New Census Data Show Middle Class Continues to Struggle

Union Membership Decline Is a Key Reason Why

Read the full article (Action Fund)

The middle class received close to the smallest share of the nation’s income it ever has since this data was first collected, according to Census data released today. In 2010, the middle 60 percent of all Americans garnered only 46 percent of the nation’s income, down from highs of around 53 percent in 1968.

The middle class weakened over the past several decades because the rich secured the lion’s share of the economy’s gains, with the share of income for the top fifth increasing by 6 percentage points from 1979 to 2010 according to Census Bureau data.

And the richest of the rich have done even better. The share of pretax income earned by the richest 1 percent of Americans more than doubled between 1974 and 2007, climbing to 23 percent from 9 percent, according to research by economists Thomas Piketty and Emmanuel Saez.

In contrast, incomes for most Americans were nearly flat over this same time period, and median income after accounting for inflation actually fell for working-age households during the supposedly good economy in the recovery between 2001 and 2007. As a result, the share of income going to the middle class has declined over the past 40 years.

In 2010, the middle class saw a very slight increase of 0.2 percent in their income share, but this very slight improvement is likely only temporary. During down economies the relative position of the middle class tends to temporarily improve because the income of the wealthy is more variable and drops further. Sadly these blips are quickly reversed once the economy gets going, and thus the decline of the middle class is likely to continue, as it has for decades.

Read the full article (Action Fund)