I think that has more to do with politics than economics. $250K is an income limit that is politically expedient.
To call yourself middle class when you're making 5x the media household income is kinda silly. And yes, I know many live in HCOL areas.
A lot of people who "make" $200K in gross income are often working jobs which require them to cover a lot of large expenses (such as vehicles/equipment) out-of-pocket, or are running their own businesses[2].
This doesn't make any sense to me. Your gross income is your gross income. Nobody reports what their business revenue is as gross income. You need to take out expenses first.
Cost of living matters a whole lot, though. You'd have a higher standard of living in Cleveland at $100k than in San Francisco at $250k.
This is a good example of how "standard of living" is kind of a meaningless concept -- to someone who values "enough backyard to play catch in," you're correct; to someone who values "not living in Ohio," you're completely wrong.
That’s a hyperbolic exaggeration. If you pay for a 2 bedroom apartment, transportation, food (even if the SF person only shops at Whole Foods or wherever), utilities, comparable health insurance, etc., then the SF person on a $250k salary is going to have considerably more left over to spend on whatever else they want.
The price of a two bedroom apartment in SF will get you a 3,000 sq ft house with a quarter acre of land elsewhere.
>double the rooms...for little tangible advantage.
I grew up in a mixed-class suburb, and many of my friends were the children of professionals (doctors, dentists, lawyers, businesspeople, etc.) with very large houses. So yes, I understand that some people think it’s important/useful to have a large house. None of them seemed to have a higher quality of life than my friends whose parents were professors, artists, teachers, etc. and lived in “normal-sized” 1000–1800 sq. ft. houses. In general, the large-house parents worked all the time, commuted longer distances, spent less time with their kids, and seemed generally less happy. On average the kids were probably also somewhat less happy. Having a big house, and having fancier material possessions more generally, isn’t really the most useful priority for most people to meet their primary life goals, in my opinion. YMMV.
At a world-wide scale, if every family needs to have a 3000+ square foot mansion on a separate lot, we’ll stay on track to wreck the planet.
Your opinion here really only matters on the order of 1/300millionth of the whole.....
It amazes me that Texas and Florida professional sports teams aren't overwhelmingly dominant, given that the contracts that they can pay athletes are effectively 10-25% better than other states, due to lack of state income tax.
To take a simplified example, if you lived in low-tax Nevada, but traveled to high-tax/high-population California to play shows, you're earning money based (at least in part) on the large audience in California. Why shouldn't you pay California part of that revenue?
If someone said, we'll I'm middle class with my $1M income because my salary doesn't go very far in Beverly Hills, would you agree?
Well, sure, that's true. But it's also possible the most important thing you're getting is a high paying job that wouldn't be available in a less expensive area. And it's possible that, like me, you would consider living in a dense city to be more downside than up.
It occurs to me a large factor in whether or not I'd consider people on the borderline either middle class or wealthy has to do with how much flexibility they have in then income. If you're getting a quarter million dollars every year from a trust fund and can live wherever you want, you're wealthy. On they other hand, if you and your spouse are grossing a quarter million dollars a year from jobs that requires twelve hour days in a very expensive city you don't necessarily like (and don't see much of in any case), you're middle class.
$200K is definitely considered middle class in the US, especially by the left. For example, both Clinton and Sanders use $250K as their upper limit[0].
As for manual labor vs. white collar - it depends on what context you're talking about, but in terms of sheer economic purchasing power, that doesn't really matter that much. (Incidentally, a lot of white-collar office jobs pay a lot less than many blue-collar positions). There's definitely a class and status aspect to the term 'middle class', but that's much harder to quantify (and is also only loosely correlated with income - hence the existence of the term nouveau riche.
As an aside, $200K isn't necessarily as much as people think it is, which is (one of the reasons) why people like Clinton and Sanders consider $250K to be middle class[1]. A lot of people who "make" $200K in gross income are often working jobs which require them to cover a lot of large expenses (such as vehicles/equipment) out-of-pocket, or are running their own businesses[2]. While they might seem rich if you just look at the $200K figure, that doesn't mean they're really rich in any meaningful sense of the word - even if they're frugal, they could still be living quite hand-to-mouth on that amount.
[0] http://money.cnn.com/2016/02/18/news/economy/clinton-sanders...
[1] There are more cynical, political reasons for doing it as well, but there is a factual justification for it as well.
[2] I'm not talking about startups, but genuine 'small businesses', for which they're often the sole proprietor or one of very few partners.