Some Gen Zers can't believe a $74,000 salary is considered 'middle class'

WORKING CLASS IS $100,000 

AND UNDER IN NORTH AMERICA

Story by insider@insider.com (Geoff Weiss) • 8h

"It would take you years to save up the $30,000 you would need for a down payment," the TikTok real-estate agent Freddie Smith said. 

DenisKot© Provided by Business Insider

• A recent Newsweek survey indicated Gen Zers didn't consider a $74,580 salary "middle class."
• A real-estate TikToker responding to the survey described homeownership as a distant dream for many.
• One commenter suggested that "100k is the new 45k."

An Orlando real-estate agent sparked a conversation on TikTok after sharing a survey that suggested Gen Zers didn't consider a $74,580 annual salary "middle class," in contrast with how older generations answered.

In a video with more than 8 million views, the real-estate agent, Freddie Smith, described a Newsweek survey conducted last month among 1,500 participants. Only 41% of Gen Z respondents indicated they considered $74,580 a middle-class salary, while 50% of millennials, 61% of Gen Xers, and 73% of baby boomers said the same.

According to the US Census Bureau, $74,580 was the real median household income in 2022.

Even still, Smith suggested $74,000 was much higher than the average Gen Zers' salary.

Smith broke down theoretical monthly expenses for a "financially responsible" Gen Zer, pegging a monthly take-home salary at roughly $4,300 after taxes, health insurance, and 401(k) investments.

Smith factored in rough estimates for rent ($1,400 for a shared apartment in a midsize city), groceries ($600), and other expenditures such as student loans, car payments, phone bills, and leisure activities. At the end of the month, Smith said, the Gen Zer would be left with about $650 — a meager sum that would make homeownership a distant dream.

"It would take you years to save up the $30,000 you would need for a down payment on a house with the closing cost," he said.

Smith told Business Insider that a housing market in low supply coupled with high interest rates had priced out the average American from buying a home.

He added that he believed housing, college, and daycare costs were the three biggest factors in "moving the middle-class goalpost," estimating that someone starting out their life today would need to make $120,000 to $150,000 "to be considered middle class."

Commenters on TikTok appeared to share his dismay, with some bemoaning what they felt were rising living costs. One person wrote that "100k is the new 45k."

"23 and making 73k, reflect on this often," another said. "My dad raised 3 kids on a bit over 70k, has a house and we took vacations every year…real bummer to think about."

Some Gen Zers have been outspoken about their salary expectations, with some six-figure earners telling Business Insider last year that expenses such as childcare and housing meant they felt they needed to make even more to be comfortable.

Correction: January 4, 2024 — An earlier version of this story misidentified the salary in the Newsweek survey. It was $74,580, not $74,850.

Correction: January 5, 2024 — An earlier version of this story also misidentified the salary in a SmartAsset analysis. It was $54,080, not $52,156. The figure, which applied mostly to millennials, not Gen Zers, was removed from the story.