Yes the Middle Class is Shrinking. And the Ranks of the Poor Are Shrinking. Because Americans are Getting Wealthier

Mark Perry has a number of good graphs that show that the shrinking of the middle class is real, but only because they are moving to "rich" -- hardly the implication of those on the Left who are trying to demagogue the issue.  Check them out if you have not seen them but this animated graph was new to me:


Note the general movement to the right.

Interestingly, the only block on the low side getting larger is the percent of people at "zero".    In my mind, this just reinforces my point that the poverty issue is primarily one of having a job, not the rate paid at the job.  For that growing cohort at zero, raising the minimum wage only makes it more likely they stay at zero.


  1. Daniel:

    I'm confused - are these $ in real terms? How do these graphs show anything for sure but inflation?

  2. Peabody:

    As quoted from the label on the top of the chart: "Household income in 2014 dollars (% of adults)"

  3. LoneSnark:

    The numbers were adjusted for inflation into 2014 dollars.

  4. DaveK:

    And what would the curve look like if you included government transfer payments (welfare, refundable tax credits, etc.)? Those don't usually count when they total up income, but they sure allow a lifestyle that greatly exceeds what could be supported by the official income figures.

  5. Mercury:

    99 out of 100 people will tell you the big story here is the skyrocketing of the $200k+ bar on the right.

    Also, all income stats are essentially meaningless without some context of what, say, a $70k income can actually buy. "Adjusted for inflation" likely includes a lot of things you don't care about and excludes a lot of things you worry about not being able to afford.

    If you aspire to sitting on the sofa by yourself and watching a big TV with a full belly, it's a great time to be alive. If you think this kind of thing is a step backward for the American Experiment you're probably also waving a sign for Trump or Sanders and fall into the 49% - 99% range on the above chart.

  6. Dmon:

    How many incomes made up a household in 1971 compared to today?

  7. Mercury:

    That's called 'liberation' son.

    Although, I bet a huge part of that spike in $200k+ incomes is due to the expansion of professional, dual-income households.

  8. marque2:

    Actually if you looked at all of Mark Perry's slides you would see an uptick in poor and a flatline in wealthy over the past few years. It is nice to know we are wealthier than in the 1700's or the 1970's, but really are perceptions are from the last years and also since the management of the last ten years has to due current trends we should focus on those rather than ancient history. Take a look at the less cute non animated slides and it looks like the rich are stable and the poor are rising and the adjusted middle class is most definitely shrinking.

  9. Zachriel:

    Both the upper and lower income groups are growing per Pew:

    That means there's a hollowing out of the middle. That results in less income mobility, and the resulting social friction.