The Great American Middle Class Squeeze

Is The US Middle Class Shrinking?

It is tough to determine if the middle class is shrinking. Why? Because it really is not clear what the US midde class actually is! You may be able to get some idea from this article: What Is Considered US Middle Class?

The notion about a shrinking American middle class is controversial because the term is not well defined. Or it may be well defined, but there is no agreement about what it means. But, according the the US Censue Bureau, a household income between $25,000 and $75,000 represents the middle distributions of American incomes. During the last 20 years, the number of households in that range shrank by almost 4%.

This is more alarming than it looks at first glance, in my opinion, because we have to remember that we have had inflation for most of that time.

But to be fair the number of people with higher incomes has increased more than the number of people who live in poverty. So does this mean that more people have simple moved up? Some of this may be because 2 income families are more common. If two income earners, who each earn $40,000, would be considered middle class, their marriage would create an $80,000 household which would take them up and out of the midle income distribution.

It is also tough to look at income amounts without taking inflation into income. A $60,000 salary 20 years ago may have provided a better living standard than a $100,000 income does today.