For the first time in over four decades, the number of middle class Americans is now smaller than the number of those Americans who are classified as either rich or poor. The middle class, the country’s one-time economic majority, is shrinking–fast. The country gets more than 70% of its economy from consumer spending.
According to a recent report that looked at income data from 1971 and 2015, the US middle class is no longer the majority. In fact, the US middle class is now smaller than the combined number of rich and poor, Profitconfidential reported. (Source: “The American Middle Class is Losing Ground,” PEW Social Trends web site, December 9, 2015.)
Earlier this year, 120.8 million American adults were in middle-income households. This compares with 121.3 million in lower- and upper-income households combined, a major demographic shift that could have major economic implications.
“Middle class” is defined as any three-person household that earned between two-thirds and double the median level. In 2015, a middle-class household would be one that earned between $42,000 and $126,000.
So, under this spectacularly wide definition, the middle class is made up of slightly less than 50% of the US adult population. In 1971, the middle-class made up 61% of the US population.
The US middle class, the backbone of the world’s biggest economy, is getting smaller and smaller. This is, of course, in spite of the improving US economy and miracle bull run that seems to keep on going. Or maybe it’s because of the Federal Reserve and its artificially low-interest-rate environment that has helped widen the gulf between the haves and have-nots.
