Many posts have discussed economic and educational inequality.
Stephen J. Rose and Scott Winship at AEI:
Abstract:
Populists on both the political left and right routinely claim that the middle class has been hollowed out. These claims, to the extent they are based on evidence, rely on a relative definition of the middle class, such that if income doubles for every family, the middle class does not grow. Using an absolute definition of the middle class, we find that the “core” middle class has shrunk, but only because more families have become upper-middle class over time. The upper-middle class boomed from 10 percent of families in 1979 to 31 percent in 2024, and its share of income doubled. The share of families whose income left them short of the core middle class fell from 54 percent to 35 percent. Claims of a hollowed-out middle class wrongly reinterpret widespread (if unequal) gains across the income distribution as rising insecurity and declining living standards.
From the article:
We create five income classes, depending on how families’ inflation- and size-adjusted incomes compare with the poverty guideline: poor or near poor (less than 150 percent of the poverty guideline), lower-middle class (150 percent to under 250 percent), core middle class (250 percent to under 500 percent), upper-middle class (500 percent to under 1,500 percent), and rich (1,500 percent or higher). These thresholds were selected building on past research by one of us (Rose 2010, 2016, 2021). We report results using different thresholds as a sensitivity check below.
Table B1 displays the unadjusted family income ranges corresponding to each income class for families of different sizes. For a family of three, the thresholds dividing the five classes are, roughly, $40,000, $67,000, $133,000, and $400,000 (in 2024 dollars).
