Income and Social Class Report

Income and Social Class Report

The term social class is widely used in the United States to classify social status of the people based on the income, prestige, heritage, behavior, culture, power and wealth. However, in today’s American culture, social class is largely linked to income. According to Zumbrun (2016) income is the most powerful aspect that determines the social class of the people. In fact, the Americans use the income to classify households into different social classes. For example, upper class, middle class, and lower level class. This report will discuss all these social income classes as well explore at how income and social class impact consumer behavior. blank

Types of Social Classes

The upper class comprises the top income earners in the economy. However, the findings indicate that there is no agreed definition of whom these people are. The majority of the people think that upper-income class comprises of only one percent. To qualify to be in the group one percent, a household is supposed to have an annual income of at least $389,436 (Economic Policy Institute, 2015) as cited by (Zumbrun, 2016)).  However, Alhanati (2017) disputes this argument by noting that the group that makes up the upper class is large that it is perceived.

The upper middle class comprises of 6.1 percent of the people. These are households earning an income between $100,000 and $150,000. This is according to 2015 census data as cited by (Alhanati, 2017). Research findings further found that the earnings of the people at the upper middle class tend to grow faster than the people at the upper or lower class. The fast growth can be attributed to the fact that upper middle class is just slightly below the upper class and therefore, there are no such big differences between the two classes.blankFrom the above discussion, it has come out clearly that the upper class is extreme wealth. For example, the report has noted that only 1 percent of the people qualifies to be in the upper class. Therefore, the rest 99 percent falls either in the middle class or the lower class. This brings out the reality of the huge economic disparity between the individuals. The studies indicate that middle class includes two categories that are the middle class and the lower middle class. The Census Bureau conducted in 2015 indicate that the middle-class people make up to 41.5 percent. These are people who earn between $35,000 and $100,000. In any good and growing economy, the middle social class forms the largest percentage of the people (Zumbrun, 2016). However, this is not the case as it is only 42 percent of the population that can be identified with the middle class.

Lower level class involves the majority of the households below the poverty line. These are people who do not earn enough to meet individual and family basic needs. This forms approximately 14 percent of the total population. The people in this class earn between $18, 871 and $24,257 (Zumbrun, 2016). The findings have found that majority of the poverty level class live in the high-cost urban areas. This negatively affects their earnings and hence making it difficult for them to shift to the middle class.

Income and Social Class as Predictors of Consumer Behavior

As the report has discussed above, income is the common indicator that is used to determine the social status of the individuals. However, it is important to note that income does not reflect the ideal social class of the households, but rather it reflects that social status (Mood, 2017). Personal income is referred as the individual net earnings from salary, investment dividends and interests and other sources of income. It is the amount of income that an individual earns that will determine his or spending behavior (Myers, 2013). For example, a high-income earner is associated with a costly and expensive lifestyle, unlike the low-income earner. However, whether income and social class can be used to establish household consumption depends on the type of the product.blankFor example, lower priced goods can be used as the predictor of the households’ social class. This because the individuals of the lower class are largely associated with the cheap products compared to the upper-class households. The upper-class individuals purchase the higher priced goods and services in order to maintain their social status. Therefore, in this context income and becomes the determinants of the consumer behavior.

Just like income, social class can also be used as a determinant of the consumption choices among the households. According to Mood (2017), a person social status influences what a household does with the disposable income. This because people tend to classify the consumers into several social classes based on their position in the society. The scrutiny of the consumption choices made by the households helps in placing them in the right social class in the society. In addition, the product that a household intends to purchase may also portray social status symbol.

Despite income and social class being the determinants of the consumer, they cannot give the true and real nature of the households purchasing behaviors. This is because individuals may use their income and social class differently but not as assumed. For example, there are those who gives wealth accumulation and material possessions a priority. For this group of people, income and social class are very important aspects. On the other hand, there are those who value intangible things such as experiences, traveling, friendships, having fun and time with family. This group of households’ income and social class do not matter. Finally, there those people who are extremely poor. For this class of individuals, social class is important, but it may contribute into dis-empowerment hence leading to more poverty.


From the discussion in the report, there are three major social income classes of the households. All these classes are determined by the amount annual income an individual earns. In any developed economy the majority of the households falls at the middle class. This is the class that can meet all its basic needs. On the other, hand the upper-class forms very small percentage of the population. The percentage of the lower class is lower than that of the middle class. Finally, the report has found that both income and social class are determinants of the consumer behavior.

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