I am not sure if looking at income by population percentile is a good way to look at class. Population percentiles are a population phenomenon, but class is a wealth phenomenon. If you want to examine the population look at the horizontal axis, but if you want to examine wealth you need to look at the vertical axis. Most people pay attention to the horizontal axis, but most wealth pays attention to the vertical. Are you trying to learn about the lifestyle of the median person, or the person who owns the median dollar? They are very different people.
My observation is that the NCAA college basketball tournament is an excellent model of our economic system. It perfectly integrates the effects of luck and skill into a winner-takes-all single elimination tournament in a fashion which is very similar to reality. Is the 37th best team out of 64 teams considered a middling team in March Madness? No, they are losers who went out in the first round. A middling team made the sweet sixteen. In the tournament, those teams losing the first round (50%) are lower class, those losing the next day (50-75%) are lower-middle class, those losing in the sweet sixteen (75-88%) are middle class, those losing the elite eight (88-94%) are upper-middle class, and only the final four are upper class. The tournament is judged on the vertical scale of how far into it a team advanced. Our economic system is even more extreme than that.
It is more like the Pareto Distribution, which was invented to approximate human economic behaviour. In the Pareto Distribution the wealthiest 20% own 80% of wealth. The wealthiest 20% of those 20% own 80% of that 80% (wealthiest 4% owns 64% of wealth). And so on. The wealthiest 0.001% own 20% of wealth according to Pareto. Is measuring the population by quintiles really the best way to examine this system? Our income distribution isn’t quite as extreme as Pareto, probably because of redistributive government policies.
I think class in the economic system we have is better examined by a 10-round NCAA tournament model. The losers of the first two rounds are lower class, the next two rounds are lower-middle, the winners of the top two rounds are upper class, etc. It looks like this.
Radagast Wealth-Based (10-Round Tournament) Model of Classlower | low-mid | middle | up-mid | upper |Class
10% 20% |30% 40% |50% 60% |70% 80% |90% 100% |wealth decile
50% 25% |13% 6.3% |3.1% 1.6% |0.8% 0.4% |0.2% 0.00% |top of population percentile
In this model the bottom 75% of all people are lower class, while upper class starts at the top 0.4%.
By contrast, here is what population-based data looks like and it is a lot less extreme.
10% 20% 30% 40% 50% 60% 70% 80% 90% population decile
$15,640 $28,002 $40,501 $54,945 $70,181 $89,673 $113,191 $149,212 $212,110 income
It makes no sense for a person who is richer than 97% of all people to claim to be middle class in a population-based model. But in a wealth-based model it makes perfect sense: half of all money is owned by wealthier people, and half of all money is owned by poorer people.
It sort of makes sense for my household too. As an engineer and a nurse we are clearly an upper-income income household. But by occupation we design sewers and wipe poo, which are hardly upper class activities. Which makes sense in this context because by wealth we are lower-middle class. Upper class is someone who owns a company of 200 such individuals. I can easily imagine the lifestyle of the lower class because they are in line in front of me in the grocery store, and likewise they can imagine me because they see me. In fact most of my friends and coworkers are lower class by assets, and the main reason I advanced to the lower-middle class is because I found this website and forum. I cannot imagine the lifestyle of the upper class because I have never encountered them.
So my answer is that class is a wealth phenomenon determined by dividing the population according to quintiles of wealth. Those who own the bottom quintile of wealth are lower class, the middle class owns the middle quintile, and the upper class owns the top quintile. I think this is numerically consistent from a historical standpoint where upper class was a local lord and his immediate family, a dozen people among many thousand. Upper middle were merchants and millers, middle was smiths and other occupations that ended up as last names, lower middle were leaders of small groups, and most people were just bodies in the lower classes.