The shrinking middle class
Date posted: August 12, 2013
The middle class has always dominated the United States. N.C. State University economist Mike Walden considers what the statistics show on the relative size of the middle class over time.
“Before we even try to answer this question, you have to answer, ‘Well, what is middle class?’ And there is no specific standard totally accepted definition. Now what I’m going to quote from is a new study that looked at this issue. This study defined middle class as a family making between $25,000 and $75,000 in today’s dollars. So, when the researchers went back in time, they adjusted past dollars, so that again we’re talking about a range of $25,000 to $75,000 as middle class.
“Now if you use that definition and you go back to 1967, 62 percent of all families fell in that definition of a middle class. Fast forward to 2009, (the) last year that we have full data (for), that had dropped to 43 percent. So, by this definition, clearly those folks in the middle class, the number of those folks has shrunk.
“Now the question is, Where are they gone? Have they gone down or up? Well again, the data that we can look at and what the researchers found is those families earning more than 75 percent, the percentage of all families in that category actually went up from 16 percent in 1967 to 39 percent today. Those families who are earning under $25,000 in terms of their percentage of all families stayed relatively the same, about 22 percent in 1967 to 18 percent today.
“So, the bottom line here, yes the middle class has shrunk. But over a long period of time, it looks as if more of those folks who used to be in the middle class have fortunately moved up the income ladder.”
Category: Economic Perspective