Joe the Plumber and the Middle-Class Squeeze

Posted by Kristina Cowan

Joe Wurzelbacher is getting his 15 minutes of fame--raising questions about what it means to be middle class. Better known as Joe the Plumber, he stepped into the limelight earlier this month when he asked Sen. Barack Obama, the Democratic contender for the White House, about his tax plan. According to a New York Times story, Wurzelbacher asked Obama if he believed in the American dream, and voiced concern about having to pay higher taxes as a small-business owner. “I’m getting ready to buy a company that makes $250,000 to $280,000 a year,” he told Obama. “Your new tax plan is going to tax me more, isn’t it?" Obama gave a lengthy response, toward the end saying, “I think that when you spread the wealth around, it’s good for everybody.”

In the time since, the episode has made the rounds on the Internet, TV, in print and perhaps most notably, during the final presidential debate at Hofstra University. Sen. John McCain raised the issue of Joe the Plumber, and both he and Obama went on to explain why their tax plans would be more beneficial for America. According to a New York Times breakdown of the candidates' tax plans, Obama would repeal the Bush tax cuts for households earning more than $250,000, extend middle-class cuts, like the $1,000 child tax credit and the marriage penalty relief, and triple the earned income tax credit for workers earning minimum wage. McCain would make permanent nearly all of Bush's tax cuts, increase $3,500 personal exemption for dependents by $500 a year, until it reaches $7,000 in 2016, and offer the option to pay taxes under a simplified code with only two tax rates.

So what do the plans mean for middle-class workers like Wurzelbacher? Tax analysts in a NYT article said neither Wurzelbacher's personal taxes nor those of his business would be likely to rise under Obama's tax plan. However, a NYT graphic in the same story illustrates that the tax bill of a plumber in a situation similar to Wurzelbacher's would be slightly less under McCain's plan--$20,468--compared to $21,068 under the Obama plan, assuming no retirement contributions.

Defining the Middle Class

Despite campaign rhetoric and political squabbling, Joe the Plumber is raising bigger questions: How do we define middle class? The middle class is obviously squeezed, but why?

There's no standard definition for middle class, according to FactCheck.org, but in opinion polls, a vast majority of Americans say they're "middle class" or "upper-middle class," or "working class;" very few consider themselves "lower class" or "upper class."

“The middle class in America is much wider and deeper than most people suspect,” says Al Lee, PayScale's director of quantitative analysis. “The interesting thing is that a wide range of challenging and respected professions offer middle-class compensation.”

Here are several tables reflecting PayScale data on the pay earned in typical middle-class jobs, as well as jobs where most employees make more than $250,000/year:

Typical Middle-Class Jobs in Battleground States, and What They Pay

Job	State	Average Pay	Top Earners’ Pay
Plumber	Ohio	$47,500.00	$81,700.00
Plumber	Florida	$54,800.00	$111,900.00
Plumber	Colorado	$54,900.00	$94,200.00
Registered Nurse	Ohio	$60,200.00	$78,200.00
Registered Nurse	Florida	$62,800.00	$87,200.00
Registered Nurse	Colorado	$68,900.00	$90,200.00
Certified Public Accountant (CPA)	Ohio	$69,700.00	$122,600.00
Certified Public Accountant	Florida	$76,900.00	$138,200.00
Certified Public Accountant	Colorado	$67,600.00	$134,300.00
Mechanical Engineer	Ohio	$78,800.00	$111,100.00
Mechanical Engineer	Florida	$82,000.00	$110,100.00
Mechanical Engineer	Colorado	$89,400.00	$125,100.00

If you define middle class as those workers making less than $250,000 annually, the following are jobs that some may be surprised to find fall into the middle class bucket, on average.

National Pay Averages of Surprising Middle-Class Jobs

Job	Average Pay	Top Earners’ Pay
Corporate Attorney	$141,000.00	$357,000.00
Pediatrician	$151,000.00	$239,000.00
Vice President, Operations*	$153,000.00	$276,000.00
Chief Financial Officer (CFO)*	$167,000.00	$302,000.00

*at a company with approximately 500 employees

So, who are the people who make up the upper class -- those earning $250,000 or more annually? Here is just a sampling:

National Pay Averages of Jobs Typically Earning Over $250,000/Year

Job	Average Pay	Top Earners’ Pay
Chief Executive Officer (CEO)*	$251,100.00	$576,500.00
Accounting Firm Partner++	$267,600.00	$457,700.00
Cardiologist	$270,500.00	$429,700.00
Surgeon (all types)	$298,600.00	$574,200.00

* at a company with approximately 500 employees
++ at 50 or more partners in firm

The Middle-Class Squeeze

Joe the Plumber seems like the average middle-class American--working to provide for his family and pay the bills, concerned about his future finances and whether they'll improve.

His concerns about the American dream and his finances are reflecting the middle-class squeeze, which is about more than taxes. People are feeling squeezed because the traditional cornerstones of middle-class life are crumbling, says a report by American Human Development: wages in the middle have stagnated or fallen, while those at the top are soaring; job security has disappeared, the real-estate market has tanked, and public education is expensive. It's not excessive consumption by the middle class that's causing the problems, but the increasing costs of necessities (housing, food, energy, health care) coupled with stagnant wages, the report explains.

For example, median household income, which is $48,200, is down about $1,175 since 2000, while mortgage payments are up $1,730, gas bills are up $2,195, and utilities and food are up $330. To get by, more Americans--particularly women--are working, they're working longer hours, and they're accruing massive debt to finance their increasingly expensive existences. Millions are also doing without healthcare, skipping doctor visits and tapping into their retirement plans.

Easing the squeeze won't come easily. The more public debate we have about the issues causing middle-class angst, the better--whether it's in the context of Joe the Plumber, or not.

• Presidential Debates (MSNBC)
• Is there a standard, accepted definition of what constitutes the "middle class"? (FactCheck.org)
• Defining the middle class (CNN)
• Real Deal on ‘Joe the Plumber’ Reveals New Slant (The New York Times)
• Class Matters (The New York Times)
• The Measure of America (American Human Development Report 2008-2009)
• America's Squeezed Middle Class (The Salary Reporter)
• Obama's tax plan (Obama's campaign Web site)
• McCain's tax plan (McCain's campaign Web site)
• Obama's exchange with Joe the Plumber (ABC News footage on YouTube)

Background information on and definitions for terms in the data tables

Table 1 shows typical jobs most people consider middle class, which extremely rarely earn more than $250,000/year. Table 2 includes jobs often thought to be highly paid, but only top earners (about 10 percent) earn more than $250,000/year. Table 3 covers jobs where the typical employee (50 percent or more)  earns more than $250,000/year, though some still earn less. The pay for jobs in tables 2 and 3 does not vary much by location; they are national jobs, so we report national medians.

Average Pay is the median total cash compensation, including salary, bonus, commissions, overtime, etc. It does not include equity (stock) compensation. The median indicates that 50 percent of employees in this job earn less, and 50 percent earn more. Top Earners' Pay refers to the 90th percentile: only 10 percent of employees in this job earn more than this amount, and 90 percent earn less. All pay is for experienced employees, with 15+ years in the field/career. Figures in table 1 are rounded to the nearest $100, and figures in tables 2 and 3 rounded to the nearest $1,000.

Comments

[Rachel S.]

With the middle class being so "big" (based on your article), do you think the title has the same social stigma it used to? I remember thinking it was embarrassing to be middle class when I was growing up. In hindsight, we weren't even quite up to middle class standards, but one certainly wouldn't want to be thought of as LESS than middle class. *gasp*

[Ella Moss]

Thank you for your smart and informative article. I wonder what you would think about my ideas on fixing the economy in my article at http://underzodiacclock.com

[jim mclaughlin]

thank you for the information in the article in referance to the incomes as well as all of the increases in the costs of living. it puts things in better perspective.i feel that the bigger reason for mr oboma wanting to "spread the wealth "is his real want for international socialism, i beleive that he and the rest of his party are attempting to lead this nation as well as the rest of the world to a 1 world government and economy,and they are using the current economic troubles to get what they want.we are headed for a much different way of life and we need to take our country back one way or another.joe the plummer is now being investigated , his personal as well as private life for mearly asking a question . the middle class? you mean the servants of the federal government!

[mahendra singh]

Great article and thoroughly researched. However I find it odd that most Americans seem to desire identification with, politically & culturally, the so-called middle-class whilst financially, they wish to live well beyond its means and even its traditional values.

This curious schizophrenia about the middle-class, where everyone claims membership yet everyone is eager to move beyond it, is one of the many symptoms of the cognitive dissonance which is slowly degrading our political and economic discourse & policy.

It is, in essence, an insidious form of identity politics which neatly masks the agressive materialism and amoral greed of a certain class of Americans.

[QENEHELO M]

I wonder of those people you have listed as the middle class and earning less than $150,000 including the Joe the plumber are all educated people with some type of degree. let's just imagine more who do not come even as close as $50,000-70,000 SOME OF THEM SINGLE where do you put them?????? are THEY supposed to pay taxes ON THAT LITTLE MONEY THEY HAVE. THESE PEOPLE WHO ARE TWISTING GOOD IDEAS INTO SOCIALISTS IDEAS ARE THE ONES WHO HIRES PEOPLE AND PAY THEM MINIMUM WAGES SO THEY CAN KEEP THEIR WEALTH GROWING!!!!!

[blocked drains]

Just Imagine if Joe was a Lib and he received this treatment….. Hell the libs go nuts if the right subjects known terrorists to background checks.

[Plumbing services]

Why is it we have to 'label' people into a 'class'?