BACK • 
Everyone Can't be Middle Class
If you ask the average American to classify him or herself, they're most likely to say that they're "middle class." The vast majority of Americans will willingly accept that title, but obviously, mathematically, only about 20% of us can be middle class if you divide things up in the range of poor or near poor, lower middle class, middle class, upper class and rich to near rich.
A recent nationwide survey by the Gallop poll and CNN/USA Today, found that, by income, the average middle class household earns around $40,000 total in income, the lowest bracket covers no earnings at all up to about $17,000-- the lower class definition by income is about $17,000 to $31,000. Middle class, by this survey is around $31,000 to $49,000, upper middle class from $49,000 to $76,000 and that top 20% bracket, over $76,000. Interestingly enough, this survey found that middle class households tend to be clustered right here in the middle west as well as the east and west coast.
Who are these households, anyway? The survey found about 75% are white, 11% are black, 9% are Hispanic. About 30% of the households are married, with no children under 18, 25% are married with children under 18, and 15.5% have children under six.
What kind of home does the "average" American live in? The average amount of square footage is right around 1,800 in the average home, within that, 39% of the homes have two or more bathrooms, 38% have two or more cars, and almost 60% have a garage.
How about educational levels? Of those who are statistically in the middle class, 13.3% of the heads of household over 25 years of age have less than a high school education. About 35% of the household heads have a high school degree, 20% have a Bachelors or Masters degree and only about 1.5% have a PHD or a professional degree.
Finally, how about employment levels? 42% of the middle class households polled have one primary earner. 41% have two primary income earners, and they estimate that their average weekly time at work is about 41 hours.
How about expenses? Well, according to the survey, monthly housing costs average about $635.00, they spend about $70.00 a month on electricity, about $50.00 a month on gasoline, and annually, a little over $700.00 to heat their homes, and they pay an average property tax of about $1,200.
Well, there you have it. At least, a numerical and financial rough sketch of what the "average' American looks like or what the American who thinks they're average looks like. I'm never quite sure what these surveys prove, but I always find them kind of interesting and try to see where I measure up against the various brackets.
* * * How's the stock market doing now? Following up a bit on last week's article, I think the market is doing a bit better, and is likely to continue doing a bit better, exceeding everyone's still very pessimistic expectations. As noted last week, just as we were too optimistic a year ago, now people are generally too pessimistic. Remember, just because the Fed has cut, that doesn't mean that the news will change overnight; the "news" is really old, that is to say, the news about the fourth quarter of last year and the weakness that developed is not news, it is in fact, history. Similarly, even when companies warn about the current weakness of the first quarter, this is really not news either. It is the obvious result of the current weakness.
My bet is that with the Fed cutting, the stock market will start to look to the future. It usually does look 3-6 months to the future anyway, and 3-6 from now, the economy should start to improve. One of the grand gurus of the Bond world, Bill Gross of PIMCO, thinks that the Fed may cut as much as another two points before they're through. That would make for a pretty good environment for stocks, at least on a historical basis. Sure, there'll continue to be some bad news-which is why the Fed is cutting. After all, the Fed does not cut during good times. Despite the existing negative news, my bet is that the Fed wins. That, at least, has been the historical record, and with no guarantees out there, history still proves to be our best guide.
(Tom Butenhoff is a First Vice President with J. E. Liss and Company, Inc.
in Milwaukee. The views are his, and not necessarily those of Liss
Financial Services or the Job Connection/Hiring
Network.)