$150,000 per annum according to the article below. Not sure if it is referring to combined household income or salary per person.
https://www.news.com.au/finance/money/wealth/middle-class-au…
Salary to Be Considered Middle Class
mrvaluepack on 24/10/2023 - 12:07
Comments
Yep. People earn more and they bake in a corresponding increase in their spending.
A load of boll ox article. The traditional working-class no longer exists in Australia and many other Western countries. The old, skilled working-class are now middle-class and the unskilled working-class are now, essentially, an under-class. The middle-class is now bigger than it ever was - as is the most wealthy class.
The author of this article knows stuff all about economics and society.
I wish they opened comments on all their articles, every single one of their journalists would be torn to shreds in a heartbeat.
The couple of times i've commented on the sensationalistic sub par journalism that was in some cases plain false ended up being redacted.Most of the stuff that they publish on economics and finance is pure, sensationalist garbage. They try and come across as serious but they say naff all.
If house prices stayed sane then I think millions more people would be considered "middle class" today. It almost feel like the housing bubble was created on purpose, to keep more people relatively poor. The trillions of extra wealth created each year by the housing bubble on existing properties didn't just appear out of thin air, it comes from regular workers buying and renting homes. Without the bubble those workers would still buy and rent the same homes, but they would have more money leftover. If they only own one home and want to own just one home until they die, then it doesn't matter to them if the average house price is 200k or 1.2 million. When they sell their home and buy another they are still in the same position.
Exactly. It’s a bloody ponzi scheme of property price inflation and it’s out of control.
Need politicians who think beyond the next election and popularity to fix it.
Only winners are the banks and developers that lend out more money and in return garner bigger profits.
Jesus christ people here have absolutely no clue what they're talking about.
Try using some actual statistics/reports on this that isn't garbage news articles, e.g. below which suggests that middle class is between $35,000 to $95,000 household income for a 1-person household. Yes, just because you and your mates can't afford million dollar houses/latest cars doesn't mean you guys are lower-class, there's many people not earning a lot and struggling.
https://www.oecd.org/social/under-pressure-the-squeezed-midd…While this is less official/a news article, it does provide more context and is significantly better than the news.com.au trash
https://www.afr.com/politics/how-wealthy-are-you-compared-to…I realize a lot of this is from 2019 not directly current, but someone who was considered in the top class of earners then with $150k is not suddenly "scraping by" to just pay rent/bills/groceries etc. now.
People here are either trolling or have absolutely no idea how privileged they are.
But Dingo, my door dash Thai has gone up to now be $30 delivered just for me! These are essentials.
Good thing I hate Thai food
their definition of middle class is
Middle-income class refers to households with income between 75% and 200% of the median national income
OECD had median-income of $47,601 in 2019 and upper limit of middle class is around 95k/year
Latest data from ABS has median employee salary as $1,250 per week, which works out to $65k per year (also in the AFR article linked above). Based on this, the upper limit of middle class according to the above definition is $130k/year. This is the upper limit (meaning it is 2x the median income) and still 20k below the news.com article so very unlikely someone with $150k/year is scraping by.
The above median has both full time and part time, so if we only look at full time, the median is $78,800/year which would would make the upper limit $157,600. Maybe this is what they are using to justify $150k/year as median income.
As others have said, income is not the only metric to determine wealth.
It's kind of a fallacy to use the median rate though. The term "middle class" usually means something along the lines of people who aren't desperate and struggling to meet payments for the essentials and has some luxuries, but are far from being wealthy to afford decadent lifestyle.
You can have a downturn in economy, where the prices of everything go up quickly, dissolving the middle-class. So if you go off the median rate, then you get figures that aren't realistic to the conditions. Just see Turkey, Argentina, etc etc.
I don't disagree with you regarding the terms and using median, they can both be debated. Despite the issues, it is the most commonly used equation to calculate middle class.
Regardless, I don't think it takes away what Dingo is saying. We are talking about the top limit here and people bordering the upper class so even if prices go up, I don't think these people would suddenly be in the lower class. Also 150k/year is way above this upper limit. They are most likely in the 10% of earners in Australia and unless they are living a decadent lifestyle way above their means, they shouldn't really be struggling.
Yeah reading some of the responses here suggesting as if $150k is a paltry sum is insane.
$150k salary means you're in the 92nd percentile.. you're earning more than 92% of earners in Australia, and to suggest that earning that much is just scraping by is insane cause that would mean that 92% are basically in poverty, which is simply not true.
What does matter though is whether you provide to a single income family or whether there is another earner as well.
a second income to start with!!
150k for an individual is a 'good wage'
150k for a couple is comfortable
150k for a family is very much middle class if anything you're probably struggling if you over leverage when interest rates where low like a lot of young Australians are…..
This 100%.
Wait till you hear about the marginal tax rate of 37% + 2% Medicare levy. Why we pay Medicare levy even though healthcare is no longer universally free is the question though.
Paying medicare levy, for the first time in 39 years I cannot access a doctor for free which in the past has been instrumental in helping me stay healthy. Calling absolute BS on this country, whilst they relieve me of $500 tax a week and set me up with 4 cameras on my 10 minute drive to work.
I
HATE
AUSTRALIA!
As others have said, a few news.com articles are just simply copy paste with no real reporting or facts in it.
This reporter, a royal specialist reporter, a sports reporter who writes articles by watching sports on tv.
You get what you pay for I guess, there’s a reason the headlines are very dramatic and the half the page are filled with ads…
Sorry to hear you get your news from news.com.au.
Contrary to the name of the website, it's anything but.
Judge a book by its contents not by its cover.
Have you even read the article? It does have some valid points.
The median in Australia for those working 37hr's a week is currently is a bit more than $78K
Until recently the most I got is close to $50k per year working full time in retail jobs. There is no way I can earn $78k in retail
It's about income and assets and age bracket, as others have said, but also locale.
Looking at the comments, city slickers are talking millions in assets and $100k plus salaries.
Even the average salary is under $100k, and the median (a truer measure of normality) is way below.I consider myself middle class, with an income well below the median and assets well below the millions - simply because I don't live in a capital city in Australia.
Many of the wonderful middle class people in those fine cities are now slaving away at work, to pay off mortgages on houses and raise children.
The reality is your choice of location and whether to have children are options.
My middle class existence has me writing this from my balcony with a sea view as an unemployed bum with a small mortgage and no children contemplating when to jump into the pool for the first time today.Your class depends more on your life and lifestyle choices than on income or assets IMHO.
Of course, I may be wrong. I might be a lower class bum. But a bum who doesn't need to work, pay a mortgage, or constantly complain about the (self induced) cost and struggles of raising children the world simply doesn't need.
Why don't you need to work? What's your income source?
Good question. The guy you replied to is only telling a tiny bit of his reality
Even the average salary is under $100k, and the median (a truer measure of normality) is way below.
The median salary in Australia for those working 37hr's a week is currently a bit more than $78K (https://www.abs.gov.au/statistics/labour/earnings-and-workin…).
or constantly complain about the (self induced) cost and struggles of raising children the world simply doesn't need.
Australia needs a birth rate of 2.1 to maintain a functioning tax base and work force. We are currently well under that at only 1.5. We'll need to increase that 2.1 much higher as well to have a functioning work force and tax base to cover the welfare needs of the current 20yr old - 35yr old working class, once they hit retirement age.
The article is 100% correct, I'm on 250+k salary and if I had to rely on it alone, I wouldn't feel rich either.
My cryptocurrency portfolio is making me feel rich. For those who don't know I have been in cryptocurrencies since 2013 and I created an AMA thread to answer various questions and to debunk various myths about it.
I can relate to this. TC is over $300k and it feels just enough to maybe scrape together a place to live and a good shot at a family. How people are on $60k doing demanding work and not rioting in the streets blows my mind.
Yea, I can't imagine trying to survive on $60k even with all the tax breaks and support.
People negging are jealous lol.
No, they're just not morons lol. And they know you're a desperate shill.
If you're on 250k+ and struggling you are terrible with money.
You are heavily invested in crypto though, so this all checks out. Maybe if you didn't you'd actually have money? 😂
I wholeheartedly agree. Also in that salary range, and relying on that alone would make me anxious! Especially with a young family. For starters the PAYG tax deduction is already ludicrous - like being penalized for achieving more. Have to reply no negative gearing real estate investments, to manage it.
Need a combination of diversified investments in at least shares, crypto, real estate to secure the future. It's really like being the middle class poor. Yes there is a small amount of the population who are on sub-100k salaries, but there are also a lot of self employed people under-declaring their cash income, funneling all their expenses through their business, whilst only paying themselves minimum wage. Realistically their received value is well over that of any PAYG salaried employee on 200k+. Unfortunately their tax return shows them only being paid $40K which skews their true overall position.
Yes there is a small amount of the population who are on sub-100k salaries
Small amount of the population? The median salary for full time workers is about $78k.
OK - you are self employed. Funnel your cars, groceries, clothing, computers, phone and whatever else you like through your business as deductions. On top of that you handle a lot of cash payments which the ATO never sees. Then pay your partner $36k/year so it's not too suspicious. In that scenario they're not actually just making $36K a year as a full time worker. The true value is much much more, depending how creative they get with cooking the books. I doubt anyone who is self employed is actually 100% honest with their deductions. Just look at the number of tradies in their $150K+ modified utes on beaches on the weekend. You think they are paying FBT?
Did anyone actually read the article?
To be middle class in 2023, Mr Jamieson argues the minimum would be “$150,000” to reach the early 2000s aspirations.
I'd say that is a fair argument. Median house price in Sydney was $518k in 2005. Its $1.3mil now.
$150k today is about $95k in 2005 accounting for inflation.
I find it amusing that overseas whilst homes are being blown up by missiles, people being kidnapped, held hostage or killed whilst armies are lining to occupy territory, people in Australia think they are struggling
First world problems, we are definitely very lucky in the big scheme of things.
The Israel-Palestine conflict has been going on for centuries with no solution in sight. Its quite dishartening that we (as in the West, US, UK, Australia etc) with all our wealth and power, don't push for an amicable solution and yet let violence continue, its really sickening.
Israel will never destroy Hamas, because Hamas is a created by Israel's invasion and continued occupation of Palestinian territories and the numerous atrocities and war crimes Israel has committed and continue to commit on the Palestinian people. No Israeli bomb, missile or tank can destroy Hams, Israel will be just as successful as us in destroying the Taliban.
The solution to stopping the cycle of violence is actually quite simple, the two state solution. Go back to 1967 borders (that's a huge concession to Israel, why not go back to 1947 UN resolution 181 borders?) and lift all blockades on Palestinian land and territories.
Until there's a two state solution, the cycle of violence will continue. The alternative is for Israel to commit genocide (which they are trying to do at the moment), and disappear 2 mil people in Gaza and around 3-4 mil people in the West Bank.
Due to the power imbalance, I place more blame on Israel than the Palestinian people. Israel has the power to end the cycle of violence and they are committing more atrocities and war crimes than Hamas. Yes, Oct 7th was an atrocity and it should be condemned, but it did not happen in a vacuum, it was a direct response to Israeli war crimes. Israel has committed multiple levels above Oct 7th on the Palestinian peopel over the last 75 years and the world has turned a blind eye to it.
Wasn't trying to divert the topic. Was trying to highlight that we are all relatively rich in Australia because things aren't being blown apart by our neighbours on a regular basis, we have a healthcare and welfare system and some reasonable stability.
Perspective means a lot when looking at a global landscape and in truth, an arbitrary line on mid-tier wealth is really meaningless in the grand scheme of things. I would describe the original article as meaningless trash and mental vomit intended to insert victim ideology into the minds of the general populace unfortunate enough to have read it.
Yeah its quite a contrast isnt it.
But I think it's not really a fair comparison, first world - first world problems, third world - third world problems, you can't really compare them. But certainly, from a global landscape, I agree that it highlights that we have it pretty good in Australia.
Lmao.
Who knew the solution to a conflict which have lasted over a century could be "quite simple".. and found on OzBargain no less. Would've thought it would be resolved by now if its so simple huh.
get over yourself lol
Thankfully we don't live in a crime ridden hole with raw sewage floating down the streets like San Francisco.
I read this article and thought it was actually pretty spot on! Mary is well known for writing clickbait trash, but this one I thought wasn't far off it.
150k + is not amazing if you're a sole provider for a family. My wife does not work as our son is high-functioning autistic. So yeah, we do okay but we are far from 'rich'. Middle class yes. But as a single income family, a good income sure, we are not free of life's burdens. If my wife worked, we would have a stronger asset base. Such is life.
Anybody more than bottom-rung working class, but less than a few $mil in assets, is middle class - lower middle, middle, or upper middle class.
Upper class are the people who's kids never need to work if they so choose.
The elite are the people that control all the money and wealth.
People on $80k calling people on $200k "rich" is very silly.
People on $80k calling people on $200k "rich" is very silly.
Yep, especially when the primary reason for the salary gap between $80K and $200K is that those at $200K are there because they are typically decades older than those just starting out & as such have the skills and experience to be in senior roles that most in an $80K job have yet to earn or work hard enough to obtain yet.
I earn 300k but personally I am firmly lower class, me and my 2 houses are not rich at all
That's exactly right. Rich are those with assets and the security for their children, grandchildren, great grandchildren to never work a day in their lives, live a lavish life without needing to worry about money or bills like the rest of us plebs.
Living with my partner with $90k in Sydney, no stress - living a dream!
It's always about housing in Australia.
Middle class is anyone who owns a house (or is paying off a mortgage on a house). Lower class are people who cannot afford to get a mortgage. Upper class are people are who own multiple properties. Upper class people have large passive incomes, vs the middle class who need to work full time for a wage. All of those properties, appreciating by $100,000 a year without a person having to do anything. Passive income should be taxed at 90%.
"In the early 2000s, living a middle-class life meant owning a home, being able to afford some kind of yearly holiday and springing for takeaway for the family every Friday night." The author of the article's first paragraph is 100% correct.
Passive income at 90% you reckon? I wouldn't work hard to earn more money to cop that
Once you get to 180k - 200k bracket, it's no longer tax effective to have stable, passive income producing assets under your name.
Your investment company will not be taxed at 90% ;)
I'm well above 150k around the 160-190k range.
I don't want to say I'm rich, cause I don't feel rich. I'm just comfortable (but that's gonna change when my rent goes up next year)
I am not complaining but I will let you guys know, it's been a struggle to get a home, and that's with some level of compromise.
You would think being in the top 10% of earners would mean you won't have to compromise much, but my options are the same as anyone on 120-150k a year, I just save a little more which is great. But when you think about it, it still won't get me anywhere near what my Dad affords in 2005 on his 75k salary. Parents have about 3 million on assets, where as I am on more than double and I can't even afford to buy a 800k+ asset.. I'm looking at repayments of well over 35% (which now days is nothing remotely close to what my dad's options). And as a person who wants a family having to delay and get older is a prospect I now have to accept bitterly.
I'm still grateful I am in an industry where skills are in high demand and that I have the ability to do the job.
But I feel like I'm on a mindless treadmill running for years only to find out there is no light at the end of the tunnel and I might as well just stop running and accept my fate that there is no hope for us young people to even get anything remotely close to what our parents had.
Plugged in these numbers into CommBank's borrowing calculator.
170k income, 4k bills & living expense (avg is 2.5k nationwide for single person), 0 loan, 0 credit card.
You'd have a borrowing power of $695k at 80% LVR, so a maximum buying power of $868k at 6.54%. Your repayments would be $4412/month leaving you with $5468/month for bills/food/everything else.
Of course this assumes a lot, single, no dependents, no liabilities, and that you'd have $173k deposit + few more thousands for settling fee.
Curious if your issue is the deposit? Cause you should be able to service a mortgage pretty easily.
Calculator and what the broker tells you are two different things. I spoke to my broker about it too and essentially it came down to either they can do this right (I prefer this cause if I lose my job next year due to a definite impending recession, I still can hold it) or I can go to a broker who cooks the books (a camp of people who have done this and now having to force to sell at a significant loss).
Also, mind you paying close to 50% of your salary should ring alarm bells. If it doesn't that's the problem, we have simply accepted that paying 50% of your salary for the next 30 years is good?
Instead why don't we all young people realise it isn't normal.
Anyways rant over. To your point, even at a purchase power of 864k what can you get that isn't a complete compromise. In terms of my deposit I do have one that's slightly higher than what you have calculated. And ye your assumptions are quite good. Except my living expenses are cut to the max. So under 2kk excluding rent. With rent is goes up a fair bit.. 🥹
When everything even an hour away is over 1m 😭
Haha. That's my point. In saying this I completely will say I'm grateful cause at least I can afford some property albeit it isn't the property that is designed for a young family.
Calculator doesn't take into account some minutiae but it gives the you a pretty good ball park. Difference between doing it right vs cooking the book is literally just how honest you are with reporting your income and expenses, you'd be silly to cook the book and end up over leveraging yourself.
Mortgage stress is repayment divided by gross income, not net income, and the example above would be 31% which is just slightly over the threshold of whats considered mortgage stress (30% is the threshold). In your case though.. its really not that bad if you've got no dependents, and this is you maxing out your borrowing capacity.
You don't have to be paying it for 30 years, you can pay more towards it to pay it off early, you'll end up paying much less interest that way too.
I always see younger people complain that it's harder now than it was 30 years ago, parents used to be able to afford a mansion while working part time kick rocks.. etc.. fact is, that's not the world you live in anymore, things are different now and theres no point in making that comparison cause it wont get you anywhere. Just like how 'realising it isnt normal' isn't gonna change anything.. and even then, whose to say thats not the norm now.
I'm in my late 20s too and yeah its hard as shit but sitting here feeling sorry for myself isnt gonna help my situation. I've got quite a few people in my extended friend group whose purchased properties in the last 2-3 years, myself included and we all make significantly less than 170k.
Point is, it's doable, especially at your salary and savings. Btw hope it doesn't come off abbrasive, not trying to be.
I call bs on this. I easily saved and purchased my first house on a combined salary of 170k. Only a couple years ago.
You can still get a livable house for less than 800k btw…
My point still stands. Top 10% yet you are getting the bottom 40% of property.
Either way as I said if you read it. I do have the deposit. Just losing to every dink unfortunately..
Salary is one thing but also its about your savings.
If you are in your 30s, you've had at least 10 years of working. Where are your savings? What have you got to show for all that time?
If you are able to be lent $850k, you can supplement that with a $500k down payment/deposit to buy in a nicer area.
Struggles to survive.
No smoking no drinking at all
No medications or complications$130,000 a year and find myself hard to buy decent food
How??? What percentage of your salary is going to rent? Any loans? 130,000 a year is plenty (saying with experience of right now)
I own my car outright
Have two houses. One is fixed rate 3.2%, $350,000 left
The other one, variable 5.7%, $360,000 left, receiving $550/wk, $360,000 left.
Yeah.
I don’t feel safe to spend any money, I have $80 budget to spend on fuel and $80 for all food, never dare to spend a single dollar outside supermarket.No other debts at all
Have two houses.
@buckethat: 🤔….i don’t have any houses in major city like Sydney or Melbourne, just remote places in perth
Your interest payments are $32k per year. If you're paying P&I, that might work out to be about $45k per year. Offset that by about $22k rental income after taking out costs for the investment property. You're left with net $23k mortgage payments.
More than doable on $130k income. Although, your mortgage payments will jump up when the fixed rate expires.
I make a decent amount less than $150,000 and I can say, unless you've overextended yourself on mortgage or car loans, you're living a very very easy life.
Look, $150k is considered as pleb on OzBargain. Average income here is $400k+, come on man!
Ozbargainer: yeah I'm in my mid 20s own three houses and earn 300k a year and I'm lower middle class
this so true lol the number of times I've seen people in their mid-late 20s having 300k+ salary and $250k savings is way too often haha
It depends on circumstances, priorities and perspectives. I'm single for household purposes and am paying off the house I bought a year ago while on $75k ($60k when I saved most of the deposit). Outer suburbs of Melbourne. I did use some of the first home buyer schemes to do it. I don't think I'd be middle class, but am comfortable.
by Marie Madigen
Take everything this journalist says with a grain of salt.
You need some one who has read Marx with an open mind in this debate.
He talks a lot about class and the means of production which are strongly linked.I personally haven't read Marx and certainly couldn't bring it into a modern context, but he did create the framework in which these things can be discussed.
How can you advocate for something, then explain that you're ignorant about what you advocate?
I guess the the explanation here is that this is an opinion you hold not through personal experience, but through word of mouth… presumably the word of someone you respect and trust.
Marx casts a huge shadow over 20th century thought so while I haven't read him directly I am aware of some of his ideas.
This guy in particular
https://www.theguardian.com/news/2015/feb/18/yanis-varoufaki…
AHAHAHAHA
If you have a couple of kids and don't already have a bunch of wealth built up really you need a household income of $450-500k to be considered middle class IMO. $450k if fairly evenly split between the 2 adults (both are in top tax bracket), $500k if one is making most of it (therefore paying higher total tax, a strange anomaly in the Australian tax system compared to other countries).
That would give you about 24k a month after tax.
$7k minimum mortgage repayment on a house that is middle class level.
$1.5k extra repayment to not be paying off for rest of life, or savings depending on how you want to look at it.
$1.5k other costs relating to house (rates, insurance, maintenance, depreciation or monthly cost of 15 year renovation depending on how you want to look at it).
$7k school costs (yes private school, being able to send kids to private school is definition of middle class IMO).
$1k health insurance and other health costs
$1k groceries
$1k bills, subscriptions, etc
$1.5k monthly cost of yearly holiday
$0.5k entertainment / eating out
$1.5k transport (cost of owning 2 cars - insurance, rego, maintenance, depreciation, petrol)
$0.5k miscellaneousObviously if you have a bunch of wealth already then it's less given don't need to have as high a mortgage payment for example.
To elaborate on the 7k/mo mortgage repayment, 1.1m loan + 50k LMI capitalised is about that much repayment, to buy a ~1.2m house with 100k deposit. $1.2m is really nothing special these days in a major city, in fact you'd probably be embarrassed by it when you're bringing in 500k/yr and it's not even really "middle class level". This is assuming you have the $100k deposit and $60k stamp duty upfront.
lol. You're delusional. $500k to be considered middle class.
Plus you think a couple earning $500k is gonna need LMI to buy a house?You'd be surprised the amount of people making that much and more that struggle to save money, I work with a number of people bringing that in and more and many aren't saving much. Point was a scenario where there isn't much wealth built up already, but anyway even if you assume they had a 20% deposit it's still only like a 1.4m house, nothing crazy these days just a renovated stand alone family house in a slightly below average suburb.
Where are my numbers wrong if I'm delusional? This is the cost of a middle class life with a family in Australia if you haven't been in the housing market for 6+ years or gotten a stack of money from your parents.
Depends.
You could be a couple earning $80K per annum each and have a $100,000 mortgage and be far better off, than the $300,000 couple, with a million dollar mortgage and credit card debt coming out of every orifice.
If I had a dollar for every time I've met a "power couple" driving two German cars, and going on luxury holidays, but really living paycheck to paycheck, I'd be a millionaire