The middle class no longer dominates in the U.S.

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NEW YORK — 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.

*Scroll down for a calculator to determine where you stand financially

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.

1 Comment

  • Opinion8d

    My theory is that the middle class isn’t necessarily disappearing, but that the population on the lower end is exploding, and thus diluting what used to be the middle class. Many of those in the middle class or that move up and out of it, got en education, made prudent decisions, and planned their life. Those people are waiting to have kids and then when they do, they may only have a couple kids, thus providing a better opportunity for their family in the future. On the flip side, we have a large amount of people having kids in their late teens, then having more kids with multiple people. They are lucky to have a high school education and maybe some type of post schooling. They end up having 4-6 before they are even 30 with no means to support the kids. Then, those kids repeat the cycle, having more kids early in life. The result is that the lower class has almost 2 breeding cycles completed before others had their first kid. That cause the denominator of the equation to increase dramatically, thus diluting the actual middle class. And thanks to big govt, they contribute to this lifestyle.

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