I wanted to tackle explaining the differences between socioeconomic classes in North America. For the most part I believe the same factors will apply for Canada and the US. I will try my best to outline in a series of posts the main differences between lower class, middle class, and upper class. It’s important to note that this is subjective, and I will not be defining each class by income or net worth as you might find in other posts. While I believe income and net worth is important, its extremely difficult to draw a hard line using a persons income and apply it across the entire country. For instance, a person making $35,000 annually may be able to live a comfortable life in Montana, but the same person would be in dire straights living in California. If you’re like the majority of people here in North America it’s likely that you experienced growing up and spending most of your life in middle class. While I would argue that socioeconomic classes are subjective and have many factors that contribute to them, there are a few key variables that vary between the three classes which I will outline for you in this post.
A few of these indicators that I will unpack for you include: investments, travel and leisure, real estate, vehicles, food, and education. This list is by no means exhaustive but will certainly highlight the differences between the different classes.
Travel and Leisure: Lower-class families are typically not able to travel throughout the year. The focus remains on providing the basic needs and there is very little left over for travel/leisure. An exception could be sending the children to an inexpensive summer camp, or participate in a local sports activity such as community soccer, baseball, etc. all of which are fairly inexpensive. Otherwise travel is largely out of reach for this level.
Investments: Lower class families may not be living at or below the poverty line for their respective city’s, but they are not able to invest much if anything towards retirement. Wealth may seem out of reach and it may be difficult to save from one month to the next in an effort to accumulate any type of savings towards the future. The focus each day is to provide enough to cover the basic needs. Investing any type of money towards the future may come in waves depending on bonuses, raises, etc. And unforeseen expenses pose a “rob Peter to pay Paul” scenario that forces them to choose paying for the unforeseen expense over the other putting them further behind. Emergency savings are non existent and thus a small emergency can put the entire family in a precarious situation.
Real Estate: Most lower class families will rent a property that is suitable for their families needs, or they may purchase an inexpensive modest home in a low cost part of town. There are no secondary properties in their family, and there is a chance that they may rent a property throughout their entire lifetime, never owning real estate.
Vehicles: Lower class families may have one family vehicle to provide transportation for both parents and children. In many cases some families may not have a family vehicle at all and rely on public transportation instead or borrow a vehicle from family or friends to do important errands. The cost of owning, insuring, and maintaining a vehicle is too great and interferes with other basic necessities.
Food: Food plays a central role in lower class families. Food is one way where families can get creative and stretch a dollar in order to provide for celebrations, family gatherings, social events, and generally able to meet this basic necessity. There will be times where food is scarce, and there is “more month at the end of the money” but lower class families will find ways to make food ends meet. Food will become a goal in and of itself and a full fridge or pantry will likely signal a payday. Lower class families will also plan special events (birthdays, anniversaries, etc) around restaurants where they can visit and enjoy once every few months. Inexpensive fast food tends to be a treat for a job well done or night out.
Education: In lower class families, there is an urgency to get out into the world and provide for oneself and their needs. Survival is the central focus living day-to-day and therefore education becomes secondary to survival. In this case completion of high school is likely but in severe poverty cases dropping out of school in order to work is a reality. Post secondary education may be a goal but could be out of reach unless scholarships at a community college or local university are in play.
Feel free to leave a comment or contact me if you have anything you would like to share!
