Economic Inequality and the Disappearance of the American Middle Class

The health of the middle class generally signals overall economic vitality. In the United States, the middle class has been decreasing for more than 40 years.

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At present, according to recent PEW Research findings, the number of Americans in the middle class constitutes 11% less than the number in the middle class in 1971.

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The shrinking of the American middle class means that the gap between rich and poor today may be more intractable than previously. As well, the numbers of Americans falling into the low-income category or living in poverty has increased from 16% to 20%. PEW finds that not all demographic categories suffer, however. This suggests that economic inequality unequally effects social groups and that American culture  economically favors some social groups over others.

The economic status of adults with a bachelor’s degree changed little from 1971 to 2015, meaning that similar shares of these adults were lower-, middle- or upper-income in those two years. Those without a bachelor’s degree tumbled down the income tiers, however. Among the various demographic groups examined, adults with no more than a high school diploma lost the most ground economically.

Winners also include married adults, especially couples where both work. On the flip side, being unmarried is associated with an economic loss. This coincides with a period in which marriage overall is on the decline but is increasingly linked to higher educational attainment.

Gains for women edged out gains for men, a reflection of their streaming into the labor force in greater numbers in the past four decades, their educational attainment rising faster than among men, and the narrowing of the gender wage gap.15

Among racial and ethnic groups, blacks and whites came out winners, but Hispanics slipped down the ladder. Although blacks advanced in income status, they are still more likely to be lower income and less likely to be upper income than whites or adults overall. For Hispanics, the overall loss in income status reflects the rising share of lower-earning immigrants in the adult population, from 29% in 1970 to 49% in 2015. Considered separately, both U.S.-born and foreign-born Hispanics edged up the economic tiers.

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