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Thursday, December 10, 2015

Falling Down, Coming Apart

Grim news from Pew Research:
After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it. In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data.1
In at least one sense, the shift represents economic progress: While the share of U.S. adults living in both upper- and lower-income households rose alongside the declining share in the middle from 1971 to 2015, the share in the upper-income tier grew more.
Over the same period, however, the nation’s aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top. Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.2
And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.
Dan Walters reports at The Sacramento Bee:
Californians have both above-average poverty levels and above-average median family incomes, according to a new Census Bureau report.
The bureau fixed California’s official poverty rate in 2014 at 16.4 percent, representing 6.25 million residents of the state and nearly a full percentage point higher than the national rate of 15.5 percent.
Fourteen states had rates higher than California’s, topped by Mississippi’s 21.9 percent, while New Hampshire was the lowest at 9.2 percent.
However, the official poverty rate calculated for the report used a half-century-old method that makes no allowance for regional differences in either incomes or living costs. The bureau has developed a “supplemental measure” that takes those and other factors into account and by that method, California’s poverty rate is the nation’s highest at 24.3 percent, largely due to its extraordinarily high housing costs.
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