn't disprove the fact of millions of not rich people living in Brooklyn.
posted by josher71 at 3:09 PM on June 1, 2011

"But there weren't burial pyramids for working class in Egypt."

Yeah, there were, actually. They were just generally tiny and mummy free. But "working class" meant a lot more then than it does now.
posted by klangklangston at 3:11 PM on June 1, 2011 [1 favorite]

Ferrari 2010 profit: €303m

From that report, they made that profit, and sold only 6,573 cars. That'd be €46,097 profit per car. So yeah, licensing is huge. Oh, and they also opened a theme park in Abu Dhabi. Un-fucking-real.
posted by Cool Papa Bell at 3:12 PM on June 1, 2011 [1 favorite]

I don't know. Have you been to Brooklyn? A lot of not rich people there.

Yes, there are alot of working families in Brooklyn, Families with two kids, one earner who live in 3rd floor railroad apartments. These are families that have worked, and lived their whole lives here. They get priced out by four recent grads working in coffee shops and record stores, who don't have the extra mouths to feed.

Sure there are rich people in Brooklyn Heights and Park Slope. Hell, I spent my entire childhood being driven deeper and deeper into Brooklyn as rents increased. But I'll be damned If I see working families be driven out of their homes and support that shit. I have boycotted all bars,restaurants and coffee shops in certain parts of Brooklyn and anyone with a conscience should do the same.
posted by Ad hominem at 3:16 PM on June 1, 2011 [4 favorites]

Yeah, there were, actually. They were just generally tiny and mummy free. But "working class" meant a lot more then than it does now.

Really? I stand corrected then, I suppose.
posted by JHarris at 3:17 PM on June 1, 2011

rudhraigh: "This means that if you're over 35 and make $100,000 to $200,000, Madison Avenue no longer really cares about you."

This isn't middle-class. Where I come from, this is fucking rich.
posted by dunkadunc at 3:22 PM on June 1, 2011 [1 favorite]

This isn't middle-class. Where I come from, this is fucking rich.

So this is the issue. Demographics have changed faster than everyone's perceptions of them.

This is what you think of as rich. But it isn't anymore. The US literally contains an entire economically separate country within it of many millions of people who have household incomes well above $250K.

It's like counting how many people you know who are monolingual Mandarin Chinese speakers*. Your perception is not an accurate view of the world.

* Analogy not valid for people who actually live in China. If you live in China, please substitue Urdu.
posted by GuyZero at 3:35 PM on June 1, 2011 [7 favorites]

I see this as an extension of how hypermasculine the Android phone ads are, especially the Motorola and Verizon ones. If you don't use Android, you're a pussy, basically. Maybe it is an extension of how Google develops software

I have trouble understanding what Google's UX practices have to do with joint Verizon-Motorola advertising. And this whole topic is a total derail.
posted by GuyZero at 3:37 PM on June 1, 2011 [1 favorite]

The US literally contains an entire economically separate country within it of many millions of people who have household incomes well above $250K.

Care to elaborate a bit?
posted by kdar at 3:42 PM on June 1, 2011

Middle-class swim time is over, everybody out of the pool.

Pool is in fact closed to everyone who can't afford aides.
posted by jaduncan at 3:47 PM on June 1, 2011 [5 favorites]

Ferrari 2010 profit: €303m

From that report, they made that profit, and sold only 6,573 cars. That'd be €46,097 profit per car. So yeah, licensing is huge. Oh, and they also opened a theme park in Abu Dhabi. Un-fucking-real.


On 1.9b sales from 6,573 cars that would average €289,061 per car.

That's not totally impossible.
posted by chavenet at 3:49 PM on June 1, 2011

This is good news, really, because it means a lot of us needn't bother trying, and should just get on with stuff we enjoy.
posted by tumid dahlia at 3:50 PM on June 1, 2011 [1 favorite]

So we think middle-class people will suddenly not want to play Xbox games on flat-screen televisions?

Are XBoxes and flatscreens really only for the rich in America? If so, that's fucked. I don't make much and I can afford them.
posted by Lovecraft In Brooklyn at 3:56 PM on June 1, 2011

And all the while they're cutting spending on public parks, pools, libraries...

Pretty soon the poor will have no choice but to invade the homes of the rich and play with their stuff.
posted by George_Spiggott at 4:04 PM on June 1, 2011 [5 favorites]

Are XBoxes and flatscreens really only for the rich in America? If so, that's fucked. I don't make much and I can afford them.

10 years ago they were. Then they became aspirational objects. Now they're part of the opiate fed to the underclass so we don't sharpen our pitchforks and construct our guillotines.

The things the overclass does with their money will likely seem frivolous to the underclass, or isn't even on its radar. Like having that fourth house in Jackson Hole that gets used for a couple of weeks a year. Or purchasing that twelfth automobile, the one which isn't exactly street legal in the US but that's okay because it's kept in a garage in Germany and only used at the Nuremberg Ring. And of course the private jets, the private cars (with driver), the VIP booths at sporting events and concerts (so you don't have to rub elbows with the little people)..

Not to mention the shoes and the clothes... SO much money can be spent on these kinds of things it's hard to imagine. I buy a $250 pair of Danner boots and wear them every day until they fall apart. The overclass buys a $700 pair of shoes because they go well with that one suit, and maybe wear them twice before they're forgotten or so out of style they can't be worn again.
posted by hippybear at 4:06 PM on June 1, 2011 [4 favorites]

Holy shit! 100,000 to 200,000 dollars is middle class.

Depends on where you live. I'd bet that correlation works out well for NYC. Here in flyover country that's at the top of the spectrum for middle class and maybe getting into upper class territory for someone who's not spending it as fast as it comes in.
posted by crapmatic at 4:10 PM on June 1, 2011

I'm reminded of an egregious first-class airline ad that I can't remember exactly, along the lines of "Don't fly with the great unwashed."

However, the first-class passengers are still on the same plane, if not back in steerage.

Really high-end advertising would flog private jets.

//irony (I will NEVER afford a first-class ticket)

On pyramids, the Roman aristocrat Gaius Cestius built himself a mini-pyramid which is still standing just outside the walls of Rome, at a major modern traffic intersection.
posted by bad grammar at 4:14 PM on June 1, 2011 [2 favorites]

thsmchnekllsfascists: "Was there ever any doubt about that?"

I thought I read in 1984 that porn was for the proles?
posted by pwnguin at 4:15 PM on June 1, 2011

I thought I read in 1984 that porn was for the proles?

There is nothing that could be more indicative of respect for the ruling order in capitalism than making arousal something delivered over the net on a one-to-many paid basis. Masturbating at the poorer, marginalised person getting paid to show you what [s]he has is virtually the two minute hate.
posted by jaduncan at 4:19 PM on June 1, 2011 [1 favorite]

So much for making it up in volume.
posted by borges at 4:22 PM on June 1, 2011

10 years ago they were. Then they became aspirational objects. Now they're part of the opiate fed to the underclass so we don't sharpen our pitchforks and construct our guillotines.

Wait, what? Everyone had game systems 10 years ago. And flatscreens get cheaper as the technology improves. I got mine second hand, and its great.

But hey, keep on fighting that class war. Or join us in one of the million MeFi gaming threads.
posted by Lovecraft In Brooklyn at 4:31 PM on June 1, 2011 [1 favorite]

Of course the brand is more valuable than the cars themselves. Are there numbers available somewhere on this? Because that would be fascinating to look at.

I think I read that somewhere like Trendwatch, talking about people buying into brands via the affordable accessory end of the market - prestigious fashion label sunglasses being another good example, eg for people who can't actually afford, say, a Gucci outfit, but want to portray themselves as Gucci-type people.

Here are some contradictory statements about Ferrari's accessory revenues:

A substantial chunk of Ferrari’s annual revenue comes from merchandise; some estimates claim Ferrari has at times made more money from merchandise than it has from selling cars.

versus:

About 20 per cent of Ferrari’s revenue also comes from merchandise generated largely from the Formula One team.
posted by UbuRoivas at 4:36 PM on June 1, 2011 [1 favorite]

A substantial chunk of Ferrari’s annual revenue comes from merchandise; some estimates claim Ferrari has at times made more money from merchandise than it has from selling cars.

versus:

About 20 per cent of Ferrari’s revenue also comes from merchandise generated largely from the Formula One team.

Revenue =/= profit
posted by Mental Wimp at 4:42 PM on June 1, 2011 [2 favorites]

This means that if you're over 35 and make $100,000 to $200,000, Madison Avenue no longer really cares about you.

Well, being over 35, I don't really care about Madison Avenue, so let's just call it even.
posted by madajb at 5:05 PM on June 1, 2011

In-flight magazines. I've always been intrigued by the lifestyle that those things advertise: it's all luxury cars & $20,000 wristwatches for the men, diamond jewellery & designer handbags for the women, not to mention exclusive Conde-Nast style resorts in the Maldives - a pop at only a few grand a night.

The last in-flight magazine I read had a 7 or 8 page inset ad for Indianapolis.

Feel free to draw your own conclusions.
posted by madajb at 5:09 PM on June 1, 2011 [1 favorite]

You have to make a distinction between high net earners and high net asset. The former spend money stupidly and conspicuously. The latter drive old Chevies. The former are the real target for high end merch. The latter are just a waste of advertisers' time. (Yes, I know there are exception, but in general, this holds true.)
posted by IndigoJones at 5:25 PM on June 1, 2011 [1 favorite]

A few days ago, while clearing out some stuff from an old office cupboard of mine, I came across a copy of the May 22, 1995 issue of Business Review Weekly (BRW, as it is popularly known here in Oz). It is the "Rich List" issue. If someone wants to do an analysis of the ads from back then and compare them to the latest Rich List issue (May 26, 2011), drop me a MeMail and I'll be glad to post the copies to you.

A few things that stood out for me:

1) None of ads in 1995 give a website for the company. It feels like distant past.

2) There is one ad specifically aimed at the non-rich in 1995: by Australian Stock Exchange. The copy reads "You don't need to be in the Rich List to invest in the stockmarket".

3) I haven't done a count, but it feels like the ads/page ratio was higher back in 1995. Perhaps because now there are many more avenues for the advertising dollars?

4) On a cursory glance, I didn't spot any private jet ads in 1995, but the 2011 issue has two.
posted by vidur at 5:43 PM on June 1, 2011

Gilt Groupe is a legitimate website (not an MLM front or anything else) that offers limited-time sales of luxury-branded goods. That's why there's a women's and men's section of the site; they mostly sell clothes, jewelry, and shoes (they've more recently branched out to other things, but the original aim of the site was to be an online sample sale, pretty much). I think it's actually a fantastic marketing move for Chromebooks as far as selling to young women is concerned; unlike my husband, I already have a Gilt account, and I associate the Gilt brand with profound discounts on fancy products. Bullseye.

So, yeah, call it "douchetastic" all you want, but the last time I bought from Gilt I got my favorite spendy moisturizer at 50% off its sticker price. Linking Chrome notebooks with that kind of shopping experience, getting a great deal on something I really like, rather than Best Buy or something sends me a pretty strong message that Google is taking young, fashion-aware but price-conscious women seriously as a market for these netbooks.
posted by troublesome at 5:45 PM on June 1, 2011 [3 favorites]

Linking Chrome notebooks with that kind of shopping experience, getting a great deal on something I really like, rather than Best Buy or something sends me a pretty strong message that Google is taking young, fashion-aware but price-conscious women seriously as a market for these netbooks.

I'm all for taking women seriously, but did you notice that the Chromebook is by default listed as a "Mens" item? It doesn't actually appear anywhere on the public site as far as I could tell. You have to have the invitation link to get to the page.

Even when I log in as female and click the link from the email, the Chromebook is listed under the "Mens" tab.

I don't really think they're intentionally marketing to women or taking them seriously. This is only semi-wild speculation but I don't think they're actually marketing it on the Gilt site for the reasons you think they are. I think they just chose a distributor who could handle the "invitation only" marketing and fulfill the orders - and who happened to be shiny enough and have some street cred or something.
posted by loquacious at 6:26 PM on June 1, 2011 [1 favorite]

My media habits are so tight, the only way Madison Avenue can reach me is by putting a post on Meta thread, say, about Chromebook.
posted by storybored at 6:56 PM on June 1, 2011

This isn't middle-class. Where I come from, this is fucking rich.

And in other parts of the country, $200k/year is solidly middle class.
posted by planet at 8:13 PM on June 1, 2011

And in other parts of the country, $200k/year is solidly middle class.

Every time one of those articles with someone complaining about scraping by on $200k a year it is because they can't do without a nanny and a maid coming every week and kids in $20k/year elementary schools and eating out twice a week and so on.
posted by Justinian at 8:16 PM on June 1, 2011 [4 favorites]

Every time one gets posted I mean. That sentence no verb.
posted by Justinian at 8:16 PM on June 1, 2011 [2 favorites]

The US literally contains an entire economically separate country within it of many millions of people who have household incomes well above $250K.

No, it really doesn't. The number of households with incomes "well above" $250k is under one million much less many millions.
posted by Justinian at 8:20 PM on June 1, 2011

Every time one of those articles with someone complaining about scraping by on $200k a year it is because they can't do without a nanny and a maid coming every week and kids in $20k/year elementary schools and eating out twice a week and so on.

Nobody is complaining. I'm just pointing out that it isn't rich. "Rich" doesn't mean "able to afford more than the bare essentials of life".
posted by planet at 8:21 PM on June 1, 2011

Justinian has it right. $200K is not 'solidly middle class' no matter which way you slice it. Even add six kids to the mix and you're right in the upper middle class range.

If you live in New York and make this much, you're still upper middle class, but you have more options for frittering away your income on rent. Get an apartment out on the 7 line and you'll find yourself with almost the same amount of disposable income as your colleagues in Florida or Chicago.
posted by yellowcandy at 8:22 PM on June 1, 2011 [1 favorite]

If you live in New York and make this much, you're still upper middle class, but you have more options for frittering away your income on rent. Get an apartment out on the 7 line and you'll find yourself with almost the same amount of disposable income as your colleagues in Florida or Chicago.

You're not making any sense. An upper middle class person does not have to choose between a one room apartment or living in Queens and a long commute. You're just not living particularly well at that point. You're comfortable, sure, but that's all.
posted by planet at 8:27 PM on June 1, 2011 [1 favorite]

Arab Spring is over -- time for an American Summer.

Which America are you talking about? Because the one I know is satisfied because they are close to paying off a whole 1/2 of their car...and well...did you hear about how cheap the newest taco bell deal is?
posted by hal_c_on at 8:42 PM on June 1, 2011 [1 favorite]

Wait, what? Everyone had game systems 10 years ago. And flatscreens get cheaper as the technology improves. I got mine second hand, and its great.

But hey, keep on fighting that class war. Or join us in one of the million MeFi gaming

You're missing the point. It's not about some stupid ass game console, or a TV.
The rich concern themselves with things like dredging a deeper inlet into a lagoon (and building a bigger draw bridge in place of the old one) because their yacht is too damn big to go through the existing one. Oe that the newly built international airport on St.Martin does not have enough room to park all the private jumbo jets.
You can afford a big screen TV? Good for you. Come to Annapolis boat show sometimes and compare your TV to one of those that hang on african mahogany walls of the superyachts.
posted by c13 at 8:43 PM on June 1, 2011 [2 favorites]

My SO got a really nice set of fancy undies for like $10 on gilt. They're cool in my book.
posted by thsmchnekllsfascists at 9:15 PM on June 1, 2011

You're missing the point. It's not about some stupid ass game console, or a TV.
The rich concern themselves with things like dredging a deeper inlet into a lagoon (and building a bigger draw bridge in place of the old one) because their yacht is too damn big to go through the existing one. Oe that the newly built international airport on St.Martin does not have enough room to park all the private jumbo jets.
You can afford a big screen TV? Good for you. Come to Annapolis boat show sometimes and compare your TV to one of those that hang on african mahogany walls of the superyachts.

Well, yeah. That is my point. Even middle-class income is way beyond what I expect to earn in my lifetime. But I've still got that consumer crap.
posted by Lovecraft In Brooklyn at 9:26 PM on June 1, 2011

Even middle-class income is way beyond what I expect to earn in my lifetime. But I've still got that consumer crap.

Yes, but...

Do you have a new car? Do you have a retirement account you pay into every pay period? Do you have health insurance that covers vision and dental? Do you have a mortgage on a house you will eventually own? Is your furniture bought new and coordinated, or bought used or piecemeal? What kind of clothes do you own? Do you regularly buy up-to-date fashions? Do you get your hair done at a salon or full-service barbershop, or do you go to Great Cuts? Do you have a washer and dryer in your house or do you have to use coin-op laundry services, either in your condo/apartment building or at a laundromat?

Middle Class isn't just about the consumer crap. It's about being able to afford an entire lifestyle which means you don't have to regularly think about money and that you're creating a life and nest egg for yourself which means you won't have to struggle or worry in your later years. It also means that you can indulge in a kind of life which helps support service industry businesses, which of themselves provide livelihood to many service workers (which only works if there's a strong enough middle class to provide patronage to such businesses).

Madison Avenue wants you to spend your disposable income on the consumer crap. They'd LIKE you to do this every 3 years or so as the technology progresses and what you have becomes "out of date". They force you to buy goods which are designed not to last as long as they could through planned obsolescence. They create tiers of things you can buy which will fit a variety of incomes and try to make you feel fulfilled at whatever spending level you can afford. Most important, you NEVER save money and you ALWAYS are tempted to spend slightly more than you actually make. That way all your income is going into the economy and you're building chains of debt which bind you to your job for the foreseeable future.

But yeah. Having the consumer crap... doesn't mean anything. It's whether you're building real value in your life or not.
posted by hippybear at 9:41 PM on June 1, 2011 [11 favorites]

Nobody is complaining. I'm just pointing out that it isn't rich. "Rich" doesn't mean "able to afford more than the bare essentials of life".

"Rich" means lots of different things to lots of different people. Even in places where $200,000 is the median income, poor people who live in the same area code as those people will still call those people "rich". Just because you live around a lot of other rich people doesn't make you middle class. I mean, except from a mathematical perspective.
posted by 23skidoo at 9:48 PM on June 1, 2011 [1 favorite]

The US literally contains an entire economically separate country within it of many millions of people who have household incomes well above $250K.

I don't think you understand what "literally" means.

Italy, for example, literally contains an entire economically separate country within it: the Vatican City.

The word you are probably looking for is "figuratively", which is the exact opposite of "literally".
posted by UbuRoivas at 10:01 PM on June 1, 2011 [4 favorites]

If you have $200 000 and then pile it up and burn it, you are still rich; you just spent your money unwisely. You had an income of 200 000 dollars and you threw it away. Similarly, if you manage to squander that income on rent in NY and two cars and gas and a Whole Foods diet and private school for your kids (and no doubt nightmarish health insurance premiums) and whatever else, you were still rich before you frittered it all away. Rich doesn't mean "having a lot of money left over." Rich means having a lot of money. 200k/year is a lot of money, full stop.
posted by mek at 10:18 PM on June 1, 2011 [1 favorite]

Hi, just popping in to say that if you make $100,000-$200,000 a year, you're not middle class, even if you live in New York City. Indeed, if you make over $150k or so you're in the top 5% of earners. If you make over $88k you're in the top 5th.

Just thought I would insert a little sanity into this discussion. Every time the question of income comes up, people always talk about upper middle class like it's a thing, and apparently think that so long as you're making somewhere under $300k you can claim to be merely in the upper echelons of the middle class.

I mean, I get that there are people who are insanely, crazily rich, I really do. But if you could take your salary, subtract the national median household income of around $50k from your salary and still have six figures left, then you aren't middle class. Not even close.
posted by Deathalicious at 10:28 PM on June 1, 2011 [8 favorites]

Depends where you live, Deathalicious. If you have to pay high rents and can't live elsewhere due to work it's hard to see it as that well off. I think one would have to at least start assessing it by level of disposable and/or discretionary income.
posted by jaduncan at 10:34 PM on June 1, 2011 [1 favorite]

This is what you think of as rich. But it isn't anymore. The US literally contains an entire economically separate country within it of many millions of people who have household incomes well above $250K.

Yeah, but that's only because there are many, many, many millions of people in the US.

If you are in the top 5% of earners, are you in the middle? Even close to the middle?

If only there was some word for people who make significantly more money than average -- enough money that they have a higher income than ninety-five percent of the US population

Oh wait, we have a word for that. That word is rich.

I don't know why some people are so uncomfortable with applying the term "rich" to people who actually are.
posted by Deathalicious at 10:42 PM on June 1, 2011 [6 favorites]

Yeah. If people are interested in the gini coefficients of places, this is a fun map. Short version: the lower the coefficient, the more equitable the society.
posted by jaduncan at 11:18 PM on June 1, 2011 [3 favorites]

On postview:

Depends where you live, Deathalicious. If you have to pay high rents and can't live elsewhere due to work it's hard to see it as that well off. I think one would have to at least start assessing it by level of disposable and/or discretionary income.

The thing that always seems strange to me about that is that poor people live/work pretty much everywhere, so somehow a family making minimum wage is managing to live in an area where apparently it's impossible to have a "working class" existence for less than $100k. So while I agree that money goes much farther in certain parts of the country than it does in others, I still don't buy that the definition of middle class is really that flexible.

Let's consider that in certain parts of the country a person making $100k might have housing costs of, say, $3k per month which means they have just $64k left over (not counting taxes) whereas someone paying around $1,250 a month in housing costs could have a starting salary of $75k and both households would have the same amount of "disposable" income. Both of them would still have more money left over, after housing, than a household making the median income of $50k.

And let's not forget that in the context of this post, $100,000 is seen as the lower end of this scale. Once you hit $150k or so, even if your rent costs are $5k per month you still have more money left over to make up nearly 2 median household incomes.

I'll bow out of this as I am pretty much a one-trick pony when it comes to these discussions. Basically, while I agree there needs to be more attention targeted at the ultra-wealthy, I feel it's highly problematic to lump households making 2-3 times the national average into the middle class. It dilutes what it means to be middle class and it weakens it. The middle class's share of national wealth is shrinking and its political voice is getting weak enough as it is. It doesn't need rich people claiming membership and subverting its interests.

Let's say one day we realize just how messed up things are, and in order to ensure that everyone from the poor through the actual middle class can have access to things like public education, some form or public transportation, etc. we actually need to raise taxes on everyone earning above the top 5% -- starting at $170k. "You can't do that!" say the people making $175, "we're middle class! And speaking personally, solidly middle class!" And so suddenly, not raising taxes becomes a "middle class" issue.
posted by Deathalicious at 11:18 PM on June 1, 2011 [8 favorites]

Oh, I'm a left wing European, so I'm by far on the side of progressive taxation levels. I also lived homeless in NYC for a while :) and that was interesting.
posted by jaduncan at 11:21 PM on June 1, 2011 [1 favorite]

it's impossible to have a "working middle class" existence

FTFM
posted by Deathalicious at 11:23 PM on June 1, 2011

I mention this to make clear that I know it is not at all impossible to be poverty-struck in NYC.
posted by jaduncan at 11:23 PM on June 1, 2011 [1 favorite]

Well, everyone always wants higher taxes ... on people richer than themselves. If you hang out with BMW-and-chardonnay liberals, most of them want "progressive" taxes, but they'd like the inflection point to be north of what they're making, thank you very much. So it goes.

But what's interesting is that even with this attitude, you would expect that at some point you'd have enough people on the "screw the bastards" side of the equation that it would have the supermajority support to pass. E.g., soaking the top 10% would seem to benefit 90% of the population, but you won't find nearly that much public support for it.

That's the crux of the whole thing, and while "corruption" is the simple explanation and is undoubtedly part of the problem, I don't think that's it. It's a strange sort of apparent solidarity that the middle and much of the working class have, not with those worse off then themselves, but with those much better.
posted by Kadin2048 at 12:11 AM on June 2, 2011

Well, everyone always wants higher taxes ... on people richer than themselves. If you hang out with BMW-and-chardonnay liberals, most of them want "progressive" taxes, but they'd like the inflection point to be north of what they're making, thank you very much. So it goes.

I disagree. I'd rather pay the tax rates I do and have the welfare state/NHS/whatnot I do. Let me be absolutely clear about that. I'd also rather pay more and have the state provide my train/bus/light transit on a nationalised basis, make UK dentistry free for all at the point of use, and to have the state provide my utilities again. That's not for me; I'm a final year Cambridge law student and will probably be able to take care of myself. It's for the people who can't, and I say that knowing that I would have to pay more. I want to live in an economic Sweden.
posted by jaduncan at 12:16 AM on June 2, 2011 [3 favorites]

I'd pay more a lot more in taxes for single-payer healthcare and modern transportation infrastructure and heavy funding of pure science, applied science, and the arts. I'd pay with with a smile.

See, that shit's an investment - it will make me richer in the long run, in terms of lifestyle and increasing my personal income.
posted by Slap*Happy at 8:25 AM on June 2, 2011 [5 favorites]

Also, 100k-200k is solidly middle class - upper middle class at the high end, but middle class.

The problem isn't rich people thinking they're middle class, the problem is poor people believing they're middle class. People are not being paid an honest wage for their labor.

Any law-abiding highschool graduate who puts in an honest 40 hours a week deserves to own their own home (or a condo suitable for a family), a new car, furniture that comes from a furniture store, wholesome food, healthcare, dentistry and two weeks of vacation... all with some left over for savings and investment.

That's the starting point for a lower-middle-class lifestyle, and if you don't make enough money to live it, no matter what you do, from digging ditches to washing dishes - you're being ripped off.
posted by Slap*Happy at 9:12 AM on June 2, 2011 [1 favorite]

two weeks of vacation

Annually?!?? Fuck that for a joke! That's not even poverty; it's slavery.
posted by UbuRoivas at 10:01 AM on June 2, 2011

If you hang out with BMW-and-chardonnay liberals, most of them want "progressive" taxes, but they'd like the inflection point to be north of what they're making, thank you very much.

I hang out with those people and the attitude is more along the lines of being OK with paying higher taxes than people earning less than they do. Many seemed peeved to being paying higher taxes than people earning more than they do though. There is is sort of a bubble with those people in the upper middle class paying higher taxes as a percentage of income than the truly rich. Some of it is the funny way in which deductions are phased out based upon income and some due to the relative income from capital gains versus salary or business income. Anyway, getting back to your original point, no everyone wants the other guy to pay.
posted by caddis at 10:08 AM on June 2, 2011

Any law-abiding highschool graduate who puts in an honest 40 hours a week deserves to own their own home (or a condo suitable for a family), a new car, furniture that comes from a furniture store, wholesome food, healthcare, dentistry and two weeks of vacation... all with some left over for savings and investment.

That's the starting point for a lower-middle-class lifestyle

If that's how you define "middle class", then $100,000 - $200,000 a year is stinking rich. You don't need anywhere near $100,000-$200,000 a year to live like you described.
posted by 23skidoo at 10:57 AM on June 2, 2011

See, that shit's an investment - it will make me richer in the long run, in terms of lifestyle and increasing my personal income.

Compare this to Grover Norquist's philosophy, which holds that we all somehow singlehandedly generate our own wealth:

“Taxes are when the government takes away what you create with your own work effort and time,” he said in an interview. “That reduces your liberty.”

posted by Mental Wimp at 11:35 AM on June 2, 2011

No, you need 60-70k, and that's only if you rent a tiny or neglected apartment, or settle for buying a fixer-upper in a bad neighborhood.

There is a profound difference in lifestyle between a household that pulls in even $300k, over one that pulls in under $200k. 100-200k simply isn't rich - and there should be far more households making that kind of money.

Ideally, income distribution should be a diamond, wealth measured vertically, percentage of the population measured horizontally. The exact middle should be vastly thicker than the apex or the base - but in the US, it's looking more and more like a pyramid. The upper-middle-class, the section that used to be just above the equatorial bulge of the diamond, didn't suddenly become rich - they found themselves decreased in number as everyone else became dramatically poorer. This is why they're no longer being marketed to. This is not a good situation - as their numbers dwindle, the base on the pyramid grows, and the diamond of American prosperity disappears.
posted by Slap*Happy at 11:39 AM on June 2, 2011

You don't need anywhere near $100,000-$200,000 a year to live like you described.

You do -- or at least you have to be pretty close to that ballpark -- if your job doesn't have a pension (which they won't), you want to send your kids to college (which most everyone does), and you want to be able to stop working and enjoy retirement before your brain turns to mush.

That lifestyle is certainly available if you route all or nearly all of your income to expenses, but one of the major issues we're having in this country is that the savings rate is really low.

If you want to retire at 65 and live a $~50k/year existence until you're 85, you need close to a million bucks at retirement -- and that's if you're okay with running yourself down to zero, meaning you may get stuffed into some Medicare death camp nursing home if you outlive your expectations and your health isn't good.

To have that nest egg, at a 5% long term interest rate (which seems fairly reasonable going forward), someone would need to contribute about $9k per year over the course of a 40 year working life. If we assume a 10% retirement-savings rate, which is pretty high relative to what a lot of people actually contribute, that means $90,000 pa in income (or $45/hr, full-time). But that's if you start saving immediately on joining the workforce at age 25 ... if you can't start until you're 30, which isn't unreasonable given college debt and other factors, then it's $11k a year going to retirement. That's tough to swing for a lot of people if they're not making over $100k/year.

There are a whole lot of people who consider themselves to be middle or even upper-middle class because we make it pretty easy to live comfortably on a cash-flow and debt basis, who may be looking at fairly uncomfortable (or no) retirements.
posted by Kadin2048 at 11:43 AM on June 2, 2011

No, you need 60-70k, and that's only if you rent a tiny or neglected apartment, or settle for buying a fixer-upper in a bad neighborhood.

Sorry, you're wrong. Meet more people. Like ones who make less than 60-70k, own nice cars and condos in nice neighborhoods, and still do all the things you described. I'm talking about actual people that I actually know.
posted by 23skidoo at 11:58 AM on June 2, 2011

Meet more people. Like ones who make less than 60-70k, own nice cars and condos in nice neighborhoods, and still do all the things you described.

A lot of it depends on where you live. The impression I get is that if you live on Manhattan, $60K would maybe allow you to live in a broom closet. If you live in a smallish town in the Intermountain West, it will allow you to own a 4-bedroom ranch style in town and two cars.
posted by hippybear at 12:04 PM on June 2, 2011

No, you need 60-70k, and that's only if you rent a tiny or neglected apartment, or settle for buying a fixer-upper in a bad neighborhood.

My mom still owns the house I grew up in, and it was hardly a fixer upper. It was a generic suburban home like you'd see all over town, and is currently appraised at about $180,000. Her income of ~$32,000 is mostly sufficient to afford in what you called the basic rights of high school graduates: health care, vacation, home in a great school district, children in college, and retirement savings. What it doesn't get her is a yacht in an ocean two thousand miles away.

Of course, this wouldn't fly in NYC or California, and I don't think any of us expect it should. That old house, if located there instead, would cost north of a million dollars. The property tax alone would bankrupt her. You can't have any serious argument about this without a discussion of CoL indexing.
posted by pwnguin at 12:26 PM on June 2, 2011

Yeah, I was recruited for a job in Reno, NV, a few years ago, and tho I'd take a big pay hit over what I make in coastal New England, I'd have a ton more disposable income, a very nice house and more money to invest.

On the other hand, job openings for the kind of work I do are very scarce in that part of the country, too... so if the company folded, and it did, I'd be royal screwed.
posted by Slap*Happy at 12:50 PM on June 2, 2011

Yep, that's one of the big advantages to working in a metro area; I think after a certain point it really helps, as the odds of two job openings in the same niche increases. Of course, Reno's also taken a huge property value hit. Guilt by association to LV I guess.
posted by pwnguin at 1:41 PM on June 2, 2011

Oh, man. I am so going to Ferrariworld.

Just because.
posted by rokusan at 2:02 PM on June 2, 2011

It'd be fun if they had little Ferrari dodgem cars.

Only, if you make the mistake of bumping into another one & slightly denting your fender, you're up for $20K in repairs.
posted by UbuRoivas at 2:06 PM on June 2, 2011 [1 favorite]

Any law-abiding highschool graduate who puts in an honest 40 hours a week deserves to own their own home (or a condo suitable for a family), a new car, furniture that comes from a furniture store, wholesome food, healthcare, dentistry and two weeks of vacation... all with some left over for savings and investment.

Except that this is *not* how we define classes. This is a set of aspirational statements.

While there probably ought to be a connection between the definition of middle-class and lifestyle, there is not. Income is the defining feature of this category.

You've been beheaded by Hume's Guillotine.
posted by yellowcandy at 2:28 PM on June 2, 2011

The future for middle class americans is a J.G. Wentworth ad stomping on a human face forever. -drezdn

This will drive my dog fucking bats.
posted by Fezboy! at 2:50 PM on June 2, 2011

and this time with a proper lnk: fucking bats
posted by Fezboy! at 2:51 PM on June 2, 2011 [1 favorite]

From your very link on Hume's Guillotine:

Not all philosophers agree that Hume's Guillotine is a real problem, or that it is correctly described.

Some philosophers believe that certain types of "is" statements may imply or infer "ought" statements. For example, any statement that corresponds to a human goal or value, especially (or exclusively) one connected to human behaviour, suggests that certain "ought" statements have validity.

We're not talking about epistemology, here.
posted by Slap*Happy at 3:04 PM on June 2, 2011

While there probably ought to be a connection between the definition of middle-class and lifestyle, there is not. Income is the defining feature of this category.

If anything has come out of this discussion, I think it's that class definition is a very amorphous thing, at least in the US & similar societies without any significant feudal remnants, and trying to tie it to income is just an exercise in endless demarcation disputes.

Indeed, it's one of the ideological failings of Marxism since at least the early decades of the 20th Century, that people who are - by definition - "working class" (in that they own no significant income-generating capital but rely only on selling the fruits of their labour) have aspirationally redefined themselves as "middle class" based solely on lifestyle & income.

In theory, the middle class (bourgeoisie) definition should be restricted to small-time capitalists, eg small business owners & self-employed professionals. The upper class would be big-time capitalists & what remains of the feudal landed gentry. Everybody else is strictly proletariat.

Having said that, I'd suggest a breakdown roughly along the following lines:

Underclass = the homeless, people on welfare, or in precarious underpaid, usually casual and/or part time work. Almost no real chance of being able to afford good education, healthcare, or property ownership.

Lower middle = relatively stable income "working for the man" & may be able to afford healthcare & education, but struggle to save money, living hand to mouth from paycheck to paycheck, and find it difficult to break into investment markets (eg real estate or stocks).

Upper middle = better paid and/or self-employed, can definitely afford healthcare & education, and have enough left at the end of the pay cycle to put something away for investment. These are basically a hybrid of working class & capitalists, in that their income is derived from both sources.

Upper = have no actual need to work, but instead could - if desired - just live off accumulated capital investments. Essentially, this was what the landed gentry used to do, and later the capitalists.
posted by UbuRoivas at 4:18 PM on June 2, 2011

Well, this may be true for high ticket products and services; but the middle class is still spending a lot more in the aggregate (because there are more of us) than the rich. Madison Ave has done the math, and continues to go after the high dollar ad spends -- not just the high margin luxury products and services.

We see this every day at our Austin SEO services company -- in the cost of specific keywords in clients' Pay Per Click campaigns. Although luxury-related keywords (e.g., 'lexus', 'rolex', 'gucci', 'prada', 'day spa', 'yacht', 'hong kong vacation') are expensive, there hasn't been a big jump this year. On the other hand, retailers of mid-market products and services are now spending more online (in the more competitive pursuit of fewer consumer dollars); these keywords ARE getting more expensive.
posted by SemanticAd at 2:38 PM on June 23, 2011