exc-5669b46f25981d26f7d64423
Back on December 9th Pew Research released a new report on the status of the Middle Class in the United States, something that’s a pretty big topic in the US presidential debate.
The headline: “The American Middle Class is Losing Ground.” Sounds pretty grim.
We noticed something curious on that day in our news feeds as a whole lot of different news sources syndicated the report. As is sometimes the case, we saw a few contradictory-sounding headlines:
The Sacramento Bee: “US middle-class families are no longer in the majority.”
Daily Caller: “New Report Shows the Middle Class is Collapsing, But for the Best Possible Reason.”
Washington Examiner: “Middle ‘CRASH.'”
National Review: “Being a Member of the ‘Hollowed Out’ Middle Class Never Felt So Good.”
And just to add to the confusion, a Pew article from February: “America’s ‘middle’ holds its ground after the Great Recession.”
As is often the case, we see that we can often take data and twist it to say whatever we want, or (more innocently) whatever our brains first process it as when we apply our own biased filters.
So as a classic exercise, let’s work through what’s really going on.
As we know by now, we have to be very careful of vague definitions. First, how do we define “middle class?” In this case, it can’t be a matter of “the middle 50%” or some similar measure (as some are), because its size wouldn’t change. The fact that we have headlines like “middle class no longer in the majority” exist means we have a size-flexible definition here.
Some definitions could define the middle class as having a certain standard of living–perhaps “can buy A, B, C for a family of 4, but not X, Y, Z.”
Others could tie the definition to some mathematical average, like +/- 25% from the median or mean income.
Pew’s definition of the middle class is those who are between two-thirds of the median income and double the median income.
Already we can see this getting somewhat complicated. To get an intuitive sense of Pew’s definition requires being able to visualize some statistics. But we must also note that it’s not an authoritative definition. Different definitions of the “middle class” will show different trends over time.
So the middle class, by Pew’s definition, is shrinking. Let’s see what that means.
So we see that over the past 44 years, 11% fewer households are in the middle class. Of those, 7% have moved into the upper class, and 4% have moved into the lower class.
Worth considering whether this is a “good thing” or not. Would it be better if the 1971 distribution stayed the same? Consider what might make you answer one way or other other.
Without other data, it doesn’t mean a whole lot. It could be the case that the average national income is the same, but it’s just shifted. It could be the case that everyone’s making a whole lot more money, but the distribution has just changed a bit.
Because this controls for inflation (“in 2014 dollars”), we’re seeing a significant real rise in income for everyone.
The lower class has gained about 26% income, the middle class has gained about 34%, and the upper class has gained 47%.
So those facts together give us some very rough idea of what’s going on.
Given all this: if you were to write a headline for this study, what would it be? Let us know in comments.
Ukrainian victories on the ground have been swift, dramatic, and devastating. And each win seems…
The Russians just got whipped. What the heck happened?
Mark Schauss is the host of Russian Rulers History and Battle Ground History. Known for…
https://play.acast.com/s/d1a6ddca-f102-4b5c-8d87-630132fe5aaa/62f43f685dc1ea00136539f2 Hot Updates Severodonetsk fell slowly as expected, but then Lysychansk fell quickly because Russian…
https://embed.acast.com/d1a6ddca-f102-4b5c-8d87-630132fe5aaa/62d0a6529385dd0012e405d1 Lots of ways we can split this. Much has been discussed about decoupling of…
"It was the best of times, it was the worst of times, it was the…
View Comments
It's still just speculation without the other important information, such as cost of living. The pennies in my pocket have a certain purchasing power based on the assigned cost (value) of needed (or desired) goods or service. Maybe the headline should be a call-to-action to readers to budget basic needs using the 2014 "middle income" model based on their local costs and submit the results. I suspect we'll see very different things based on region . . .
Absolutely! The picture gets more complicated the more we think about it. These are all really good points.
The "2014 dollars" measure accounts for CPI, which covers a "package" of goods/services that have been held constant... but not everything. So it covers some of cost of living adjustment, but not all (especially since what we're expected to buy is changing). A big one that's missing is college.
So ultimately it's really hard to say with a broad brush-stroke what exactly is happening to the "middle class."
Not sure what kind of headline I'd write. If I understand correctly, basically you have more households moving toward the extremes of the distribution. More of them moved into the upper class than moved into the lower class, so that's good for them. But what does this matter for society? If different income distributions have different effects on society, that would be worth considering. I feel like I've heard reference to the idea that having a strong middle class is good for society, but that's vague and I don't know if it's true.
"If different income distributions have different effects on society, that would be worth considering."
Definitely, yeah.
"I feel like I've heard reference to the idea that having a strong middle class is good for society"
I have also heard this and I can see generally the idea of "too-high inequality" being an issue but I also wonder whether one can have Pew's definition of the "middle class" shrink without a general increase in inequality? I'm trying to put my head around the math but I'm strugglin' a bit.
"...I also wonder whether one can have Pew's definition of the "middle class" shrink without a general increase in inequality?"
Well, just thinking about the shapes that a histrogram can have (in this case, a histogram of income)- every histogram has a middle. If you shrink the middle, you've gotta move people either to a higher income or a lower income, so that sounds like more inequality to me.
I think an important question is, why does income inequality matter? If it's because people of low income don't have enough money in absolute numbers, then you could just make everybody richer and solve the problem, even while retaining inequality. However if it's the difference in income that matters, then you have to even things out a bit. I don't know enough about the issue to say.
I'll put more thought into it late but I think one of the things that I'm pondering about is just how it defines its middle--it's "between 2/3 and 2x the median income," which.... might change whether it represents true inequality? Probably not.
"then you could just make everybody richer and solve the problem, even while retaining inequality. However if it's the difference in income that matters, "
Definitely a great question--more research for me to do here.
background music
relax music
beautiful heavenly peaceful music
winter relaxing jazz music
piano music
jazz music