While share of people in the middle income dropped 9 points, their share of aggregate income dropped 20 points, conversely, the number of people in the high income group has increased by 7 points, their share of aggregate income has increased by 21 points. So while there is some growth in the total of high income earners, their aggregate income grew disproportionately while the middle income group’s fell disproportionately. Therefore, this proves that the squeeze felt by middle income earners is very much real.
EDIT: i seem to have been referencing a moderator’s post, and not the actual article itself. Sorry for the confusion. I think proportion of wealth and how it is distributed is still an important to understand this topic.
It doesn’t look like you’re referencing the linked article
“By our definitions, using contemporary benchmarks, 36 percent of American families composed the core middle class in 1979, while just over half (54 percent) fell short of core middle-class status and only 11 percent received income that placed them above the core middle class. By 2024, the core middle class had indeed shrunk—to 31 percent of American families. But the better-off set had tripled in size, while the worse-off group had shrunk dramatically. For the first time in American history, more families in 2024 were above the core middle class threshold (35 percent) than below it (34 percent). If we combine the lower-, core, and upper-middle classes, their share of families has risen from 70 percent to 78 percent since 1979.”
Sorry, you are correct. I was referring to the graph shared by another poster from forbes, indicating that while high income earners have grown, their wealth has grown disproportionately.
It shows that larger amounts of income is being concentrated in the wealthy, while the share wealth by other groups has proportionally dropped. This increase of wealth stratification has historically been associated with reduced social mobility, slower economic growth, tendencies towards undemocratic power structures, worse population and social outcomes and societal fragmentation.
So… the size of the low income people has increase by 16% (29/25), and the aggregate income of this group has dropped by 20%. Combining these, the relative income in the hands of the low income has gone backwards by more than 30%.
Meanwhile, for middle income americans, the size of the group is down by 19% (50/61), while their share of income is down by much more, by 33% (42/62). It doesn’t take Einstein to see that when you combine these facts, this group have gone significantly backwards in relative terms as well.
So life is relatively worse for 79% of Americans in this picture. It is delusional to call this a good news story, as the richest 21% have doubled their share of income.
This is pure propaganda from the American Enterprise Institute, desperately trying to spin a dire picture of widening inequality. If you want to understand why there is a spiral of lack of faith in institutions, and an increased ability of politicians to mobilize economic insecurity into fear and hate, look no further than these numbers.
While the median household earns about 13% more in real terms than the same median household in 1990, this hasn’t translated into a higher standard of living, simply because costs have risen faster than wages. So you can get a very specific slice of the economy like this abd show line goes up. But relative to costs, the line is not really going up much. With housing costs at 40% greater, college 30% greater, and healthcare wildly more expensive since the 90s.
The AEI’s analysis is measuring whether someone can general consumer goods (TVs, clothes, food, appliances). Those have gotten cheaper or held steady relative to wages.
BUT the traditional middleclass family life (homeownership, raising children, healthcare security, college for your kids) have increased in cost sharply from general CPI.
So yeah- just living life and being a general consumer. Not so bad. Want a family, house, good education to support that family, and health care and child care for your kids? Way more expensive now. So if you’re upper middle class, you’re paying the bills to raise a family and not thriving. And if you’re middle class, compared to your general consumer people living without kids in an apartment, you’re legit struggling.
This is all addressed in the article and they obviously account for cost of living and inflation. Middle class still shrinks and “upper” class still grows.
So today’s median household earns about 13% more in real terms than the same median household in 1990. But this hasn’t translated into a higher standard of living, simply because costs have risen faster than wages. So you can get a very specific slice of the economy like this and show “line go up”. But relative to costs, line not go up so much. With housing costs at 40% greater, college 30% greater, and healthcare wildly more expensive.
This is where the anger in the comments is coming from.
I feel a lot of these studies make the mistake of using old metrics.
We use the guideline for nonfarm families of three in the 48 contiguous United States, which was $26,650.
So a non-farm family of three making $30k/year is above the poverty line? This metric was created in the 1950s and is completely out of touch with how people live their lives and have to spend their money.
This article seems to be deliberately misleading, and I believe you can see it in, and what is conveniently left out of, this chart from the article. We see only 3 of the 5 fifths. What does the 2nd fifth or 4th fifth show? If I had to guess, it would show similar to the middle aka 3rd fifth - a decline in overall share of income received. So this supports the K-Shaped economy theory - where only the top 20% are seeing economic growth, while 80% of the US population is having a tough time.
This is coming from someone whose HHI and net worth put me squarely the top 20th percentile and on the upper line of the K in the K-Shaped economy. However, I'm doing my best not to let any bias from my own luck cloud my understanding of the data and the reality. While I'm still optimistic for the future, I don't believe this article is a source for optimism.
While share of people in the middle income dropped 9 points, their share of aggregate income dropped 20 points, conversely, the number of people in the high income group has increased by 7 points, their share of aggregate income has increased by 21 points. So while there is some growth in the total of high income earners, their aggregate income grew disproportionately while the middle income group’s fell disproportionately. Therefore, this proves that the squeeze felt by middle income earners is very much real. EDIT: i seem to have been referencing a moderator’s post, and not the actual article itself. Sorry for the confusion. I think proportion of wealth and how it is distributed is still an important to understand this topic.
It doesn’t look like you’re referencing the linked article
“By our definitions, using contemporary benchmarks, 36 percent of American families composed the core middle class in 1979, while just over half (54 percent) fell short of core middle-class status and only 11 percent received income that placed them above the core middle class. By 2024, the core middle class had indeed shrunk—to 31 percent of American families. But the better-off set had tripled in size, while the worse-off group had shrunk dramatically. For the first time in American history, more families in 2024 were above the core middle class threshold (35 percent) than below it (34 percent). If we combine the lower-, core, and upper-middle classes, their share of families has risen from 70 percent to 78 percent since 1979.”
Sorry, you are correct. I was referring to the graph shared by another poster from forbes, indicating that while high income earners have grown, their wealth has grown disproportionately.
wtf does “share of aggregate income” have to do with anything. It’s not like rich people are causing a shortage or rice and beans or basic needs?
It shows that larger amounts of income is being concentrated in the wealthy, while the share wealth by other groups has proportionally dropped. This increase of wealth stratification has historically been associated with reduced social mobility, slower economic growth, tendencies towards undemocratic power structures, worse population and social outcomes and societal fragmentation.
Isn't this article about literal social mobility?
https://preview.redd.it/2759k28j0zcg1.png?width=703&format=png&auto=webp&s=9c530fbceb5310715f97f5c13feffbe51b0331e1
So… the size of the low income people has increase by 16% (29/25), and the aggregate income of this group has dropped by 20%. Combining these, the relative income in the hands of the low income has gone backwards by more than 30%.
Meanwhile, for middle income americans, the size of the group is down by 19% (50/61), while their share of income is down by much more, by 33% (42/62). It doesn’t take Einstein to see that when you combine these facts, this group have gone significantly backwards in relative terms as well.
So life is relatively worse for 79% of Americans in this picture. It is delusional to call this a good news story, as the richest 21% have doubled their share of income.
This is pure propaganda from the American Enterprise Institute, desperately trying to spin a dire picture of widening inequality. If you want to understand why there is a spiral of lack of faith in institutions, and an increased ability of politicians to mobilize economic insecurity into fear and hate, look no further than these numbers.
The chart above is from Pew, and is addressed in the article
Shouldn’t median income be the middle third (the median income being the precise middle)?
This is addressed in the article, and is a quirk of how Pew defines middle class
While the median household earns about 13% more in real terms than the same median household in 1990, this hasn’t translated into a higher standard of living, simply because costs have risen faster than wages. So you can get a very specific slice of the economy like this abd show line goes up. But relative to costs, the line is not really going up much. With housing costs at 40% greater, college 30% greater, and healthcare wildly more expensive since the 90s.
The AEI’s analysis is measuring whether someone can general consumer goods (TVs, clothes, food, appliances). Those have gotten cheaper or held steady relative to wages.
BUT the traditional middleclass family life (homeownership, raising children, healthcare security, college for your kids) have increased in cost sharply from general CPI.
So yeah- just living life and being a general consumer. Not so bad. Want a family, house, good education to support that family, and health care and child care for your kids? Way more expensive now. So if you’re upper middle class, you’re paying the bills to raise a family and not thriving. And if you’re middle class, compared to your general consumer people living without kids in an apartment, you’re legit struggling.
This is all addressed in the article and they obviously account for cost of living and inflation. Middle class still shrinks and “upper” class still grows.
It looks like a lot of people didn’t even look at it
Average vs Median error. Look it up.
Edit: in addition, look at share of people on the low income group. It’s increasing!
What’s that have to do with this article?
[deleted]
I already know what it is. It doesn’t seem to bear relevance to the article, but a misreading of the headline.
Upper middle class share of population way up, lower class share of population way down. Pretty good news.
You can tell it’s legitimately good news because of all the angry pessimists
So today’s median household earns about 13% more in real terms than the same median household in 1990. But this hasn’t translated into a higher standard of living, simply because costs have risen faster than wages. So you can get a very specific slice of the economy like this and show “line go up”. But relative to costs, line not go up so much. With housing costs at 40% greater, college 30% greater, and healthcare wildly more expensive.
This is where the anger in the comments is coming from.
I feel a lot of these studies make the mistake of using old metrics.
So a non-farm family of three making $30k/year is above the poverty line? This metric was created in the 1950s and is completely out of touch with how people live their lives and have to spend their money.
In this context it doesn’t matter where you draw the line so long as you keep it consistent.
This article seems to be deliberately misleading, and I believe you can see it in, and what is conveniently left out of, this chart from the article. We see only 3 of the 5 fifths. What does the 2nd fifth or 4th fifth show? If I had to guess, it would show similar to the middle aka 3rd fifth - a decline in overall share of income received. So this supports the K-Shaped economy theory - where only the top 20% are seeing economic growth, while 80% of the US population is having a tough time.
This is coming from someone whose HHI and net worth put me squarely the top 20th percentile and on the upper line of the K in the K-Shaped economy. However, I'm doing my best not to let any bias from my own luck cloud my understanding of the data and the reality. While I'm still optimistic for the future, I don't believe this article is a source for optimism.
https://preview.redd.it/e1t4t3ap00dg1.png?width=1333&format=png&auto=webp&s=997bc0e7482ef9d7e9b8ef41d66c60ea3d59115d
Yea no
I think my paper wealth is maybe creeping into upper, but my daily cash flow doesnt feel like it
Kids will do that