$ 250,000 per year sure is rich by US standards

It appears that someone (who I am sure has family income under $250,000 per year and is just interested in social science) contests my view that families with income over $250,000 per year are rich. He or she notes that two earner families can be rich by working real hard and that price levels are high in some parts of the country, so $250,000 doesn’t buy as much as it buys in other parts of the country.

One can look at two earner families only. $250,000 will be huge compared to the income of most two earner families. The vast majority of two earner families have incomes under $250,000 / year. This remains true of a very large majority after making an absurdly generous correction for local price levels.

Calculations after the jump.

Let’s see. In 2006 44.9 % of married couple families had two earners

The Wikipedia claims that, according to the US census bureau, in 2004 51.35% of households were married couple families.

According to the same source, 1.5% of households have income over $250,000. If they are all two earner married couple families, then roughly 6% of households are two earner married couple families with incomes over $250,000 per year.

Non family households typically contain two or more families and, in fact, there are more families than households. I won’t bother to look it up, but 6% is being very generous to those who claim that families with incomes over $250,000 per year are not all that rich by US standards.

According to this study (the first I found) the highest bicoastal local price indices are about 1.3 times the national average.

The highest price index was for Honalulu, which I will ignore as it is not on the West or East coasts.

2.67% of households had income over 200,000 in 2005. 250/1.3
Being insanely generous and assuming that all households with income over 250,000 live in the very costliest areas, and that they are all two earner married couple families, and that there are no more families than households, I get to a two earner married couple family with income of $ 250,000 is only richer than 86% of two earner married couple families given the correction for the local price level.

This is very very far from the average Joe married to the average Jane and both working.

There is no way that any numerate person who is willing to google for 10 minutes can believe that a family with income over 250,000 per year is not rich by US standards. All of the corrections are already considered when getting from an income most people consider rich up to $250,000 per year.