A report from the Pew Research Center, released late last year found that for the first time since the 1970s, families defined as “middle income” are actually the minority in the U.S – squeezed from both ends by an enlarged poverty-stricken group below them, and an enriched group about them.
For Pew, middle class Americans live in household earning between two-thirds to two times the nation’s median income. In 2014, that ranged from $41,900 to $125,600 fro a three-person household. Middle class Americans now comprise less than half, or 49.9% of the nation’s population, down from 61% in 1971.
For decades, the middle class had been the core of the country. A healthy middle class kept America strong, experts and politicians said. The young family with kids, its income gradually rising as the years go by, is the foundation of political stability and consensus – and, although the American middle class has been on the decline since 1973, the dream, myth or other storytelling metaphor has survived. Until now.
In 1971, there were 80 million households in the U.S defined as middle income – compared with a combined 52 million in the groups above and below. Now, there are 120 million middle-class families, but 121 million rich and poor – “A demographic shift that could signal a tipping point,” says Pew.
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 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.
“There are fewer opportunities that place people in the middle of the income distribution,” 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.
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.