I live in the heart of the "cheap, low cost" Midwest and there is nothing within 200 miles of me that rents below $650/month -- and even at $650, your talking about old, poorly maintained, single bedroom or studio flats.
Yes, there are lots of cheap 50k-100k houses. But what everyone forgets is the upkeep on those houses is enormous. You might have a $800/month mortgage payment on a 3 bedroom house, but also have to pay another $500-$1,000/month upkeep on that house.
My "cheap" Midwest home in Michigan (2br, 1350sqft) costs $1700/month in mortgage+upkeep. An luxury apartment in a downtown Seattle (2br, 850sqft) can be had for $1800/month. 40% higher wages on the coast, and only an extra $100/month in housing costs. (Zillow: http://bit.ly/1sx9LH2)
You won't save a lot of money on rent/living expense in the Midwest, you'll just get a lot more empty house space "for free". That's great if you need lots of empty space (for kids and such). But otherwise, the cost of living difference is not nearly as large as people pretend it is.
Yes, the literal dirt a building sits on is cheaper away from the coasts (land value). But that's literally the only difference in cost -- nearly everything else is more-or-less the same price (including home and building expenses, professional services, food, clothing, electronics, etc).
Some are even more expensive in the Midwest (home repairs and maintenance, nearly all utilities, etc)
(I was elated, because housing here is half as expensive as where I was from!)
In US in 2011, that meant a household making between about 20k and 100k. So yes the middle class is huge (60% of the population by definition), and 40k is right in the middle quintile (between 38k and 62k). Not upper-middle-class, but not "minimum wage working class" either.
http://en.wikipedia.org/wiki/Household_income_in_the_United_...
http://www.nytimes.com/2014/04/15/business/more-renters-find...
You can surely get by on $40k a year. With my Master's Degree in Social Work from one of the best schools in the country, my best paying jobs were about $33k, but 2 bedroom apartments for $350 are gonna be hard to come by.
- There's a huge range to "middle-class". Consider whether your idea of "middle-class salaries" is in fact upper-middle-class. Remember that most of the middle class cannot afford to drive Priuses and BMWs.
- In a lot of the United States, cost of living is a hell of a lot lower than the Bay. When your rent is $350/month for a two-bedroom flat and your car cost $5k, $40k might not be so bad after all.
- The figure quoted is starting wage. It goes up from there, and twenty-year-olds don't yet need quite as much to live comfortably as they will later.