The majority of top earners inAustralia consider themselves to be middle or lower class, despite having a household income of $200,000 or more, according to a report released this week.
Middle class has seemingly become an umbrella term to describe almost everyone in Australia, except for those at the very top and bottom of the scale, according to the research conducted by Ipsos Australia for MLC Wealth.
The Australia Today report by Ipsos Australia for MLC Wealth assessed the lifestyle, financial security and retirement plans of 2000 Australians and found a consumerist culture is dominating more than ever before.
Two thirds of high-income households surveyed in the report consider themselves to be “middle class”, “lower middle class” or even “working class”.
For many of those surveyed, middle class is considered to equate to a salary of at least $100,000 or more. The label also potentially applies to white-collar workers, those who have an investment property or the house paid off, and those living in a major metropolitan area.
Many defined middle class as being able to send their children to private school and pay for their extracurricular activities.
Nearly half of all survey participants agreed an annual household income of at least $150,000 is needed to live comfortably in Australia.
Three in five people believe that having $1 million in wealth does not qualify as ‘rich’ in Australia, particularly for those living in Sydney and Melbourne or those with a household income of more than $200,000.
MLC general manager of corporate superannuation Lara Bourguignon told Fairfax the report shows a paradox, with the people earning more also spending more and feeling left behind.
“It might be because they are living in the major cities, living in the expensive areas of major cities or working so hard that conveniences such as eating out seem essential,” she said.
The report also highlighted a generational gap, with 40% of younger people considering eating out once a week more important than their parents’ generation.
Most high-income earners believe income of $454,000 makes an upper class household, while middle earners believe $280,000 is enough to be counted as upper class.
However, low-income households that participated in the study believe $549,000 is enough to be considered upper class.
According to Ipsos Research Director Laura Demasi, “the way Australia’s middle class lives today is like the previous upper-middle of a generation ago.”
“People have rolled lifestyle factors into what they now call ‘standard of living’ and are confusing the cost of living with the cost of quite an affluent lifestyle…actually these factors are not standards of living, they are over and above those factors,” she said in a statement.