Middle-class decline hits an alarming inflection point
Middle-class decline hits an alarming tipping point
The debate over a
declining middle class and income inequality isn't just rhetoric. A
respected new study shows that the great American middle class is no
longer the majority.
Since the early ’70s, the Pew Research Center
has been studying household income trends in America. This year marks
the first time that the middle class is no longer the majority.
In the survey from earlier in 2015, adults in middle-income households totaled 120.8 million. But those in either upper- or lower-income households were 121.3 million.
This marks a staggering shift from 1971, when the middle class comprised 61 percent of adults. Now, it’s roughly 50/50 but the middle earner is losing ground fastest. Median household wealth in the middle collapsed 28 percent from 2001 to 2013.
Also, “fully 49 percent of U.S. aggregate income went to upper-income households in 2014, up from 29 percent in 1970,” the report states. Middle-income households, meanwhile, pulled in 43 percent of income in 2014 compared with 62 percent in 1970.”
Few would dispute that one of America’s signature achievements was creating the greatest middle class in history — and one that was growing and increasingly open to all. It was also an essential element to social stability and economic growth. Now it is being pushed into retreat.
Pew defines the middle as earning between $24,173 and $54,053, depending on the number of people in the household.
Pew divides earners into five groups depending on income. The growing cohorts are the highest quintile, at 9 percent vs. 4 percent in 1971, and the lowest earners at 20 percent vs. 16 percent when the survey began. The lower- and upper-middle have remained about the same.
You can read the entire Pew report here.
Probably the best overall coverage of the report comes from Financial Times (registration required), which benefited from an embargoed copy. On Naked Capitalism, Yves Smith is characteristically direct in cutting through Pew’s effort to be inoffensive on a flashpoint issue in American politics.
Today’s Econ Haiku:
Dear antitrust folk
If Dow hooks up with DuPont
It’s bad chemistry
In the survey from earlier in 2015, adults in middle-income households totaled 120.8 million. But those in either upper- or lower-income households were 121.3 million.
This marks a staggering shift from 1971, when the middle class comprised 61 percent of adults. Now, it’s roughly 50/50 but the middle earner is losing ground fastest. Median household wealth in the middle collapsed 28 percent from 2001 to 2013.
Also, “fully 49 percent of U.S. aggregate income went to upper-income households in 2014, up from 29 percent in 1970,” the report states. Middle-income households, meanwhile, pulled in 43 percent of income in 2014 compared with 62 percent in 1970.”
Few would dispute that one of America’s signature achievements was creating the greatest middle class in history — and one that was growing and increasingly open to all. It was also an essential element to social stability and economic growth. Now it is being pushed into retreat.
Pew defines the middle as earning between $24,173 and $54,053, depending on the number of people in the household.
Pew divides earners into five groups depending on income. The growing cohorts are the highest quintile, at 9 percent vs. 4 percent in 1971, and the lowest earners at 20 percent vs. 16 percent when the survey began. The lower- and upper-middle have remained about the same.
You can read the entire Pew report here.
Probably the best overall coverage of the report comes from Financial Times (registration required), which benefited from an embargoed copy. On Naked Capitalism, Yves Smith is characteristically direct in cutting through Pew’s effort to be inoffensive on a flashpoint issue in American politics.
Today’s Econ Haiku:
Dear antitrust folk
If Dow hooks up with DuPont
It’s bad chemistry
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