The shrinking of America’s middle class has finally ground to a halt

While the lower and upper classes have increased in size over the past decade, the once-shrinking American middle class appears to holding ground.

Just over half (52%) of American adults lived in middle-class households in 2016, up slightly from 51% in 2011, but down from 54% in 2001 and 61% in 1971, according to recent data released by the Pew Research Center, a nonprofit think tank in Washington, D.C. The percentage of people in lower- and upper-income households has, meanwhile, crept higher over the same period.

“While the size of the nation’s middle class remained relatively stable, financial gains for middle-income Americans during this period were modest compared with those of higher-income households,” Pew senior researcher Rakesh Kochhar wrote.

‘The recent stability in the share of adults living in middle-income households marks a shift from a decades-long downward trend.’

Rakesh Kochhar, senior researcher at the Pew Research Center

“The recent stability in the share of adults living in middle-income households marks a shift from a decades-long downward trend,” he added. “From 1971 to 2011, the share of adults in the middle class fell by 10 percentage points. But that shift was not all down the economic ladder.”

Kochlar notes that the median income of middle-class households increased just 6% from $74,015 in 2010 to $78,442 in 2016, while the median income increased of upper-income households increased by 9% from $172,152 to $187,872 over the same period. Lower-income households increased their income by just 5% over the same decade from $24,448 to $25,624. Middle class households in particular have been hard hit by the loss of jobs outsourced overseas.

What’s more, people who probably don’t earn enough to be middle class consider themselves to be part of this group. Nearly half of Americans (49%) consider themselves middle class and only one-third of those that do are still satisfied with their financial situation, according to a survey of 2,000 people conducted by market-research group Mintel released last year.

“Americans want access to opportunities that improve the overall quality of their lives,” that study found. “This attitude might be related to income inequality, with people of average income levels feeling relatively unsatisfied with what they have compared to the top 1%.”

Don’t miss: This is how much S&P 500 CEOs received in pay increases last year

There is no universal definition of the middle class. The Pew Research Center often uses the middle wealth quintile, the middle 20% of Americans’ income and wealth. Other economists have said it’s defined as making 50% above or below the median annual income.

Most Americans regard a college education as a critical component to becoming middle class. Some 71% of people with a college degree consider themselves middle class versus just 58% of people with a high school diploma or less, according to a 2012 survey by Gallup. And yet college graduates in 2017 are shouldering $1.3 trillion in student debt.

Get a daily roundup of the top reads in personal finance delivered to your inbox. Subscribe to MarketWatch’s free Personal Finance Daily newsletter. Sign up here.

Filed in: Top News Tags: 

You might like:

Market Snapshot: Dow posts back-to-back records, books best weekly since July Market Snapshot: Dow posts back-to-back records, books best weekly since July
Tilray stock slammed as cannabis sector finishes turbulent week Tilray stock slammed as cannabis sector finishes turbulent week
Key Words: Anthony Bourdain in trailer for show’s final season: ‘I pinch myself’ Key Words: Anthony Bourdain in trailer for show’s final season: ‘I pinch myself’
Walmart letter warns tariffs will raise prices and tax American businesses Walmart letter warns tariffs will raise prices and tax American businesses
NewsWatch: Dow, S&P 500 records belie festering fear that China and the U.S. ‘are on a collision course’ NewsWatch: Dow, S&P 500 records belie festering fear that China and the U.S. ‘are on a collision course’
Outside the Box: It’s time for companies to end the obsession with millennials and hire older workers with skills and expertise Outside the Box: It’s time for companies to end the obsession with millennials and hire older workers with skills and expertise
The Ratings Game: iPhone lines were shorter this year, though that might not mean much for Apple The Ratings Game: iPhone lines were shorter this year, though that might not mean much for Apple
The Wall Street Journal: U.K.’s May says Brexit talks have reached ‘an impasse’ The Wall Street Journal: U.K.’s May says Brexit talks have reached ‘an impasse’

Leave a Reply

Submit Comment
© 2574 Stock Investors News. All rights reserved. XHTML / CSS Valid.