Tanvi Misra is a staff writer for CityLab covering immigrant communities, housing, economic inequality, and culture. She also authors Navigator, a weekly newsletter for urban explorers (subscribe here). Her work also appears in The Atlantic, NPR, and BBC.
It’s now smaller than the upper and lower economic tiers combined, a Pew study finds.
America’s middle class has been steadily shrinking since 1971, and now this segment of the U.S. population is around the same size as the layers above and below it combined, a new analysis by Pew Research Center finds. It’s “a demographic shift that could signal a tipping point,” Pew says.
In 2015, middle-income Americans (adults in a three-person household with annual income between $42,000 and $126,000) made up about half of the U.S. population, down steadily from 61 percent since 1971. In absolute numbers, this middle-income band now contains around 120 million people, which is almost the same as the total number of Americans in the other economic tiers combined (121 million).
Presidential candidates from both parties have decried this trend as a significant economic strain on the country—and they’re right. The bands at the two extremes are growing the fastest, indicating a widening income inequality. The share of Americans in the lowest-income segment has grown from 16 percent in 1971 to 20 percent in 2015; the richest segment, meanwhile, has more than doubled from 4 percent of the U.S. population to 9 percent over that period. The upper-middle and lower-middle classes have remained steady.
The uppermost tier is also getting a larger slice of the proverbial pie than it was before, both because it now contains more people and because these people are rapidly making more and more. In 2014, almost half the total income in the U.S. went to this relatively small share of the population, compared to 29 percent in 1970.
It’s not all bad news. While the middle class has been languishing in the last decade because of the recession, its income has grown overall since 1971—by 34 percent. This is less growth than the 47 percent increase in upper-tier household income during that period, but more growth than the 28 percent increase rise for lower-income households.
The fact that the upper tier grew the most signals “economic progress,” Pew says. It means that Americans who were previously in the lower income tiers may have advanced up. The likelihood of economic mobility, however, varies greatly by demographic group. Black Americans, for example, still remain more likely to be in the lower income band than Americans overall, even though they’re better off than they were 40 years ago.
Which way the middle class tips—more contraction, or new growth—will depend in large part on the economic policies of the next administration. If you want to see where you fit in right now, check out this Pew income calculator.