It seems (in the US) landing in the upper middle class means that you might face an unusually bad crunch in finances and lifestyle, despite making a salary at or above 95th %:
(1) There's a gray zone in financial aid, so you could be upper middle in gross household salary (say $150-250k; outside the Bay Area) and be expected to pay full bill at a private college (right now ~$250K).
Costs may keep inflating at a rate multiple % above inflation, implying a worse crunch in the future. Much of the surplus savings people in high-paying jobs are accruing will be garnished by colleges in the form of increased tuition + room and board down the road. In a weird way, you could argue this affects the decisionmaking about the number of kids you can have.
(2) High salary + need enough space => moving away from the city, a massive detractor from wellbeing. The obvious problem is the commute; the less obvious one is becoming disconnected from friends, which is particularly acute in 'transient cities' like SF and NYC. Marginal commuting costs also somewhat offset the marginal gains of a high-paying job that's further away.
(3) High-paying jobs generally mean longer hours, increased stress, and are often higher risk. Vacation in the US tends to be very low. These days there's also an increasing obligation to be 'always on'.
(4) Some costs tend to scale with salary: prop taxes near high-salary regions, insurance. Home ownership itself (arguably unrelated to being upper middle) is usually net losing or poor ROI vs renting.
So it seems like a surprisingly bad game to be upper middle class: you work harder to make not that much more marginal wealth, with less time to live well and (likely) fewer enriching social connections.
What are some ways to hack around this? Save up in the US and then move to France or Germany just before your kids go to college? Squirrel away assets to shield them (legally) from financial aid calculations? What else?
2) Affordability of housing is definitely a problem, but it's not just isolated to the upper middle class. Look at teachers, for instance, many of whom can not afford to live in the wealthy districts that they teach in. Or look at teachers in Oklahoma and WV and AZ, they can't afford their cheaper locales.
3) The upper middle class have it much, much better than low-wage workers, many of whom may be fired if they need to take a day or two off for an emergency. Nevermind paid time off, that's a rarity for many below the upper middle.
4) Yes, costs do scale with higher salary. It's not true to say that ownership vs rent is definitely "net losing", it's entirely situational based on interest rates, property taxes, local rents, and many other factors.
Overall: The larger problem is this: everyone outside of the corporate top echelons is getting squeezed. It's less about which non-top-tier you're in, but if you're not a millionaire or billionaire, you're getting a much less good deal. To say the upper middle class have it particularly bad is not fair at all to everyone below them, who have it far worse.
You might counter that these people do not have the skills the upper-middle does. But developing those skills is probabilistic and is aided by a good home life, strong schools, and an environment conducive to learning. Many poor individuals simply do not have the life setup they need to gain top level skills over the years.
I taught in public schools in Chicago's warzones, the South and far-West sides. It's hard for a kid to pick up a STEM career when their cousin just got gunned down, when they need to join a gang based on what block they are on, lest they be jumped by a rival block's gang on the walk to school. It's hard for them to skill up and get ahead when their father is incarcerated and their single mother is struggling to pay the bills. If their classmates and cousins are getting gunned down due to some cycle of pointless violence, how likely are they to learn their way to the top 95%?