The nation’s affordability crisis has not spared middle-class families, one-third of which struggle to afford basic necessities such as food, housing, and child care.
Across the 160 U.S. metro areas studied, at least 20% of middle-class earners cannot afford to live in that place, after adjusting for local income ranges and price variations.
The share of struggling middle-class families varies by race: 27% of white families, 39% of Black families, 41% of Asian American families, 46% of Native American families, and 50% of Latino or Hispanic families are unable to afford basic necessities.
Policy interventions to support affordability and address racial disparities can be found at both the national and local level.
The United States is home to some of the most expensive cities in the world, and middle-class residents are struggling to afford a decent life for themselves and their families. According to our latest analysis, one-third of the American middle class cannot afford the cost of basic necessities as of 2023.
Using cost-of-living estimates from the Economic Policy Institute and demographic data from the U.S. Census Bureau, this report examines the affordability of 160 U.S. metro areas for middle-class households. Middle-class households are those with incomes within the middle 60% of income earners. Our analysis finds that in each metro area, at least 20% of the middle class cannot afford to live in that place, even after adjusting income ranges to account for local price variations.
This report also examines the state of affordability for middle-class families across racial groups, finding that affordability across the country is often further out of reach for families of color. Even within the middle class, proven historical income disparities by race and ethnicity permeate: The median income for middle-class families overall is $79,000, compared to $70,000 for Black families; $73,000 for Latino or Hispanic families; $75,000 for Native American families; $81,000 for white families; and $81,200 for Asian American families.
Who is in the middle class, and what is affordability?
People may consider themselves “middle class” because of the house they grew up in, the education they attained, or a comparison of themselves to the people around them—concluding that they’re in the middle of the pack. These social indicators are important measures, but for the sake of consistency, most economists rely on income-based definitions of the middle class: typically, the middle 60% of income earners. The argument is that this middle segment of earners should be able to afford to live a comfortable life, to varying degrees.
Our definition of the middle class follows this economic assumption while also adjusting for geographic variation, following the methodology from Brookings’ Future of the Middle Class Initiative. We start with the Tax Policy Center’s income quintiles, which place the national middle class between the annual incomes of $30,000 and $153,000. We then shift these ranges up or down for all metro areas, following previous methodology that considers regional price parity (price differences across place) and average family size.1 This adjustment is based on academic and common knowledge that different cities are more expensive to live in than others, and that a family’s necessary income to be comfortably middle class will also change with the number of people in the household. For example, these adjustments shift middle-class income ranges in Youngstown, Ohio (at the lowest end) to between $24,454 and $124,716, while the income range for Los Angeles (at the highest end) shifts to between $36,561 and $186,459.
Life is considered “affordable” when a household’s income is equal to or greater than the total cost of living. We measure cost of living using the Economic Policy Institute’s Family Budget Calculator—an annually updated, inflation-adjusted estimate of the cost of basic necessities for a household depending on the number of workers and children as well as where they live. The Family Budget Calculator includes estimates for housing, food, transportation, child care, health care, taxes, and a grouping of “other necessities” such as clothes, personal care items, and household supplies. Compiling these cost-of-living estimates with anonymized microdata from the U.S. Census Bureau’s 2023 American Community Survey data, we analyze how much of middle-class incomes are spent on basic necessities across metro areas, disaggregating by race and family size.
This analysis looks at 160 metropolitan areas (cities and their surrounding suburban areas) that are home to at least 100,000 households. For racial variation within metro areas, we only provide estimates for racial groups that compose at least 100 households or more than 0.01% of the metro area population. Due to data limitations, racial and ethnic identities are determined by single-group identification of the household’s primary resident, as indicated on the census.
Affordability for the middle class varies by race
The middle class is diverse. Middle-class shares of race and ethnic groups roughly mirror those of the American population, with slightly higher shares for people of color (Asian, Black, and Latino or Hispanic Americans), and a slightly smaller share for white Americans. As journalist Jim Tankersley writes in “The Riches of This Land,” “the middle class as we understand it now is not limited to one color of collar or to any color of the skin.”
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