Can you be middle-class and earn $250,000?
http://www.newsweek.com/id/155951
Sorry, Pal, You're Rich
Can you be middle-class and earn $250,000?
Aug 27, 2008 Updated: 7:42 p.m. ET Aug 27, 2008
As we know from the work of Cornell economist Robert Frank, people rate their well-being not so much based on how much they make and consume, but on how much they make and consume compared to their neighbors.
After all, you have to compete with them for status and for important positional goods such as housing and schools.
And here the CNBC crowd has a point. It is certainly true that in a few ZIP codes and neighborhoods, brandishing a $250,000 salary is like bringing a knife to a gunfight.
There is a significant number of rich people—including a healthy contingent of filthy rich people—in places like New York City and San Francisco.
If you want to live in a neighborhood where starter homes cost $1 million, and you want to send your kids to private schools, and you want to go on great vacations and have a beach house, then $250,000 likely won't cut it.
For people in this situation, the knowledge that they're doing better than 98 percent of their fellow Americans is little solace when the investment banker down the street has just pulled down a $2 million bonus.
Sorry, Pal, You're Rich
Can you be middle-class and earn $250,000?
Aug 27, 2008 Updated: 7:42 p.m. ET Aug 27, 2008
As we know from the work of Cornell economist Robert Frank, people rate their well-being not so much based on how much they make and consume, but on how much they make and consume compared to their neighbors.
After all, you have to compete with them for status and for important positional goods such as housing and schools.
And here the CNBC crowd has a point. It is certainly true that in a few ZIP codes and neighborhoods, brandishing a $250,000 salary is like bringing a knife to a gunfight.
There is a significant number of rich people—including a healthy contingent of filthy rich people—in places like New York City and San Francisco.
If you want to live in a neighborhood where starter homes cost $1 million, and you want to send your kids to private schools, and you want to go on great vacations and have a beach house, then $250,000 likely won't cut it.
For people in this situation, the knowledge that they're doing better than 98 percent of their fellow Americans is little solace when the investment banker down the street has just pulled down a $2 million bonus.
