Is The Middle Class Shrinking? Actually It Shows Both Growth And To Be Loosing Ground

If you look at statistics, for the most part the middle class in America is not shrinking, but it is changing (some for the worst and some for the better). Surprisingly the SIZE and WEALTH of the middle class are shrinking, but INCOME and BUYING POWER is growing. This article explains to you what is going on with America’s middle class and answers the question, “is the middle class shrinking?”.

The Challenges with Middle Class Statistics Measurements.

Surprisingly, experts have challenges measuring the U.S. population’s income. This is primarily because the “middle class” demographics are changing in terms of the size of American households, multiple earners, price changes across different spending categories, and income inequality changes. So to best understand the question of “Is the Middle Class Shrinking“, we need to understand how the Middle Class and its income can be measured. To detail, below are examples of how different statisticians measure the middle class resulting in different answers to whether the “Middle Class is Shrinking” question.

Is The Size Of The Middle Household Income Bracket Shrinking? – YES.

If you measure by household income brackets, the American middle class is shrinking. For instance, Pew Research shows that “… middle-income households has decreased from 61% in 1971 to 51% in 2019“. Now, the good news is that “…the upper-income tier increased from 14% to 20%”. On the other hand, the bad news is the “… the share in lower-income tier increased from 25% to 29%”.  Further, this way of measuring the middle class also provides “proof” that the middle class is “moving up” or “proof” that the middle class is “slipping into poverty“.

Is The Middle Class Individual Income Shrinking? – NO.

If you measure by individual income versus household income, the middle class is doing good. However, the challenge with measuring “Middle Class Household Income” is that the American household is changing. For example, the LA Times’ Op-Ed: The myth of the shrinking middle class cites statistics that “… Fifty years ago, only 15% of all U.S. households had a single occupant. By 2017 that percentage had nearly doubled, to 28% percent”. 

Is The Middle Class Real Median Income Shrinking? – NO.

Examples Of The American Dream – Something Uplifting, Materialistic, Unreachable?

If you measure real median income, the middle class is not doing well. For example, Federal Reserve Bank of Cleveland finds that “… today’s middle class are somewhat higher than they used to be, for households headed by two adults”.

Is The Middle Class Buying Power Shrinking? – NO.

If you measure by buying power, the middle class is doing good. For example, the Federal Reserve Bank of Cleveland states that “… prices in housing, healthcare, and education have risen more than middle-class incomes … that … are offset by relative price decreases in transportation, food, and recreation …“.

Is The Middle Class Wealth Shrinking? – YES.

If you measure the medium wealth per middle-income families, the American middle class is shrinking. For instance, Pew Research shows that “… middle-income families saw their median net worth shrink by 20% … between 2001 and 2016”.

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