LOS ANGELES–What does it cost to be middle class? In large part, that depends on where you live. But one researcher here said that when it comes to Los Angeles, middle class means an income of approximately $145,000.
That’s according to Ross DeVol, a researcher with the Milken Institute in Santa Monica, Calif., who said he arrived at his estimate by calculating how much a resident would need to make to spend 30% of earned after-tax income on rent for a two-bedroom apartment in Los Angeles County.
According to the New York Times, to arrive at the figure DeVol used median rents in the county, with a two-bedroom landing at roughly $2,000, a figure that he concedes varies greatly. He then looked at tax brackets to arrive at his conclusion, the Times reported.
Part of the problem in Los Angeles, said DeVol, is that more jobs have been created in the city than has been new housing.
“It becomes a real challenge for companies recruiting people,” he told the Times, invoking his own experience in trying to get new employees. “There’s a real sticker shock in getting them to come here. What we think of as approaching the middle class barely gets you there here.”
DeVol said the median income in the county is roughly $45,000, and that many people spend half their incomes on rent.