In 1971, 61% of U.S. households earned the "middle-tier" of income - i.e., between two-thirds and 2X the median income. By 2015, only 50% were in the middle-tier.
And the middle class is not just smaller, its fortunes have also dwindled in comparison to the upper class. U.S. median household income (adjusted for inflation) is essentially unmoved since the late 1990s, while average home prices have continued to rise. Between 1974 and 2017, workers' share of the national income fell from 64.5% to 56.8%. Between 1979 and 2016, the top quintile of wage earners enjoyed a 27.4% increase in real wages, compared to 3.41% for the middle quintile. Between 1956 and 2016, union membership dropped from 28% of all workers to 10%. And between 2000 and 2019, the labor force participation rate dropped from 67.3% to 62.9%.
The middle class is getting sucked dry.
In fact, the whole notion of a shrinking middle class is a myth. Here's why.
When you compare household incomes over time, you have to look at identical households. The census defines a household as one or more persons living in the same abode. Fifty years ago, only 15% of all U.S. households had a single occupant. By 2017 that percentage had nearly doubled, to 28% percent. In just the last 10 years, the percentage has increased by three points. So, the typical household today is much smaller.
Sobotka at the Docks