U.S. Census Bureau recently released time-series data on household income. All data in the following chart is pegged to 2010 dollars, meaning it is adjusted for inflation - a dollar in 1970 buys the same as a dollar in 2020.
The Census Bureau divides the income distribution into nine segments and three broader categories:
- Poor: $0 - $35,000 (again, 2010 dollars)
- Middle Class: $35 - $100,000
- Rich: $100,000 - and up
Source: Economist Anthony Davies
The percentage of households in the low and middle-income segments has declined while the percentage of households in the high-income segments has increased. Furthermore, over these fifty years, the average number of people living in a household has been steadily shrinking the further down the income distribution we go and increasing the further up we go. Not only are there more wealthy households but there are more people living in those wealthy households.
The middle class is disappearing into the upper class. I am not making any policy statement here. I am saying that policies based on the perception of the middle class being driven into poverty - "the rich are getting richer and the poor are getting poorer - are demonstrably wrong.
