In a minor metro, middle class generally means comfortably paying the mortgage on a middling single family house in a good school district with a sub-25-minute car commute.
In some major metros, $120k is struggling to pay the rent on an okayish family-sized apartment in a below-average school district with an hour-plus public transit commute, with homeownership maybe creeping into the realm of possibility by making extreme sacrifices to save for 15-20 years for a down payment.
I don't understand this mentality. If you're paying $3600+ in rent and are struggling, then you need to find a cheaper place to live or find a roommate, because you simply cannot afford it.
Oh, I have plenty of discretionary income for my situation. Maybe a teensy bit more than I would in a place with low housing costs but also low salaries.
But even a sacrifice of 100% of my discretionary income wouldn't put homeownership or childrearing (extra bedroom + good school district or private tuition) within reach. Certainly not both. Maybe I'll get to pick one on this salary if I ever see liquidity on my equity, but really I'm holding out for making a much higher salary in 10-20 years.
It's a fun thing to do with my early 20s. But I understand the presumption that a middle-aged man would not take this salary, as it'd be pretty damn difficult to rent more than a studio. Even the studio is extravagant: several of my peers of similar age have roommates. A family is certainly below middle class if it has to share an apartment with other families.
> I have plenty of discretionary income for my situation.
Then it sounds like your salary is great.
> But even a sacrifice of 100% of my discretionary income wouldn't put homeownership or childrearing (extra bedroom + good school district or private tuition) within reach.
Middle class doesn't mean you get all that without effort. You have to budget, you have to shop around for the right neighborhood, you may not have the option of spending money on a whim, your partner may need to find a job, but $120,000 is more than enough to buy a great home in a good neighborhood, it just won't be one in the heart of the city.
> Even the studio is extravagant: several of my peers of similar age have roommates
Right ... you're living in an expensive studio apartment in the city, you have to move when you want to start a family unless you're making much more money than a typical senior level engineer.
>$120,000 is more than enough to buy a great home in a good neighborhood
What? Let's suppose I could save $1,000/mo over 10 years, giving me a $120k down payment. (After retirement savings and $3k rent, this would leave me about $1000/mo in discretionary spending, including groceries).
The figure that maxes out a debt-to-income of .36 is $3526/mo, corresponding to a home value of around $640k.
For two bedrooms, that's a fixer-upper far from transit in a bad part of any East Bay BART stop town. And that's today: run the last 10 years of increases out another 10 years.
A $640k house is an amazing home almost everywhere in the country. The problem you're describing here is that the region you're living in has insanely high real-estate prices compared to the rest of the country and you cannot afford to live there.
Jobs that would pay someone like me $120k don't exist "almost everywhere in the country." They exist here, and in drastically smaller numbers in a few real estate markets with similar characteristics: New York, Seattle, maybe LA or Boston. Some of these have cheaper prices today, but also steep growth curves. I think they'll all be pretty similar in 10 years.
You're making my argument for me: $120k is "you can't afford to live there" territory, i.e. barely if even middle class, for the vast majority of software engineering jobs that would pay it to junior engineers.
Therefore it's reasonable to think middle-aged engineers would not take it, and that it would be a waste of time to interview them if that's your salary ceiling.
Of course $120k is great money and $640k is a great house in some places. These are not the same places where junior engineer salary ~ senior engineer salary ~ anywhere near $120k. They would pay more like $60k to the junior and $80k to the senior.
You're living in a bubble where you've somehow been lead to believe that the only places where software engineering jobs exist is in the most expensive cities in the world.
These jobs are all over the country, that's just a fact, even excluding remote positions.
> The context of this thread is paying senior engineers the same as juniors, around $120k, which implies an expensive coastal city.
I never said anything about juniors, I said that seniors often make around $120k already and at some point there are diminishing returns on the business value of seniority for engineers. If my company is paying the senior engineering staff around $120k/ea why would we then pay a new-hire $180k because they have 25 years of experience when they likely produce work of a similar quality to our engineers with 15 years. I'd be much better off hiring a new engineer at $120k and using the difference to provide raises to my core engineering team that hold onto critical business process experience. Of course, exceptional candidates can command an exceptional salary, but they're the exception by definition.
Looking on Glassdoor for places where $640k is a great house - Omaha, Milwaukee, Minneapolis, Akron, Des Moines, etc. - the median software engineer there is making $70-80k. Great money, upper middle class in context, but not $120k.
$120k seems unrealistically above market, even for a seasoned old pro, in such places. Am I off base?
Of course if you're paying it there, then it's an extremely lucrative gig. But as far as I can tell, there are maybe a few hundred such positions in the country.
Are you familiar with the "Old economy Steve"-memes? Not all places have those magical cheap homes readily available. The US (and Canada/EU) in 2017 are made of two kinds of places: 1) Incredibly expensive housing 2) No jobs.
You don't start with a salary and then choose a city. The city determines the salary. If you can find a salary at all, it's likely to be in a high COL city.
Of course I'd love to make $120k from somewhere that buys a nice house. That is, far as I can tell, not an option. I can save while living in a high COL city and then buy a house for cash in a low COL city, but I'd still need a job to pay property taxes/groceries/transportation. In cheap areas, the pickings are slim.
In some major metros, $120k is struggling to pay the rent on an okayish family-sized apartment in a below-average school district with an hour-plus public transit commute, with homeownership maybe creeping into the realm of possibility by making extreme sacrifices to save for 15-20 years for a down payment.
So yes, barely middle class.