A Public Benefit Project by the Living Wage Institute in partnership with the Charles L. Shor Foundation
The American middle class has always been about more than what a family earns. It's a vision of the life that steady work is supposed to make possible: enough for today, and something to put away for whatever comes next.
That vision was designed more than 80 years ago, and it has never been formally updated. What’s changed is everything around it: the costs, the economy, and what it actually takes to get there.
Part One
After World War II, working families were promised a dream: if you worked hard, you could own a home, give your children a better shot, and retire with something to show for it. For millions of families, the dream held. Mass homeownership, union wages, and wider access to college built a broad, stable middle class, and in turn, helped create the most formidable economy the world has ever known.
But the postwar boom didn't reach everyone equally, and the gaps it created have lasted. The economy it was built for, however, is gone for most families regardless of background. Core costs have outpaced wages, leaving little room to save. Yesterday’s American Dream has become today’s mirage, seemingly unattainable and slipping even further out of reach.
54% don't believe that everyone in this country has the opportunity to achieve the American Dream.
60% say they do not currently have enough income to lead the kind of life they want.
The deal has changed, but the definition of the middle class hasn’t. Today, we can’t tell whether a job, a policy, or a paycheck actually gets a family to the middle class. We can’t measure progress toward a goal no one has defined.
Part Two
There's no official definition of “middle class”. What’s yours?
Part Three
If your definition of the middle class includes financial security, you're in good company. Three decades of surveys show Americans broadly agree on what the middle class requires: not having to worry about your financial future.
In 1991, 46% of Americans said saving money for the future was essential to being middle class. By 2023, 91% did.
However, not all aspects of the definition are settled. 67% say vacations are part of a middle class life; 46% say eating out is. For some, a dinner out or a week away makes life feel middle class, but for others, it's lifestyle creep. Attitudes toward homeownership tend to move with the economy: 45% called it essential in 2012, after the financial crisis; by 2023, that number was back up to 60%.
Still, the items most people agree on are exactly the things they feel slipping away. Any widely accepted definition of the middle class has to hold those things firmly and leave space for each household to decide what else belongs in their version of middle class life.
Part Four
Researchers have tried to measure who is in the middle class in America in three ways. Each answers a different question, but none adequately explains why so many people feel the middle class is deteriorating.
A modern measure of the middle class needs to answer some dimension of all three of these questions.
Who's in the middle?
The most common approach counts who sits in the middle of the income range. Pew Research Center, for example, uses two-thirds to double the national median household income. It's simple and easy to track over time, but it only shows where a household ranks relative to all others, not what the money they have actually buys.
Who feels middle class?
This approach looks at the beliefs people tie to the middle class: security, mobility, the dignity of work, community. Some draw the line at a four-year degree; others at a white-collar job. It captures lived experience, but the markers shift with the economy, place, and who you ask.
What does a household buy, now and later?
This approach measures consumption: what a household can actually pay for today and over a lifetime. It's the closest way to measure lived experience, but affording something doesn’t automatically make it a marker of the middle class.
Part Five
Being middle class means having enough to meet today's needs and room to build security for tomorrow.
The Living Wage Institute defines the middle class as the standard of living at which a family can meet its present needs with enough margin to make choices based on preference rather than necessity, while also building financial security for the future.
This definition rests on three core principles. First, it's built on choice: people agree on the core of middle class life and disagree at the edges, so the budget sets aside money for things like travel and dining out and leaves the mix to each household. Second, it keeps the option of a family: the budget doesn't assume you have kids, but it's sized so that having them is a choice. Third, it's place-based: the budget reflects what things cost where a family lives.
So what's actually included in a middle class budget? Two tiers of goods and services that capture what you need today and what you need to prepare for tomorrow.
Tier 1 accounts for your financial stability. That means covering your family’s current needs with enough margin to make choices based on preference, not just necessity.
Tier 2 accounts for your financial security. That means being able to absorb shocks and surprise expenses, and build savings for the future.
Coming in 2027
A modern, needs-based middle class definition is where this project starts. In 2027, we’ll be launching the Middle Class Index to translate this definition into a concrete, place-based income threshold for what middle class membership actually costs today, in every corner of the country.
You'll be able to see what a middle class life costs where you live, how many families in that county actually earn enough to cover the costs, and see it in context against your own income.
Sign up to be notified when it launches.
The Middle Class Index is a collaboration between the Living Wage Institute (LWI) and the Charles L. Shor Foundation (CSF). LWI is developing the methodology and the index, and CSF is funding the work as partner and supporter. Together, we're working to define what a middle class life requires in America today and to measure what it costs in communities across the country. The Middle Class Index is a public benefit project intended to be refreshed over time.
The Living Wage Institute is a benefit corporation building the data and tech-enabled services that help every employer design compensation and benefits that work for workers and business. We are committed to building an America where every worker can meet their family's basic needs. Our living wage data is used by employers, researchers, and policymakers to understand what it takes for a family to cover its basic needs where it lives. Producing it means pricing a household budget line by line, place by place, and for different family types. The Middle Class Index uses that same approach to answer a harder question: what it takes for a family to cover today's needs while also building toward the future.
The Charles L. Shor Foundation helps individuals enter, sustain, and advance within the middle class, with a focus on skilled trades, durable manufacturing careers, and practical economic mobility. Its research and data arm, the Blue Collar Dollar Institute (BCDI), studies the wages, workforce pathways and economics behind those careers. The Foundation’s programs, including scholarships, emergency support, hands-on learning, credentialing, and employment pipelines into the trades, put that research to work.
Efforts to help people enter and stay in the middle class need a clear, shared picture of what they're aiming for. The Middle Class Index is meant to provide one: a transparent, place-based measure that communities across America can use to understand what a middle class life costs. The full index launches in 2027.
