Saturday, February 22, 2014

Defining the middle class

The middle class is all the rage these days amongst Canadian politicians, but no party has bothered to define it.  Here are some suggestions for how I think it could be defined.

  1. Divide the population up into income quantiles, i.e. parts of equal size where each person in one part has a lower income than everyone in the next part.  Take the people in some of the middle quantiles to be the middle class.  For example, if five quantiles are used, then they are called quintiles.  We could take second, third, and fourth quintiles to be the middle class, or maybe just the second and third, or maybe just the third and the fourth.
  2. Adopt some measure for average income (mean income or median income, etc.) and some measure of deviation from the average (standard deviation, absolute deviation, etc.).  Pick some number x and say that someone is in the middle class if they are within x times the chosen deviation measure of the chosen type of average. 

    For example, suppose that the chosen average is the median and the chosen deviation is the absolute deviation.  Let M be the median income, and let D be the absolute deviation of income from the median.  Then someone with income I is middle class if the difference between I and M is less than x times D (in math notation, |I-M|
  3. Ask someone "Are you middle class?"  If they say yes, then they are middle class.  If they say no, then they aren't.  (In the interests of academic honestly, I feel compelled to say that this wasn't my idea.  It actually comes to me, indirectly, from MP Scott Andrews, through James McCleod, politics reporter for The Telegram. Here's an image if the tweet disappears).

    Politically, this definition is probably the most useful, because many people consider themselves middle class even when they are not.  This definition is also the most hilarious, in my opinion.
These are only suggestions, of course, and should not be taken too seriously (especially not number 3).  Economists are probably better suited to giving an reasonable definition than some guy who knows math terms and what the word "middle" means.  Regardless, if a politician feels the middle class needs helping, and they have some ideas for helping it, it would be nice if politicians would articulate more precisely just what this middle class is.