If you listen to any political debate, at any time in the last fifty years, odds are you’ve heard a great deal about the middle class. They have been a focus point for politics and economics for decades, as part of a benchmark indicator for America’s economy and its future. In the last 45 years though, there have been big changes to the middle class, and the results are revealing.
In an age of rising income inequality, preserving the middle class is of the utmost importance to politicians and to voters. A new report from Pew Research Center marks the huge changes to the middle class since the 1970s. The biggest revelation is simple: “In every decade since then, the percentage of adults living in middle-income households has fallen.” In 1971,the middle class stood at 61 percent and today, the number is at 50 percent.
Why does the middle class matter?
The answer is because, “the state of the American middle class is at the heart of the economic platforms of many presidential candidates ahead of the 2016 election…meanwhile, a flurry of new research points to the potential of a larger middle class to provide the economic boost sought by many advanced economies.”
The middle class demographic is defined as a household where the income is, “two-thirds to double that of the overall median household income. A family of three, for instance, would need to have a minimum income of $41,869 to qualify as middle-income.”
One of the biggest changes to the middle class is that they no longer make up the majority of American households. Upper and lower income households combined outnumber the 120.8 million adult Americans living in middle-income households. Additionally, the middle class saw smaller income gains despite rising incomes across the spectrum. The highest income gains have been isolated to upper-income households.
Protecting the middle class will continue to be a talking point for all politicians, and for good reason. Supporting and growing the middle class is an important part of the American economy. Our team at Apex Financial Advisors knows that for any income earner, a financial plan is crucial to protecting and growing wealth. No matter where you fall on the Pew spectrum of households, our team at Apex Financial Advisors can help you develop a financial plan and successfully meet your personal goals. Whether that’s buying a house or sending your kids to college, our experts can help you find a financial solution that works. Call Apex Financial Advisors today to start planning and protecting your financial future.
Stillwell, Victoria. “Here’s How Much the U.S. Middle Class Has Changed in 45 Years.” Bloomberg.com. Bloomberg, 15 Dec. 2015. Web.