Middle class no longer dominates in the U.S.
Janill Gilbert stashed this in Money
The once-strong middle class no longer dominates America. Middle class Americans now comprise less than half, or 49.9%, of the nation's population, down from 61% in 1971, according to a new Pew Research Center report. For Pew, middle class Americans live in households earning between two-thirds to two times the nation's median income. In 2014, that ranged from $41,900 to $125,600 for a three-person household.
For decades, the middle class had been the core of the country. A healthy middle class kept America strong, experts and politicians said.
But more recently, these residents have struggled under stagnating wages and soaring costs. Presidential candidates on both sides of the political aisle are campaigning on ways to bolster the nation's middle class and increase opportunities to climb the economic ladder.
The steady decline of the middle class is yet another sign of economic polarization, said Rakesh Kochhar, associate director of research at Pew. Not only are more Americans shifting into the upper and lower classes, but they are moving into the higher range of the upper class and the lower range of the lower class.
This is yet another sign of growing income inequality, he said.
"There are fewer opportunities that place people in the middle of the income distribution," Kochhar said.
One silver lining, however, is that more people are moving up the ladder than down. The ranks of the upper class are growing faster, according to Pew's research.
Senior citizens were most likely to have shifted into the upper class since 1971. The share of Americans age 65 and over in the upper bracket increased nearly 27% over that time. Married couples with no children and black Americans also saw larger gains.
Those most likely to fall into the lower class were those with only a high school degree and high school dropouts, as well as unmarried men.
Here's another sign of how growing income inequality is squeezing the middle class.
Since 1970, upper class households saw their median income soar 47% to $174,600 in 2014. Meanwhile, the middle class only got a 34% boost to $73,400. Still, they have been more prosperous than the lower-income Americans, who only received a 28% bump to $24,074.
Some research shows that increased income inequality and a hollowing out of a nation's middle class stunts economic growth, Kochhar said.
Looking at it another way, the upper class now controls 49% of the nation's aggregate income, up from 29% in 1970.
The middle class used to earn the largest slice of the nation's income. It held 62% in 1970, but that share has since fallen to 43%.
The lower class, meanwhile, holds 9% of the country's income, just under the 10% it earned in 1970.
The rich are not only trumping the middle class in terms of income. They've also seen their wealth soar over the past 40 years.
The median net worth of upper class families doubled between 1983 and 2013, up to $650,100.
But the wealth of the middle class has increased a near negligible 2% over that time to $98,100. At least they fared better than lower-income Americans, who saw their wealth drop 18% to $9,500.
For its wealth calculations, Pew used data from the Federal Reserve Bank's Survey of Consumer Finances, which defines net worth as all of a family's assets minus all their debts.
To check if you are middle class, check out Pew's calculator here.
These trends are unsettling. We live in an increasingly winner take all society.
I was born into lower middle class. Then both my parents worked, and we bumped up to just "middle class". My parents goal was to do better than their parents. They had a very strong work ethic that passed to me, and my brothers. We all grew, married, and did better than our parents, but not until middle age. All of us have retired better than our parents, but, no more than "upper middle class". REASONS: We had an economy with many jobs. Minimum wages did not increase because they were jobs for those in high school and college (you know, "work your way through college"). It wasn't until the "federal" government got greedy, and regulated our jobs out of the country, that made your graph above. I resent what they have done. The word "offend" did not enter my life until about the year 2000. It's time to fuck those who are offended all the time, and take our country back. You need to realize, coming from a "middle class" person, we need the rich. We need greedy rich to be controlled, not by taking their income with more taxes for the government to "give" us, but by giving them what they need to create factories and jobs in the USA. That would be incentives, tax breaks, a reason to grow here instead of overseas. Stop being jealous of the rich, and start being mad at the government. Get them out of our lives, and the graph will change again, OUR way. When was the las time you heard, "free enterprise"? EIIGY POCR OFF entitlements.
I agree that individually we should work hard, save more, pay off debt, and vote.
I've also come to understand that it is very hard to change a system that exists.
There's unhappiness on all ends of the political system with the current system.
I lost the anger long ago.
Now I just want to figure out a way for many people to work together to improve the system.
More growth in the rich group, so maybe we should just hang on, and a good number of us will eventually land in the rich group ;) but it would really suck to be in the poor group, my family hasn't been there for generations, it would take some getting used to ;)
I also agree we should work hard (not expecting a government bail out), save more, pay off debt, and vote. The system is hard to change. It didn't get this way overnight. The "vote" part of this strategy is the most important (in my opinion). It is the voting that will make change. I also agree, anger won't solve anything at all. Understanding economics is a good start, then voting on those that will help our economy, create opportunity, and provide an evironment that will encourage those who have the money to invest in creating jobs. I'm the first to be envious of the rich, but smart enough to know it is the rich that provided what opportunities I have experienced. As to hanging on? Yes, work hard, pay debt, and vote, then you could have opportunities to be that rich person. Then, you can help create jobs too. How else will you stay rich. Who knows, someday, someone might give you a "5 minute favor" then depending on what you do with that favor, success could come your way! That's working together too!