Today, I stumbled across that attempts to place you in one of five socioeconomic groups (upper fifth, upper middle class, middle class, lower middle class, bottom fifth) based on a number of factors (occupation, education, income, and wealth). I’m quite happy to share my results with you:
Occupation My primary occupation and side businesses all place me in the upper middle class range.
Education I received a bachelor’s degree, which puts me in the “top fifth.”
Income I used our whole household income estimate for 2007, which includes my primary employment, my wife’s primary employment, and income from my side businesses and investments. This puts us just in the “top fifth.”
Wealth Because we’re just now digging out of some stupid financial decisions, we are decidedly in the middle class range for wealth.
Average Overall, this tool identifies my family as being “upper middle class,” even though our wealth is decidedly “middle class” at this point. I would conclude that our other socioeconomic factors (our job, our education, and our income) all indicate that our wealth should move into the upper middle class range as our life goes on and perhaps even into the “top fifth” range and thus the tool has a bit of an age bias (it’s hard for young people to have accumulated the wealth that is identified as “top fifth” unless your last name is Rockefeller or something).
What else can we learn from this tool?
Education is a major key to upward mobility Assuming that education plays a significant role in class mobility as indicated in this article, the best way you can position yourself to move up in class is by working hard and getting an education. Completing a bachelor’s degree puts you in the top fifth in education simply because only 9% of Americans actually manage to acquire one. So, get an education.
Jobs that require you to use your mind generally have more prestige than manual labor jobs This isn’t surprising, but intellectually challenging jobs populate the upper third of the job prestige list, while physical labor jobs populate the bottom (craftspeople are somewhere in the middle). If you feel you only have the skills for physical labor, one potential way to move up is to look at a trade that mixes physical labor with basic problem solving, like carpentry, plumbing, electrical work, and so on. If you’ve got such a job and are looking to move up, it will likely require getting more education. In short, always work to improve yourself by learning new skills.
There is some age bias here As I mentioned above, younger people are inherently hamstrung by the wealth column, as most of us twenty and thirtysomethings are dealing with a very large debt load and not that many years in the workplace building up our wealth. In other words, the longer you’ve been earning money and not spending more than you earn, the more likely you are to be moving up in class due to the net worth bias.
This tool lays out exactly how to get ahead in America: get an education, constantly look for ways to improve yourself and aim upwards, and spend less than you make. If you do those three, you will move up through the classes. The people that fail to do these things are downwardly mobile.