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Is the American Middle Class Disappearing? 4 Stats to Consider

by Peter Thomas Ricci

Where does America’s middle class stand financially? New analysis from the Pew Research Center explains

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The U.S. middle class, which has long defined the country’s economic prosperity, is no longer the majority of Americans.

That eye-grabbing finding came courtesy of new research from the Pew Research Center, which found that in early 2015, 120.8 million adults were in middle-income households, compared to a combined 121.3 million in lower- and upper-income households.

Dramatic population and income shifts over the last 40 years have contributed to this moment, and to better demonstrate those shifts, we created a number of graphs based on Pew’s research.

Population Reversal

In 1971, there were 80 million Americans who lived in middle-income households, far above the 51.6 million who lived in upper- or lower-income households. Forty-three years later, though, that breakdown had changed dramatically, with middle income’s 120.8 million lagging behind the combined 121.3 million for upper/lower income.

Here is a graph showing the reversal:

The combined population of lower- and upper-income individuals demands closer scrutiny, and Pew’s research on that front does offer a silver lining to its findings on the middle class. According to Pew, while the middle class has shrunk from 61 percent of the population to just under 50 percent, the highest income earners have more than doubled from 4 percent of the population to 9 percent – and considering that the upper-middle income earners’ share has been static at 12 percent since 1981, it is conceivable that middle-class Americans moved into the highest-earning echelon.

However, Pew also found that Americans in the lowest-earning rung rose from 16 percent of the population to 20 percent, while the lower-middle income share has remained at 9 percent since 1971 – meaning that some middle-class households have also fallen into the lowest economic level. And as we’ll explore in subsequent graphs, it’s more likely that middle-income households have lost ground, rather than gained ground.

Rising Share of the Income Pie

In 1970, middle-class households comprised 62 percent of all the income earned in America, compared to 10 percent for the lower class and 29 percent for the upperclass. As with the early population stat, though, those proportions have changed considerably, and as of 2014, upperclass households now earned more income than the middle-class, with their 49 percent comfortably ahead of the middle class’ 43 percent. Such statistics are consistent with past reports on inequality in America.

Here is how the divide has shifted:

Growing Incomes by Class

Given how much upperclass households now account for the overall income in the U.S., it is unsurprising that the raw income numbers have also grown. From 1970 to 2014, Pew found, income for upperclass households has grown from $118,617 to $174,625, an increase of nearly $56,000. Middle-class households, meanwhile, have seen their income rise nearly $19,000, from $54,682 to $73,392.

The graph below shows how incomes have changed:

The Soaring Wealth Divide

Perhaps no statistic better demonstrates the trials of the middle class than wealth – meaning equity in homes, stocks and other investments – which has grown marginally for the middle class, fallen for the lower class and soared for the upperclass.

Since 1983, Pew found, the wealth for lower-class families has fallen from $11,544 to $9,465, while for middle-class families, wealth has risen slightly from $95,879 to $98,057; the lackluster performance for both classes is no doubt a result of the foreclosure crisis, which badly damaged equity in middle- and lower-class neighborhoods to a level that many have still not recovered from. By contrast, the wealth for upperclass families has skyrocketed from $323,402 to $650,074. Back in 1983, for every dollar of wealth that middle-class families had, upperclass families had $3.37; as of 2013, that share had grown to $6.63, the largest wealth gap on record.

Our final graph below demonstrates that gap:

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