The middle class is now less than half of the U.S. population

10 Dec 2015 | Author: | No comments yet »

Here’s How Much the U.S. Middle Class Has Changed in 45 Years.

In the age of rising income inequality, the task of preserving America’s middle class has been taken on by politicians across the ideological spectrum. The number of households that are middle class is now matched by those that are either upper or lower income, according to a report released Wednesday by the Pew Research Center.

The trend is so firmly established that it may well continue; Americans have experienced “a demographic shift that could signal a tipping point,” Pew researchers concluded Wednesday. And middle-income Americans not only have shrunk as a share of the population but have fallen further behind financially, with their median income down 4 percent compared with the year 2000, Pew said.

Meanwhile “a flurry of new research points to the potential of a larger middle class to provide the economic boost sought by many advanced economies.” Pew defines a middle-class household as one having income that is two-thirds to double that of the overall median household income. However middle-income households have lost their majority status in the U.S, with the size of their counterparts on opposite ends of the income spectrum overtaking them in number. While households across the spectrum have seen higher earnings over the past several decades, upper-income households have seen their pay rise the most. Median income for middle income families declined 4 percent between 2000 and 2014, and their median wealth, decimated by the Great Recession, cratered by 28 percent between 2001 and 2013, the report said.

Slightly more than half of Americans (about 50.1 percent) either live in a lower-class household (roughly 29 percent) or an upper-class household (about 21 percent). One positive note is that blacks are the only major racial group to see a decline over that time frame in their share of adults who are low-income, which is down to 43 percent from 48 percent. The share of households earning more than three times the median income — $188,000 a year for a family of three in 2014 dollars–is now 9 percent, up from just 4 percent in 1971. For example, in August, Georgetown University’s Center on Education and the Workforce released a study showing that high-paying jobs are proliferating, but not middle-income jobs.

Despite that progress, African Americans and the elderly still remain more likely than other Americans to be lower income, and less likely to be higher-income. But the middle third jobs have not yet recovered from the recession — that category is still showing 900,000 fewer jobs, compared with pre-recession levels. While the economic status of Americans with bachelor’s degrees changed little from 1971 to 2015, those who did not graduate from college fell down the income ladder. That shift was magnified by evolving social trends, which saw marriage in decline overall, but especially for those with fewer educational credentials.

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