Research shows that ranks of higher earners have grown markedly over last 50 years, while lower rungs of middle class have shrunk
By Rachel Louise Ensign of The WSJ. Excerpts:
"America’s middle class is becoming wealthier as more families scale the economic ladder into higher-earning groups. New research shows that the ranks of the affluent have grown markedly over the last 50 years or so, while the lower rungs of the middle class have shrunk."
"In 2024, about 31% of Americans were part of the upper middle class, up from about 10% in 1979"
"There is no single, standard definition of middle class, or upper middle class, and what counts as a hefty income in one city can feel paltry in another. The AEI report, by Stephen Rose and Scott Winship, classified a family of three earning $133,000 to $400,000 in 2024 dollars as upper middle class. Households earning more were categorized as rich. The analysis looked just at incomes, not assets such as stocks or real estate."
"The AEI report divided families into five different groups by income. Three groups were in the middle: lower middle class, core middle class and upper middle class.
The authors found that more families now fall into the two highest-earning groups—upper middle class and rich—and fewer fall into the three lower-earning categories.
In 2024, about 19% of American families were considered “poor or near poor,” according to the AEI report, down from about 30% in 1979. The report defined that group as a family of three earning about $40,000 or less in 2024 dollars."
"The economists considered a family earning between five times and 15 times the poverty guideline to be in the upper middle class—thus their parameters of $133,000 to $400,000."
"Upper-income groups are swelling because wages have grown faster than prices over time"
"More than 80% of people in the upper middle class and rich categories were in married or cohabitating households"
"A Pew Research Center analysis using a different methodology also discovered that the share of American families in the higher-income group is growing. The analysis found that in 2023, 19% of Americans fell into an “upper income” group, up from 11% in 1971.
"Pew classified upper income as those earning more than twice the median household income, so more than roughly $200,000 or more for a family of three in 2024."
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Related posts:
Wealth And The Middle Class (2019) "Counting all kinds of debt, including mortgages, consumers aren’t nearly as debt-burdened as they once were."
The American middle class is shrinking because more people are becoming upper middle class and rich (2016)
