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How the American middle class has changed in the past five decades

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Summary

This article analyzes data from the Annual Social and Economic Supplements (ASEC) of the Current Population Survey (CPS) to study how the economic status of the American middle class has changed since 1971. Over the past five decades, the share of adults living in middle-class households has decreased from 61% in 1971 to 50% in 2021, while the share of adults in the upper-income tier has increased from 14% to 21%. Meanwhile, the median income of middle-class households has increased from $59,934 in 1970 to $90,131 in 2020, while the median income of upper-income households increased from $130,008 to $219,572. Other findings include that the share of aggregate U.S. household income held by the middle class has fallen steadily since 1970, and that older Americans and Black adults made the greatest progress up the income ladder from 1971 to 2021.

Q&As

What percentage of adults lived in middle-class households in 1971 and 2021?
61% of adults lived in middle-class households in 1971 and 50% in 2021.

How has the median income of middle-class households changed since 1970?
The median income of middle-class households in 2020 was 50% greater than in 1970 ($90,131 vs. $59,934), as measured in 2020 dollars.

What groups of adults made the most progress up the income ladder from 1971 to 2021?
Older Americans and Black adults made the greatest progress up the income ladder from 1971 to 2021.

What percentage of aggregate US household income is held by the middle class?
The share of aggregate U.S. household income held by the middle class has fallen steadily since 1970, from 62% in 1970 to 42% in 2020.

How has the economic status of Black and Hispanic adults compared to other groups since 1971?
Black and Hispanic adults are more likely to be in the lower-income tier than are White or Asian adults. Despite progress, Black and Hispanic adults trail behind other groups in their economic status.

AI Comments

👍 This article provides an in-depth analysis of how the American middle class has changed in the past five decades. The research and data provided is comprehensive and easy to understand, providing an understanding of how different demographic groups have been affected by these changes.

👎 This article fails to address how economic inequality has been impacted by the changes in the American middle class. It does not provide any solutions or ideas for how to address this growing issue.

AI Discussion

Me: It talks about how the American middle class has changed in the past five decades. It looks at how the income gap has broadened and how the middle class has shrunk, as well as the demographic groups that have experienced the most progress up the income ladder.

Friend: Wow, that's really interesting. What are the implications of this article?

Me: The article highlights how the income gap between the upper-income tier and other households has grown since 1970. It also shows how the share of aggregate U.S. household income held by the middle class has declined steadily since 1970. The article also shows that older Americans and Black adults have made the most progress up the income ladder since 1971, while those without a bachelor's degree have actually experienced a regression in terms of economic status. And finally, it shows that married adults and those in multi-earner households have fared much better economically than their single-earner counterparts. The implications of this article are that economic inequality is growing in America and that certain demographic groups are more likely to be affected by this inequality than others. It also serves as a reminder that education is key to improving one's economic status.

Action items

Research the impact of the coronavirus pandemic on the financial well-being of households in the lower-, middle- and upper-income tiers, with comparisons to the Great Recession era.
Analyze the data from the Annual Social and Economic Supplements (ASEC) of the Current Population Survey (CPS) to study how the economic status of the American middle class has changed since 1971.
Examine the movement of demographic groups in and out of the American middle class and across lower- and upper-income tiers from 1971 to 2021.

Technical terms

Middle Class: A socio-economic group of people whose income is between the lower and upper classes.
Upper-Income Tier: A socio-economic group of people whose income is higher than the middle class.
Lower-Income Tier: A socio-economic group of people whose income is lower than the middle class.
Current Population Survey (CPS): A survey conducted by the U.S. government to estimate monthly unemployment rates.
Annual Social and Economic Supplements (ASEC): A survey conducted by the U.S. government to estimate income and poverty.
Lost Decade: A period of economic stagnation in the U.S. from 2000 to 2010.
Labor Force Participation: The percentage of people in the labor force who are employed or actively looking for work.
Social Security Payments: Government benefits paid to retired or disabled individuals.
Multi-Earner Households: Households with more than one earner.
Bachelor’s Degree: A college degree awarded after four years of study.