Americans hold on to lots of cherished—but ultimately outmoded—ideals. One of them is, the United States is a middle-class nation.
As it turns out, according to a new study by the Pew Research Center, it’s not. Not anymore.
After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point.
The middle-class has declined both as a percentage of the U.S. population (from 61 percent in 1971 to less than 50 percent in 2015) and in terms of its share of national income (from 62 percent to 43 percent over the same period).*
And that hollowing-out of the American middle-class is not a new phenomenon. It has proceeded steadily for more than four decades.**
The question is, in the midst of the current political debate, will the decline of the United States as a middle-class nation be used as a source of fear or as a spur to the kinds of real changes that will finally end the exclusion of workers from benefiting from the wealth that is created and deciding how the economy should be organized?
*To be clear, Pew defines “middle-income” households as those with an income that is 67 percent to 200 percent (two-thirds to double) of the overall median household income, after incomes have been adjusted for household size. There’s nothing standard about that definition. Another possibility is to look at households making 50 percent higher and lower than the median, which would mean the average middle-class annual income is $30,000 and $80,000.
**This CBS Moneywatch [ht: ja] article on Pew’s study includes an online tool to see where you are in the distribution of Americans by income tier.