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By Staff Reporters

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What’s shrinking in size, overworked and woefully underpaid?

Did you know that only half of U.S. adults live in a household with an annual income of $52,000 to $156,000, the range it takes to be considered middle income, according to the Pew Research Center. That share is significantly lower than it was in 1971, when 61% of the nation’s adults qualified as middle income.

In 2022 — an era of historic inflation and a manic economy in which jobs are plentiful but wages are stagnant — more Americans are living paycheck to paycheck. And it’s affecting more than just their income.

“People judge whether or not they’re achieving the American dream by comparing their income and their lifestyle, or what their income can buy, to what they see around them,” says Isabel Sawhill, a senior fellow at the Brookings Institution.

On paper, middle-class household income has increased considerably in the last 50 years. Measured in 2020 dollars, the median salary of the U.S. workforce is 50% higher now ($90,131) than it was in 1971 ($59,934), primarily thanks to women’s increased participation in the workforce, says Sawhill, who’s a co-author of the Brookings report “A New Contract with the Middle Class.”

Those gains, however, pale in comparison to the 69% growth enjoyed by the wealthiest households. Elisabeth Jacobs, a deputy director at the research nonprofit Urban Institute, said in a 2021 Brookings panel that if middle incomes had grown at the same pace as the top 20% of earners over the past 50 years, a solidly middle-class family would average around $139,000 annually (post-tax).

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CITE: https://www.r2library.com/Resource/Title/082610254
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Filed under: "Ask-an-Advisor", Accounting, Career Development, Ethics, Financial Planning, iMBA, Inc., Investing | Tagged: "Middle Class" Defined?, blue collar, Brookings, middle class, working class |