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The Economic Impact of a Changing Middle Class

By the Numbers: How the Middle Class Is Changing

Look at Graph 1 below. According to economists and the Pew Research Center, “middle income” households have an annual income that is between two-thirds and double the median income for that household size. Median income is the amount that divides income distribution into two equal groups. Half have income above that amount, and half have income below that amount.

Graph 1: What Does "Middle Income" Mean?

Graphic that defines the income ranges of lower, middle, and upper class households.

Based on the 2014 median income for a four-person household. Figures have been rounded. Source: Pew Research Center

This graphic shows a horizontal bar divided into three color-coded sections labeled Lower, Middle, and Upper. Income is plotted in $50,000 increments ranging from $0 to $200,000-plus beneath the bar. A mark in the Middle income section indicates that Median Income is $72,500. Lower income spans $0 to $48,000 (two-thirds of Median income). Middle income spans $48,000 to $145,000 (double the median). Upper income spans $145,000 to $200,000-plus.

Now examine Graph 2 on the right. Using information from both graphs, answer the questions below.

Take Notes

Answer the following questions in a few sentences each. Cite evidence from the graphs where possible.

  • How has income distribution changed for the three main income tiers since 2000? How does this compare to the previous three decades?
  • What might explain why there are fewer people in the middle class today? Consider these questions in explaining your answer:
    • Has the range of incomes that defines the middle class narrowed?
    • Which tier has shown the most growth in income? How about the least?
    • Is income being distributed more widely to the lowest and highest tiers in our society?

Graph 2: Percent Change in Median Household Income, By Income Tier

Bar graph showing the change in median household income for upper, middle, and lower income tiers from 1970 through 2014.

Source: Pew Research Center

This graph presents data by decade. In the 1970s, upper tier income rose 10 percent, middle tier income rose 13 percent, and lower tier income rose 13 percent. In the 1980s, upper tier income rose 18 percent, middle tier income rose 11 percent, and lower tier income rose 8 percent. In the 1990s, upper tier income rose 18 percent, middle tier income rose 12 percent, and lower tier income rose 15 percent. In the 2000s, upper tier income fell 6 percent, middle tier income fell 5 percent, and lower tier income fell 9 percent. Between 2010 and 2014, upper tier income rose 3 percent, middle tier income rose 1 percent, and lower tier income was unchanged.