14 December 2015

The Middle Class Isn't Disappearing. They're Becoming More Affluent.

The most absurd claims are being made about the above graph, made from census data found here. Simply put, people are claiming that this is further evidence that the middle class is disappearing. It's not.

What this data actually shows is that the middle class is getting richer. A lot richer. 

This data goes back to 1967 and it clearly shows two things: more people are rich and fewer people are poor.

The percentage of households making more than $100,000 a year has tripled. Tripled. (And yes. All of this data is inflation adjusted.)  In 1967, only 8.1% of households had incomes over $100,000 a year. By 2014, another 16.6% of the population had joined them, bringing their total to 24.7%.

The percentage of households making less than $50,000 has dropped from over half to well under half, from 58.2% of the population to only 46.8%, a drop of 11.4%. That, too, is progress.

Finally, the percentage of households making $50,000 to $100,000 has also dropped, from 33.7% to 28.5%. That 5.2% of households joined the folks making more than $100,000, not the ones making less than $50,000. 

You can see in the above graph what's happened in the last half century. This graph focuses on cumulative change over time. 

The orange line - households making more than $100,000 a year - rose to include 16.6% more households than it did at the start. (And just before the Great Recession, it was up to 17.2% more.) 

The blue line - households making less than $50,000 a year - dropped by 11.4%. 

During that time, median household income rose from $44,284 to $53,657 and average income rose from $49,529 to $75.738 a year, increases of 20% and 50%. This even when the size of the average household has dropped by more than 12%. (From 1975 to 2014, household size has dropped from 2.89 persons per household to 2.54.)

I'm not sure how you misconstrue this sort of data into proof that things are getting worse but of course pundits on the right and left have done just that. I'm beginning to believe that there is no such thing as good news when your career depends on alarming the polity.

No comments: