The U.S. middle class is shrinking, according to a new study.
In the latter part of the last century, the majority of Americans were middle class. In general, that meant they had a comfortable standard of living and economic security.
Most Americans believe that growth of the middle class is synonymous with prosperity and an equalizing of opportunity. If more people are comfortable economically, then democracy is working.
“America does best when the middle class does better,” President Barack Obama said last March, “and when ordinary folks who maybe were born into poverty are able to climb their way into the middle class, that’s good for everybody.”
The American middle class has been mentioned constantly on the 2016 U.S. presidential campaign trail. Republicans argue that middle-income Americans are disappearing.
It turns out the middle class is contracting, according to the Pew Research Center.
Pew defines middle-income Americans as adults making about $42,000 to $126,000 annually for a household of three. There used to be more people in the middle class than in the upper and lower classes combined. In 1971, 61 percent of the population was middle class.
In its report, Pew said that only 50 percent of the U.S. population now falls in middle class category, down 11 percent. Of that 11 percent, 4 percent dropped into lower income classes but a notable 7 percent acceded to the upper classes.
Shrinking middle class
The American middle class did see growth in some areas. Its median income increased 34 percent since 1970. By comparison the upper class saw an increase of 47 percent.
But the new century has been damaging for middle-income Americans. In 2014, their median income was 4 percent less than in 2000. The housing market crisis and the Great Recession also affected their median wealth (assets minus debts) with a hit of 28 percent from 2001 to 2013.
The difference between middle and upper income households in the U.S. has increased exponentially in the last three to four decades, according to the Pew report.
Upper-income families owned 29 percent of the nation’s wealth in 1970. In 2014, they had 49 percent. By contrast, the amount of wealth held by middle-income households decreased from 62% in 1970 to 43 percent in 2014.
Here’s Republican candidate Senator Ted Cruz citing a different study last February: "The top 1 percent under President Obama, the millionaires and billionaires that he constantly demagogued, earned a higher share for our income than any year since 1928."
Then in a reference to the middle class, he added, "Hardworking men and women across America are hurting,"