Some Middle-Class Facts

See Behind the Middle-Class Funk The recession hurt, but some troubles have been simmering for 40 years. By WILLIAM A. GALSTON, from today's WSJ. If you look at all the excerpts below, it seems to me that the middle-class is doing okay. Excerpts:

"Many economists define the middle class as those adults whose annual household income is between two-thirds and twice the national median—today, that means roughly $40,000 to $120,000."

"In 1971, it accounted for fully 61% of adults, compared with 14% for the upper class and 25% for the lower class."

"Four decades later, the middle class share had declined by 10 percentage points to just 51%, while the upper class share increased by six points and the lower class by four."

"During those 40 years, Pew calculates, the median income of middle-class households (adjusted for inflation) grew by 34%. The median grew for the others as well—by 43% for upper-income households and 29% for those with incomes below the middle class. This isn't surprising, because the median income for all U.S. households rose by 32% during that period, from $44,845 in 1970 to $59,127 in 2010. Indeed, 86% of middle-class Americans, and 84% of all Americans, enjoy higher incomes than their parents did."

"Pew uses a definition of income that excludes employer-provided health insurance, non-cash transfers such as food stamps and the redistributive effect of taxes. If these additional sources are included, the rate of increase in median household income between 1979 and 2007 is significantly higher. The increase looks substantially smaller if, as some economists suggest, we use the rate of medical-cost inflation rather than the consumer price index to determine the real value of employer-provided health insurance.

Another complication: Forty years ago, average household size was 3.2 persons. Today, it is only 2.5, a drop of 20%. Most analysts (including Pew's) adjust for this change, because a smaller number of persons per household means that income per person rises faster than the overall household income numbers would suggest. But some researchers disagree, on the ground that smaller households reflect, in part, lower birth rates, which are in turn influenced by gloomier economic realities and expectations."

"Between 1979 and 2007, on average, annual hours worked by middle-income households rose from 3,007 to 3,335—fully 10%, a larger increase than for any other income group. Some of the additional work reflects expanding opportunities for women. But much of it came in response to economic pressure and represents time that men as well as women reluctantly diverted from their children—hardly an unambiguous improvement in family well-being."