The story of middle-class America is one of the most belabored narratives in the election cycle. It’s also a story that’s thoroughly misunderstood, and often oversimplified to fit the messaging of a particular political campaign.
Almost every major politician running for president in the past year has deployed heated rhetoric in discussing the economic pressures facing the average middle-class household. We’re so often told how the middle class is shrinking that we simply take as an established fact the idea that life is getting harder for average Americans, regardless of the complexities of the data.
But in fact, the Census Bureau recently reported that 2015 was the best year of income growth in decades for all middle class Americans. And let’s not forget that when it comes to the entire world, a total of 88 percent of Americans are considered upper-middle-income or high-income earners.
It’s true that middle-income households — as defined in relative terms by the Census Bureau and the Federal Reserve* — have declined as a portion of the total population since 1971. This indicates a growing inequality between income groups. But in absolute terms, incomes have been rising for just about everyone, and in fact, the Urban Institute recently found that the “upper middle class” has actually gotten larger and richer than ever before. We can therefore say that a large part of the “shrinking” of the middle class actually has to do with some people becoming too rich to be considered middle income anymore.
So what’s the deal? If the middle class has gotten richer in the economic expansion spanning the past seven years, why are we so hung up on the shrinking of the middle class this (and seemingly every) election?
Part of the answer may be the perceptions of middle-class voters, who think they’re falling behind economically or simply not getting ahead relative to others. In 2014, the Pew Research Center found that over the course of our recovery from the housing crash, the portion of Americans identifying as “middle class” dropped from 53 percent in 2008 to 44 percent in 2014. Meanwhile, the number of people who thought of themselves as “lower class” jumped 15 percentage points.
It’s important here to note the distinction between “middle income” and “middle class.” While it’s simple enough to group people into economic segments based on their stated income each year, “class” is a far mushier term, encompassing many factors independent of pure income. Did you or your parents go to college? Does your family own a home? Do you have a job that’s considered white collar? All these questions considered, middle-class Americans in the Rust Belt states of the Midwest look totally different from the same segment on the more urban East Coast. It’s also a concept closely intertwined with race and ethnicity in areas that are still heavily segregated.
Looking back at history, the middle-class lifestyle was symbolized by the consumerism of the ’50s and ’60s. Living the “American Dream” meant living in your own home with a backyard, probably in one of the sprawling suburbs buoyed economically by manufacturing jobs. And attached to this world was an increased likelihood of buying a car or two, sending the kids off to college and having a fairly secure retirement.
But of course, the economy has changed. Low-skill manufacturing jobs have largely gone elsewhere or have been replaced by technology. Higher education is increasingly expensive and saddles students with enormous debt. And retirement plans took a massive hit during the economic crisis, even as the super-rich have become even richer.
In the midst of all of of these changes, it’s possible that the economic measurements gauging our country’s middle class are simply outdated. Maybe income no longer captures the essence of what we now think of as the “American Dream.” If that’s the case, what should define a middle-class lifestyle? Employment? Education? Values? How have these characteristics evolved? And how has this evolution affected the role that class plays in our political and social spheres?
Over the next few days, we’ll hear from: