Why America’s Upper Middle Class Is Growing

Summary

WSJ What’s News – PM Edition

Episode Title: Why America’s Upper Middle Class Is Growing
Date: April 6, 2026
Host: Alex Zosola, Imani Moise
Featured Guest: Rachel Ensign (WSJ Economics Reporter)

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Episode Overview

This episode delves into the surprising rise of America’s upper middle class—exploring why this group is expanding, what factors are fueling the shift, and why many who are classified as “upper middle class” still feel financially insecure. The episode also recaps top news including breaking geopolitical developments with Iran, OpenAI’s staggering financial commitment to AI R&D, and a historic milestone for NASA’s Artemis 2 mission.

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Key Discussion Points & Insights

1. Geopolitical Tensions: The Iran Deadline

[00:20–03:05]

• Context:
  The day before President Trump’s deadline for Iran to reopen the Strait of Hormuz, Iran rejected a ceasefire proposal.
• US Response:
  President Trump deemed Iran’s counter offer “not good enough” but acknowledged it as “a significant step.”
• Military Preparations:
  Defense Secretary Pete Hegseth revealed major US strikes may occur imminently, hinting at targeting energy infrastructure if Iran does not comply.
• Market Reaction:
  Stocks and oil prices climbed modestly on uncertainty.

Notable Quotes:

• Pete Hegseth:

  “They would like to be able to make a deal. I can't say any more than that.” (01:33)
  “The entire country can be taken out in one night, and that night might be tomorrow night.” (02:07)

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2. America’s Upper Middle Class: Expansion & Perception

[03:39–07:32]

Background & Findings

• Report:
  The American Enterprise Institute finds the number of households considered upper middle class has tripled in 50 years.
• Driving Factor:
  White collar wages have consistently outpaced prices, according to economists.
• Definition:
  Upper middle class is defined as annual income between $133,000–$400,000 (does not include assets or wealth).

Pathways Into Upper Middle Class

• “The recipe that seems most surefire for joining the upper middle class or staying in it seems to be: get a degree… and be married or have a partner that you live with.” — Rachel Ensign (04:45)
• Education (bachelor’s, graduate degrees) plus marital status is the “ticket.”

On Paper vs. In Practice

• Many who statistically qualify as upper middle class don’t feel wealthy due to:
  • Persistent inflation in daily expenses
  • Rising costs on “milestone” expenditures (housing, college)
• Classic example: Randy Schilling, an engineer whose upward mobility was enabled by education and home ownership, feels secure but not “rich.”

Notable Quotes:

• Rachel Ensign:

  “People may be upper middle class on paper, but if they can't afford to send their kids to college easily or buy a home, that doesn't really feel very affluent to them.” (06:15) “The things that are the hallmarks of an upper middle class life… have gotten very, very, very expensive.” (06:15)

• Imani Moise:

  “That's interesting. So how are we defining the middle class, at least for the purposes of this study?” (05:12)

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3. Inflation Still a Pressing Concern

[07:38–08:48]

• ISM Services Index:
  Pricing pressures in US services (transportation, healthcare, food) are at a four-year high; March’s jump was the largest in 13 years, stoking more inflation worries.
• Market Linking:
  This sentiment echoes the upper middle class’s struggle: earnings may be up, but so are living costs.

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4. New Children’s Savings Accounts: Wall Street Winners

[08:48–09:07]

• Government Contracts:
  BNY Mellon and Robinhood have been chosen to design and manage government-backed children’s savings accounts, a coveted opportunity due to the potential to gain long-term customers.

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5. OpenAI, Anthropic, and the Cost of AI Leadership

[09:07–10:43]

• IPO Prep:
  Both AI giants are preparing for possibly record-breaking IPOs.
• Financial Risks:
  OpenAI projects $121 billion in annual computing spend by 2028—with an anticipated $85 billion burn that year—even after strong revenue growth.
• Rationale:
  The massive expenditure aims to keep a technological edge in AI models; but it also creates existential financial risk.

Notable Quote:

• Berber Jin (WSJ Tech Reporter):

  “If the narrative turns on OpenAI as a public company, they’re probably going to have to change their strategy… Otherwise the numbers show that they literally will go out of business.” (10:32)

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6. Artemis 2: New Lunar Distance Record

[10:43–11:23]

• Achievement:
  At 2:00pm EST, Artemis 2 astronauts broke the record for farthest distance humans have traveled from Earth, surpassing Apollo 13’s record.
• Next Steps:
  The mission has several thousand more miles to reach its maximum planned distance later today.

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Timestamps for Important Segments

• Iran/Trump Deadline Coverage: 00:20–03:05
• Introduction to Upper Middle Class Findings: 03:39–04:45
• Analysis of Societal, Psychological Factors: 06:09–07:32
• Inflation, ISM Report: 07:38–08:48
• Children’s Savings Accounts Contracts: 08:48–09:07
• OpenAI/Anthropic Financial Deep Dive: 09:07–10:43
• Artemis 2 Record: 10:43–11:23

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Memorable Moments & Quotes

• Rachel Ensign on upper middle class discomfort:

  “Even if in reality their income has gone up… that feeling that everything's getting more expensive, even if you really do have the money to pay for it, it's something people are still grappling with.” (06:15)

• Berber Jin on OpenAI’s spending risks:

  “It’s high risk, high reward… because if the narrative turns… they literally will go out of business.” (10:32)

• Pete Hegseth (re: Iran):

  “The entire country can be taken out in one night, and that night might be tomorrow night.” (02:07)

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Tone & Style

• The episode maintains the classic WSJ tone: measured, analytical, with direct quotes from reporters and policymakers.
• Discussions combine empirical findings with real-life stories and candid reflections on public sentiment.

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Summary

This episode expertly weaves data-driven insights on class, inflation, and tech with urgent geopolitical news and a historical space milestone. Its central theme is that a growing upper middle class does not equate to widespread feelings of security or affluence—largely because the hallmarks of prosperity have become so much costlier, even as incomes rise. The result is a country both richer and more anxious than ever.

Transcript

[Morningstar/Oppenheimer Announcer]

Data is everywhere. When orchestrated properly, it sings. At Morningstar, we analyze and enrich data, making it actionable and powerful for you. Morningstar, where data speaks

[Alex Zosola]

A day before President Trump's deadline on Iran, the country rejects a proposal for a ceasefire. Plus, a new report shows that the upper middle class is getting bigger and richer, even if people in IT don't feel that way.

[Rachel Ensign]

So people may be upper middle class on paper, but if they can't afford to send their kids to college easily or buy a home, that doesn't really feel very affluent to them.

[Alex Zosola]

And astronauts on the Artemis mission break a more than 50 year old record. It's Monday, April 6th. I'm Alex Osoleff for the Wall Street Journal. This is the PM edition of what's News. The top headlines and business stories remove the world today. It's the day before President Trump's deadline for Iran to reopen the Strait of Hormuz. Earlier in the day, Iran rejected a proposal from the US and regional mediators for a 45 day ceasefire in exchange for opening the strait. President Trump said Tehran's counter proposal for a ceasefire is, quote, not good enough, though he called it a significant step. During a press conference this afternoon, President Trump answered a reporter's question about how negotiations between the two countries were going. Would a new ceasefire include Israel or would it just be between Iran?

[Pete Hegseth]

We can't talk about cease fire, but I can tell you that we have a active, willing participant on the other side. They would like to be able to make a deal. I can't say any more than that.

[Alex Zosola]

Defense Secretary Pete Hegseth said that today and tomorrow would see the largest volume of US Strikes on Iran since the start of the conflict. The Journal has learned that the US Military is making preparations for potential strikes on energy targets in Iran ahead of Trump's deadline of tomorrow night at 8pm Eastern. Trump threatened what would happen if Iran failed to meet it.

[Pete Hegseth]

The entire country can be taken out in one night, and that night might be tomorrow night.

[Alex Zosola]

A reporter asked President Trump during the press conference whether he was worried that hitting civilian targets like power plants and bridges would violate the Geneva Convention.

[Imani Moise]

Are you concerned that your threat to bomb power plants and bridges amount to a crime?

[Pete Hegseth]

No, no, no. I hope I don't have to do it.

[Alex Zosola]

He added that his aim was for Iran to never acquire a nuclear weapon. Stocks and oil prices both climbed as investors awaited more details on whether the Middle east war would pause or intensify this week. Major US Indexes held on to modest gains after Trump's press conference with the Nasdaq adding about half a percent. Oil prices finished the day about 0.7% higher due to short term supply concerns. Coming up, our reporter took a deep dive into the finances of OpenAI and Anthropic ahead of their expected IPOs. That and more after the break.

[Dan Aronson]

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[Imani Moise]

Welcome back to what's news. I'm Imani Moise, host of what's News and Markets here with an update on American wealth. The number of households considered upper middle class has tripled over the last 50 years. That's according to a recent report from conservative think tank American Enterprise Institute. Economists say that this is happening because white collar wages have been growing faster than prices. WSJ economics reporter Rachel Ensign spoke to several families who broke into this economic tier and they say they don't feel rich. She joins us now to explain. Thanks for joining us, Rachel.

[Rachel Ensign]

Thanks for having me.

[Imani Moise]

So what's happening with the middle class? Can you set the scene for us?

[Rachel Ensign]

We wrote about this new research that shows the middle class is shrinking, but it's not necessarily because a lot of people are getting poorer. It's because many people have ascended to this new level of affluence in the upper middle class. And if you look at incomes in different groups, even pegged for inflation, everyone has gotten richer over the last 40, 50 years, even accounting for inflation, but especially the most affluent people. What's interesting is the recipe that seems most surefire for joining the upper middle class or staying in. It seems to be get a degree, a bachelor's degree is good, graduate degree, even better, and be married or have a partner that you live with. And those those two things are sort of the ticket to being in the upper middle class.

[Imani Moise]

That's interesting. So how are we defining the middle class, at least for the purposes of this study?

[Rachel Ensign]

In this study, they define upper middle class as between $133,000 a year in annual income and $400,000 a year. They don't look at wealth, which is how much your home is worth, how many, you know, how much your stock portfolio is worth and things like that.

[Imani Moise]

And you spoke to a lot of families as part of your reporting who are going through this right now which household dynamic do you think was the best illustration of this trend?

[Rachel Ensign]

So Randy Schilling, who is one of the people mentioned in this story, his parents didn't go to college and then he did. He got a job at a chemical plant. He's an engineer. Early on, you know, wasn't making that much money, but just kind of moved up. You know, he bought a house a long time ago that's definitely appreciated in values. So he's feeling pretty good financially.

[Imani Moise]

A lot of the households that you featured in your story said that they don't necessarily feel wealthy. Why is that sentiment so common?

[Rachel Ensign]

Well, it's, it's a really good question. And that's part of why this whole phenomenon is a little surprising to people, that, you know, there actually are more affluent people. Well, yeah, but everyone feels terrible about the economy. So how do those two things go together? And I think there's probably two main factors. One is that inflation on everyday things is something people still think about all the time. So even if in reality their income has gone up a lot in the last 10 or 20 years, that feeling that everything's getting more expensive, even if you really do have the money to pay for it, it's something people are still grappling with. And then the other element is that even though it's pretty clear that everyone has gotten richer adjusted for inflation, that the things that are the hallmarks of an upper middle class life for people, whether it's buying a home or paying for your kid to go to college, those things have gotten very, very, very expensive. So people may be upper middle class on paper, but if they can't afford to send their kids to college easily or buy a home, that doesn't really feel very affluent to them.

[Imani Moise]

That was WSJ economics reporter Rachel Ensign. Thanks, Rachel.

[Rachel Ensign]

Thanks, Imani.

[Imani Moise]

An index tracking pricing pressures facing the US Services industry reached the highest reading in four years last month. That's according to a report out today from the Institute for Supply Management. The index, which is based on surveys from purchasing managers across industries like transportation, health care and food services, rose to 70.7 in March, up from 63 the month before. That's the largest one month increase in 13 years. Any reading above 50 means companies are facing rising prices. More inflation data from the government is due later this week. Wall street has been racing to win government contracts tied to new savings account for children created last year as part of the new tax code. That race is now over. We're exclusively reporting that the Trump administration has tapped BNY Mellon and Robinhood to design and manage the accounts. Part of the reason these contracts were so coveted is that they could be a way to acquire customers for life. Tens of millions of children are eligible for the accounts, which can grow tax deferred for decades. The platform will be a custom white label product for the treasury, meaning it won't have BNY or Robinhood branding. Financial terms of the contracts weren't disclosed. And as we mentioned on this morning's show, sponsors are dropping out of a London music festival after controversial rapper Kanye west was named as a headliner. Budweiser parent Anheuser Busch InBev has now become the latest sponsor to pull out, following fellow beverage makers PepsiCo and Diageo.

[Alex Zosola]

OpenAI and Anthropic are racing toward potentially record breaking initial public offerings by the end of this year. Our reporter Berber Jin took a deep dive into the financials of both companies. OpenAI expects to spend $121 billion on computing power for AI research in 2028. That means the company anticipates burning through $85 billion that year, even after almost doubling sales from the prior year. Losses of that size would be far bigger than those of virtually any other public company in history. But as Berber told our Tech News Briefing podcast, that's because the company has to pour more resources into creating new versions of its AI mod, putting out faster than ever before.

[Berber Jin]

I think the most surprising thing is just how much money OpenAI is set to spend on research and development. The company has made very aggressive decisions to just lock up a lot of computing capacity. And so it's high risk, high reward for OpenAI because you can see a world in which that gives them an edge, right? If they're putting a lot more money into training, they should have better models than Anthropic, and that should in turn give their products an advantage. But it's also really risky because it means that if they go public, as they're expected to, they have to just constantly be raising money to make up for the massive amounts of cash that they're going to burn every year. So if the narrative turns on OpenAI as a public company, they're probably going to have to change their strategy when it comes to how much they spend. Otherwise the numbers show that they literally will go out of business.

[Alex Zosola]

To hear more from Berber, listen to tomorrow's episode of Tech News Briefing. And finally, around 2:00pm Eastern today, the astronauts on NASA's Artemis 2 lunar mission broke a record. They've traveled more than 248,655 miles from Earth. That's the farthest distance from Earth that any humans have gone in history. Farther than the previous record holders, the crew that traveled in the Apollo 13 mission in 1970. The Artemis mission has a few thousand more miles to go before it reaches its maximum distance which it's expected to do later today. And that's what's news for this Monday afternoon. Today's show is produced by Imani Moise, Anthony Bansi and Alexis Green with supervising producer Matthew Walls. I'm Alex Zosola for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

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