Charts of the day: Another look at how America’s middle class is disappearing into higher income households

From Mark Perry.

"Here’s another look in the two charts above [below] showing how America’s lower-income and middle-income households have declined as a share of all US households between 1967 and 2014, while the share of high-income households keeps increasing."

  



1. The top chart shows the three income groups: a) low-income households with income of $35,000 and below (in 2014 dollars), whose share of US households declined from by five percentage points from 38.7% in 1967 to 33.7% (in 2014 dollars), b) middle-income households with income between $35,000 and $100,000 (in 2014 dollars), whose share of all households declined by 11.6 percentage points from 53.2% to 41.6% between 1967 and 2014, and c) high-income households with income of $100,000 and above (in 2014 dollars) whose share increased by a factor of more than three times (and by 16.6 percentage points), from 8.1% in 1967 to 24.7% in 2014.

2. The bottom chart shows the three income groups: a) low-income households with income of $50,000 and below (in 2014 dollars), whose share of US households declined from by 11.4 percentage points from 58.2% in 1967 to 46.8% in 2014, b) middle-income households with income between $50,000 and $100,000 (in 2014 dollars), whose share of all households declined by 5.2 percentage points from 33.7% to 28.5% between 1967 and 2014, and c) high-income households with income of $100,000 and above (in 2014 dollars) whose share increased by a factor of more than three times (and by 16.6 percentage points), from 8.1% in 1967 to 24.7% in 2014 (same as before for this income category).

Bottom Line: Over the last nearly 50 years the biggest gain for US households has been the 16.6 percentage point increase in the share of high-income households earning $100,000 or more per year, which accounts for the declining share of low-income and middle-income households (by two different measures). Yes, the middle-class has been disappearing over the last generation or more, but they have moved into higher-income categories of household income, not moving down into lower-income categories of household income.

Special thanks to Tom Sullivan for research help with this post."