Across various publications, experts and reports, a recurring critical theme is the state of the middle class in America and its struggles in an increasingly expensive and transforming society. Indeed, in much of the country, the middle class is facing a bleak financial future. Fortunately, that isn’t the whole story. There are some cities where the middle class is thriving.
In order to find out where, GOBankingRates conducted a study, analyzing the 200 largest U.S. cities in terms of the growth in middle-class incomes, households and businesses and industries employing them. But, what is considered “middle class”? Middle class is ultimately based on income, with educational achievement and status being secondary factors. According to Pew Research, middle-class incomes are those that are two-thirds to double the national median. This is crucial because it demonstrates how being middle class actually shifts from place to place.
For example, Miami’s median household income is $33,999, making its middle-class income range $22,666 to $67,998. But in San Francisco, the median household income is $96,265, making its middle-class income range $64,177 to $192,530. But despite these differences, you can still find places where America’s middle class is thriving.
America's middle class is thriving in these 20 cities
America's middle class is thriving in these 20 cities
Median household income: $33,999
Five-year median income growth: 14.2%
Middle-class income range: $22,666 to $67,998
It might seem odd for the middle class to be thriving when Miami’s median household income is $33,999, far less than the U.S. median income of $57,652, according to the Census Bureau’s 2017 American Community Survey. However, it’s key to remember that Florida is one of seven states with no income tax.
Much of Baltimore’s economy is fueled by the city’s universities and healthcare system. According to the Bureau of Labor Statistics, the education and health services supersector employs the most people, reaching 290,900 workers in November 2018, up 2.4 percent from the previous year.
18. Raleigh, N.C.
Median household income: $61,505
Five-year median income growth: 14.5%
Middle-class income range: $41,003 to $123,010
In September 2018, Raleigh’s unemployment rate dropped to 2.6 percent, its lowest point in 10 years, according to the BLS. A major part of Raleigh’s economic prosperity is the city’s emergence as a top tech and entrepreneurial center. The city’s Research Triangle Park is a leading research campus, comprised of North Carolina State University, University of North Carolina at Chapel Hill and Duke University.
The prosperity of the city is reflected in the real estate market. Home values have surged, from a median of $142,000 in December 2015, up to $204,000 as of December 2018, according to Zillow. The housing market is healthy, with homes spending an average of 56 days on Zillow, fewer than the U.S. average of 78 days, which reflects solid demand without being too “hot” and leading to a housing shortage.
16. Nashville, Tenn.
Median household income: $52,858
Five-year median income growth: 15%
Middle-class income range: $35,329 to $105,716
Middle-class incomes have risen substantially in Tennessee’s capital city. In the last five years, both the median household income and average third quintile income grew by 15 percent or more, from $45,982 and $46,149 to $52,858 and $53,136, respectively.
With incomes on the rise, home values have increased as well. Over the last five years, Nashville’s median home value increased from just $150,000 in December 2013 to $262,600 by December 2018, according to Zillow. Not surprisingly, Nashville has seen its cost of living rise rapidly in recent years.
Median household income: $62,021
Five-year median income growth: 16.7%
Middle-class income range: $41,347 to $124,042
Boston has been experiencing dynamic economic growth and changes. Entrepreneurs have been launching new companies while businesses are moving from the surrounding suburbs into Boston’s urban center.
14. Irving, Texas
Median household income: $58,196
Five-year median income growth: 18%
Middle-class income range: $38,797 to $116,392
Irving is located in the Dallas metro area and has been on a hot-streak for economic growth. According to Business Facilities magazine, Irving has been particularly successful in luring foreign and domestic global companies to it. Indeed, Foreign Direct Investment (FDI) has been crucial to Irving’s success: It’s the third-biggest city in Texas for foreign capital investments.
13. Washington, D.C.
Median household income: $77,649
Five-year median income growth: 20.8%
Middle-class income range: $51,766 to $155,298
Interestingly, government employment numbers in Washington, D.C., are actually down around 1 percent less than last year. However, the nation’s capital makes up for this with growth in other industries. The financial industry is up 6 percent year-over-year, employing an estimated 31,800 people, the largest amount in the last decade.
Household incomes have been given a boost thanks to the Charleston metro area’s surging economic growth. Although still behind Greenville and Columbia in terms of overall size, Charleston is growing faster than those cities and at its fastest rate this decade, according to the Post and Courier.
11. Austin, Texas
Median household income: $63,717
Five-year median income growth: 21.5%
Middle-class income range: $42,478 to $127,434
Many Texan cities are prospering, but Austin is one of the foremost examples. According to Statesman, the local economy grew by 6.9 percent in 2017, making the Austin-Round Rock region the fastest-growing large metro area in the country last year in terms of inflation-adjusted gross domestic product. This helps explain Austin’s excellent growth in incomes, with the median household income rising by over 20 percent in just five years.
10. Portland, Ore.
Median household income: $61,532
Five-year median income growth: 20.1%
Middle-class income range: $41,021 to $123,064
The median household income in Portland rose by over 20 percent in just five years, from $51,238 to $61,532, an increase of over 20 percent. Meanwhile, the mean household income rose from $71,290 to $85,335, an increase of 19.7 percent. The fact that these increases are comparable in size is a positive sign: When mean household incomes rise faster than the median, it often means a growth in wealth inequality, as the richest pull the mean income upward more than the median.
9. Bellevue, Wash.
Median household income: $105,402
Five-year median income growth: 19.7%
Middle-class income range: $70,268 to $210,804
Bellevue is located east of Seattle, just across Lake Washington. Such close proximity to Seattle has helped Bellevue grow in terms of population and economy. The four principal industries driving the city’s economy are information technology, business services, retail and tourism. According to Bellevue’s website, the number of jobs has grown an average of 1.12 percent per year, with a projected 192,800 jobs to be reached by 2035.
Sunnyvale is part of the San Jose metro area, and thus right in the middle of Silicon Valley. Not surprisingly, the industry that’s leading much of the prosperity is technology and information. According to the Census Bureau, the information industry experienced the biggest growth in employment, rising from 3,654 workers in 2012 to 6,591 in 2017, for an exceptional increase of 80.4 percent in five years.
Median household income: $60,098
Five-year median income growth: 22.4%
Middle-class income range: $40,065 to $120,196
Like many U.S. cities, the information industry is a major pillar of employment. In Denver, the number of people employed in the information industry exceeded 50,000 for the first time in 2018, the largest amount in the last decade.
6. San Jose, Calif.
Median household income: $96,662
Five-year median income growth: 18.8%
Middle-class income range: $64,441 to $193,324
Synonymous with Silicon Valley, San Jose has seen several middle-class-employing industries grow substantially over the last five years. As median household income rose by close to 19 percent, employment in the information industry increased by 30.3 percent, while professional, scientific and management services increased by 25 percent, adding 17,905 workers to its labor force since 2012.
In a matter of five years, Salt Lake City’s median household income rose by about $10,000, from $44,510 in 2012 to $54,009 by 2017. Employment numbers in Salt Lake City have been better than the national average for years. Where the U.S. unemployment rate peaked in the double digits during the Great Recession, in Salt Lake City, the highest it reached was 8.2 percent in January 2010. As of November 2018, Salt Lake City’s unemployment rate was at an impressively low 2.7 percent, a full percentage point lower than the U.S. overall at the same time.
Median household income: $79,565
Five-year median income growth: 25.4%
Middle-class income range: $53,043 to $159,130
Seattle has long been a tech hub, with Bill Gates and Microsoft casting a prominent shadow over the city. As in so many other cities, tech is a major employer of middle-class workers due to its skill-intensive requirements. But the information industry in Seattle really began its surge fairly recently.
According to the BLS, from 2014 to 2015, the number of employees in the information industry increased 3.1 percent on average from year to year. From 2015 to 2016, however, that year-over-year increase ballooned to 7.6 percent, followed by 6 percent from 2016 to 2017, and 6.3 percent from 2017 to 2018.
3. Fremont, Calif.
Median household income: $122,191
Five-year median income growth: 23.2%
Middle-class income range: $81,461 to $244,382
Fremont is located in the San Francisco Bay Area, north of San Jose on the east side of the Bay. Fremont’s economy has undergone some major shifts over the years, much of it becoming more diversified. For example, back in 1999, manufacturing employed more than 27,000 people, comprising 26.9 percent of the civilian labor force. By 2017, the manufacturing industry still accounts for more than 19,000 people, but now just 16.6 percent of the labor force. Meanwhile, professional, scientific and management employment jumped from 15.2 percent in 1999 to 25.1 percent of the civilian labor force in 2017.
It’s sometimes hard to believe how far Oakland has come over the years. According to the Census Bureau, back in 1999, there were only 14,992 households earning $50,000 to $74,999, and 9,260 households earning $75,000 to $99,999. By 2017, those numbers jumped to 24,675 households earning $50,000 to $74,999 and 17,413 households earning $75,000 to $99,999 — an increase of 64.6 percent and 88 percent, respectively.
1. San Francisco
Median household income: $96,265
Five-year median income growth: 30.4%
Middle-class income range: $64,177 to $192,530
Although other major cities might beat San Francisco in terms of income level, none beat it in terms of income growth. In only five years, San Francisco’s median household income has soared by more than 30 percent: from $73,802 to $96,265.
As incomes have risen, several industries have expanded immensely. Information industry grew by nearly 40 percent, adding 8,288 workers in five years. Professional, scientific and management services grew by 31.6 percent and added 28,525 workers to the industry labor force.
Methodology: GOBankingRates determined which cities the middle class is thriving in by analyzing the 200 largest cities in the U.S. by population: (1) median household income in 2017, 2015 and 2012; (2) 2-year median household income growth; (3) 5-year median household income growth; (4) mean income for third, or middle, quintile (40%-60%) of household earners, 2017, 2015 and 2012; (5) 2-year third quintile income growth; (6) 5-year third quintile income growth. All data was sourced from the U.S. Census Bureau’s 2017 American Community Survey.