Why is it unprofitable for the USA to be middle class

According to the new Pew Research Center report, in 2016, just over half of adult Americans (52%) lived in middle-class families. In 2011, this figure was 51%. The change may seem insignificant, but in a sense it was a turn that deserves attention. Especially if one thinks that in 1971, 61% of adult Americans fell into the middle class category. Since then, the rate is slowly but surely falling.

Фото: Depositphotos

And although, judging by the figures, the middle class is now relatively stable, income inequality between classes has grown and continues to grow, notes USA Today. Adjusted for inflation, the average middle-class household earned more in 2016 ($78) than in 442 ($2010)—74 percent. High-income families increased their income by 015 percent over the same time, while low-income families increased their income by just 6 percent.

It is important to note: when Pew compares classes, it does not use only the standard set of fixed amounts. His formulas take into account the number of people in a family, the cost of living in each region, as well as the total household income. In the 2016 year, according to the center, the middle class is considered a family earning a year from 45 200 dollars to 135 600 dollars.

Stuck in the middle?

The number of adult Americans living in high-income households increased from 14% in 1971 to 19% 2016, while the percentage of low-income families rose from 25 to 29%. It turns out that over the past 50 years, the middle class has declined, while the upper and lower have grown about equally.

And less good news. These returns from 2010 to 2016 are largely an artifact of the Great Recession. In 2010, average household incomes adjusted for inflation were significantly lower than in 2000 due to the economic downturn, and when comparing the period from 2000 to 2016, it is clear that middle class incomes have remained almost unchanged. Low-income families are actually still 5% behind their average incomes in 2000.

Фото: Depositphotos

The top tier, by contrast, has increased income by about 2% since 2000—another point that points to the growing financial gap between the upper class and everyone else.

“Wealth disparities between high-income households and low- or moderate-income households were at their highest levels in 2016,” writes Pew's Rakesh Kochar. — While the wealth of high-income families has more than recovered from the losses experienced during the Great Recession, the wealth of low- and middle-income families in 2016 was comparable to 1989 levels. This means that even if the American middle class does not appear to be shrinking (for now), the number of such families continues to fall financially, reflecting the long-term rise in income inequality in the United States as a whole.”

Staying steady

The growing gap between high-income households and everyone else is of course a cause for concern. But it's encouraging to see that the middle class has stopped shrinking rapidly, and the share of American adults living in low-income households is also barely growing. There are, of course, still many families for whom a stable middle-class lifestyle remains an unattainable dream, but there is hope for improvement in the overall picture.

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