The Curious Case Of America’s Shrinking Middle Class

You don’t have to scan too many news outlets these days to find some pessimistic outlooks regarding the U.S. economy. Inflation remains too high for comfort, economists are still wary of a looming recession, and the central bank seems to have put a hold on interest rate relief.

But these are (hopefully) short-term problems in the grand scheme of things. There’s a much longer-term trend that might be even more telling … and a recent report put things in perspective.

Waking up from the American Dream

Sure, most of us would love to receive a massive financial windfall. But if we’re being more realistic about things, most Americans are simply looking for a relatively secure, middle-class lifestyle.

For a few decades in the mid-20th century, this seemed like a fairly straightforward goal that a majority of households were able to achieve. But as new industries have emerged, old jobs disappeared, and the economy became more complex than ever, that middle class has continued to shrink.

The good, the bad, and the ugly

To be sure, America’s economic news isn’t all bad. In fact, the latest analysis shows that low-, middle-, and high-income Americans saw their inflation-adjusted incomes increase over the past 50+ years.

Of course, those in the upper echelon got a much bigger boost than those in the bottom two. Here’s how it breaks down:

• Upper-income salaries increased 78% between 1970 and 2022.
• The boost to middle-income salaries was 60% during the same years.
• For those earning the least, incomes increased by just 55%.

And the middle class has continued to shrink (from 61% in 1971 to 51% in 2023) as the other two segments grew. Of the 10 U.S. metro areas with the largest lower-income population, four are in Texas — including McAllen-Edinburg-Mission, which topped the list.

Chris Agee June 8th, 2024

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