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Economy
Juliana Kaplan and Madison Hoff
- The middle class is often a topic of discussion among politicians and economists.
- But who makes up the middle class? It's a group that's been shrinking over the decades.
- To be middle class as a single American, you have to make about $30,000 to $90,000.
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If you've listened to any politician — or just President Joe Biden's speeches — you've heard about the middle class.
Indeed, most Americans have said that they're part of the middle class. A 2018 Northwestern Mutual study of over 2,000 adults found that 68% of American adults considered themselves part of the middle class —but, as of 2018, just about 52% were middle-class, according to a Pew Research Center analysis of income trends.
So who is in the middle class? Broadly, Pew Research Center defines middle-class households as making two-thirds to double America's median income. That adds up to an income range of about $30,000 to $90,000 for single Americans in 2020 dollars. But there are other ways out there that the middle class could be defined, as seen in a Brookings analysis of 12 definitions — including Pew's.
Here's how the middle class has been faring in America.
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The typical middle-class American makes between about $30,000 to $90,000
A single American making $30,000 to roughly $90,000 every year is middle-income, according to Pew. A household of two would have to earn around $42,000 to $127,000 to qualify.
A little over half of Americans surveyed by Northwestern Mutual in 2018 said the range for being in the middle class were assets between $50,000 to $99,999.
"The average middle-class household has about $70,000 in income after taxes and transfers," a Brookings essay wrote. "To be middle class, a household of three would have an income between $40,000 and $154,000."
A three-person middle-income household makes about $52,000 to $156,000 every year according to Pew's definition.
A household of four would have to makes $60,000 to $180,000. Households of five making roughly between $67,000 to $201,000 are also considered part of the middle class.
Household income for the middle class has been on the rise over the last decade, although the pandemic still set them back. As seen in the above chart, the median household income for a middle-class household of three in 2020 dollars was $79,838 in 2010, according to Pew's analysis. By 2019, it had risen to $92,042 — and then fell to $90,131 in 2020.
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The middle class has been shrinking
According to a Pew Research Center analysis of the Census Bureau's Current Population Survey Annual Social and Economic Supplements, the share of adults living in a middle-class household shrank from 61% in 1971 to 50% in 2021.
"The widening of the income gap and the shrinking of the middle class has led to a steady decrease in the share of U.S. aggregate income held by middle-class households," authors of a Pew report wrote.
Incomes across all income levels have risen over the past five decades, but it hasn't been evenly distributed.
According to Pew, upper-income three-person households saw their incomes grow by 69% from 1970 to 2020. But middle-class households saw just 50% growth during that time.
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Men are more likely than women to be part of the middle-class — and white Americans were more likely to be middle-class than Black and Hispanic adults
According to Pew's analysis, 51% of adult men were middle-income in 2021, while 49% of women were. Women were more likely to be lower-income than men. However, a September 2020 report from the Brookings Institution found that the rise in middle-class income was because women were earning more.
And 52% of white adults were middle-income, compared to 47% of Black adults and 49% of Hispanic adults.
According to a Brookings report, 84% of the middle class was white in 1979, while just 9% was Black and 5% percent Hispanic. The middle class has since grown more diverse as has the US population; per Brookings, it was 59% white in 2019, and 12% Black and 18% Hispanic.
However, as of 2021, white adults were more likely to be upper-income than Black and Hispanic adults, according to Pew.
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The middle class held $39.25 trillion, just 27.6% of the country's wealth, in the last quarter of 2021
The Federal Reserve tracks how much wealth different groups in the US hold. According to Fed data, the group that makes up the 50% to 90% wealth percentile — which roughly encompasses the middle class — held 27.6% of all household wealth in the last quarter of 2021. That's about $39.25 trillion.
For comparison, the bottom 50% has just 2.6% of all wealth — and the top 1% holds about a third of the country's wealth.
As seen in the above chart, the level of household wealth of the 50% to 90% wealth percentile has climbed from $7.24 trillion in the third quarter of 1989.
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Most people in the middle class didn't see their finances get worse during the early pandemic
According to a January 2021 survey of US adults from Pew, roughly a third of middle-income respondents said that their and their family's financial circ*mstanceswere actually better than they were the year before. Almost half of middle-income respondents said their finances were about the same.
According to Federal Reserve Data, the 50%-90% percentile of Americans saw their collective wealth dip a bit in the first quarter of 2020 to about $31 trillion — but it grew in the second quarter, and has continued growing since. As of the fourth quarter of 2021, that group held about $39 trillion.
According to a recent Gallup survey, 39% of those considered middle income by Gallup — those with an annual household income of $40,000 to $99,999 — said their own financial situation is improving. Although that percentage is higher than those considered lower income, this is also a smaller share than in 2021 when 48% of middle income respondents reported this.
Middle- and lower-income Americans are also feeling the impact of rising prices and inflation on their wallets, according to a Gallup poll.
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The middle class has trillions in debt
In the US, the middle class is burdened with a whole lot of debt, and it's been growing.
At the end of 2021, the 50% to 90% percentile had $1.58 trillion in consumer credit debt, according to the Fed. That's a $100 billion surge from the year prior. They also took on about $300 billion more in home mortgages.
The above chart shows how that compares to the other percentiles in the last quarter of 2021.
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And, like many Americans, the middle class is grappling with the burden of student debt
As of 2019, the 40% to 59.9% percentile of Americans held a median $21,700 in education installment loans, according to Federal Reserve Data. The 60% to 79.9% group holds an even greater educational loan burden, with a median of $24,400. Meanwhile, the 80% to 89.9% cohort has a median $28,000 in educational installment loans. The top 10% holds just a little more in education installment loans than the 40% to 59.9% percentile.
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The US's shrinking middle class is small compared to other countries
The US's middle class pales in comparison to many of its peers.
According to a 2019 analysis from the OECD, the US's middle class is smaller than most fellow OECD countries. Across OECD countries, about 61% of the population is generally middle class — but the US's share came in at just 51% at the time of the OECD's analysis.
At 58%, neighboring country Canada had a higher share considered middle income compared to the US. The US'S other neighbor, Mexico, had a smaller share at 45%. OECD defined middle-income class as "households with income between 75% and 200% of the median national income."
However, as the analysis notes, the middle class has been shrinking worldwide — and the US has consistently had a smaller percentage of its population in the middle-class.
The US middle class is richer than many of their middle-class counterparts around the world, though. According to a 2021 analysis from Pew, the global middle class lives on $10.01 to $20 a day. For comparison, as Pew notes, the Census Bureau calculated the poverty line in 2020 for a family of four in the US at $15.90 a person daily, making them part of the global middle class.
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As the middle class shrinks, each new generation has been less likely to join it
"The middle-income class has grown smaller with each successive generation," the OECD wrote based on who were in middle class households when aged 20 to 30.
For Baby boomers, the share of the US population for people who were in their 20s and who were considered in middle-income households was 59%. That's a slightly higher share than the following Gen X and millennial generations, at 54% and 53% respectively.
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