The Decline of the Great American Middle Class

Whether driven by benign-neglect or outright disdain, the “advanced capitalist system,” along with the nation’s two-party, “incumbency” form of government continues to undermine the country’s Middle Class and hold down those without the resources to live full and fulfilling lives.

As Nobel Laureate Joseph Stiglitz, a professor of Economics at Columbia, recently noted,

“The world’s quintessential middle class society is on the way to becoming its first former middle class society.”

According to a new Pew Research Center report,

“In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined…marking the first time in the center’s four decades of tracking this data that the size of the latter groups has transcended that of the first.


Fully 49% of U.S. aggregate income went to upper-income households in 2014, up from 29% in 1970. The share accruing to middle-income households was 43% in 2014, down substantially from 62% in 1970.


And middle-income Americans have fallen further behind financially in the new century. In 2014, the median income of these households was 4% less than in 2000. Moreover, because of the housing market crisis and the Great Recession of 2007-09, their median wealth (assets minus debts) fell by 28% from 2001 to 2013.


Meanwhile, the far edges of the income spectrum have shown the most growth. In 2015, 20% of American adults were in the lowest-income tier, up from 16% in 1971. On the opposite side, 9% are in the highest-income tier, more than double the 4% share in 1971.


The hollowing of the American middle class has proceeded steadily for more than four decades. Since 1971, each decade has ended with a smaller share of adults living in middle-income households than at the beginning of the decade.

Previous observations about the decline of the middle class and growing chasm between the super wealthy and everyone else, on this blog and elsewhere, has generated complaints about the inappropriateness of discussing what they claim to be a call for “class warfare.”

But it is long past time for the nation to drop that defense and for our elected officials to recognize that if we continue to refuse to discuss inequality, equity and fairness, we most certainly will be talking about class warfare, but we will be talking about it in the context of the very real frustration, anger and violence that will continue to grow and spill into the streets of the cities and towns across the United States.

Call it class warfare or use some other euphemism, but talk about it we must.

And that discussion needs to begin with the prompt adoption of a tax system that is fairer and more just, in which the wealthy are required to pay their fair share.

As Wait, What? readers know, in Connecticut the wealthiest pay about 5-6% of their income in state and local taxes, the middle class about 10-11% and the poor in excess of 12%.

Connecticut’s legislators could make a profound impact by ending the budget games and empty political rhetoric and actually changing the tax structure to reduce the burden on the Middle Class and all of those who are striving to make ends meet.

  • buygoldandprosper

    Nothing will change as long as the legislators,at all levels, are the rich.
    Take Danny Malloy, for instance. He basically has never worked in the real world. He has lived on the public’s dime, from transportation to travel to housing for most of his political life ,now more than ever. Even when he was at loose ends he picked up a gig with a private equity firm…no telling what he did for his very generous pay.He snagged Cathy a no-show gig making almost $200K per year and the Malloy family in Hartford pretty much dodges all the taxes us little people are suffering under.
    It is only going to get worse.
    Vote Bernie if you want some change!

    • Sleepless in Bridgeport

      I am going to vote for Bernie early and often like I learnt from PT Barnum.

  • jhs

    Great summary. A lot goes to the lack of long range planning in all aspects of govt and industry. Industry plans for the next quarter earnings and end of year so the execs can get the bonuses. Govt has no incentive to review all jobs for overlap, need and appropriate salary and benefits. As long as unions are allowed to give to the campaigns of politicians that won’t change. Corporations do the same with their PACs that control the legislative agenda. We need a tax code overhaul, getting rid of the corporate loopholes, and bringing the tax rate to an equal level with competing nations. we are the only nation taxing overseas profits. That needs to be looked at because that money could be used for growth. The admin could propose bringing the overseas profits in at a low tax rate, if invested and not used for buybacks. There are lots of ideas, just the will to propose them. Getting big money out of campaigns is essential.

  • buygoldandprosper

    No doubt Danny has a plan for this…unlike the other guy.

    “A new Harvard study finds more than half of renters in Connecticut are either severely or moderately burdened by housing costs. That puts the state above the national average.
    In Connecticut, 23.2 percent of renters are deemed moderately burdened, which represents about 105,000 households. The national average is 22.8 percent. An additional 28.5 percent of renters, 130,000 households, are severely burdened versus a national average of 26.4 percent.”

  • JMC

    Yes, the middle class is being destroyed in CT. What is not mentioned here, however, is that the middle class’s decline here and most places is accompanied at the same time by the creation of a large and permanent underclass which votes itself benefits from the public treasury. The name for this wealth transfer and destruction of the producing class is called Socialism. Its politicians help create this underclass and foster it as a means to exercise their own power and office and keep them there. One of the indicators of a Socialist society is a condition of permanent fiscal crisis. This too is a tool for Socialist politicians to control the plebs. Socialism has arrived in CT. Let’s call it what it is. And let’s be ready for the inevitable consequences.

  • buygoldandprosper

    A bit off topic, but:

    “Despite a $41 million budget gap projected for the University of Connecticut’s next fiscal year, the school continues to spend over $71 million a year on athletics, according to university financial documents.
    UConn increased athletics institutional funding in 2014 to $17 million, even though ticket sales have not yet recovered from the levels they reached since UConn left the Big East conference for the American Athletic Conference.”
    The basketball academy in Storrs (aka UConn) just can’t seem to get their priorities straight… their “visions” are about as screwed up as Dan Malloy’s. Let’s buy Susan another mansion and call it a day!

  • BamboozledTeacher

    I am a teacher, my wife is an RN, we live in a very modest home, (165K) and yet we really struggle just to make ends meet. And they say the recovery is just about done. Ha! we never left the recession! Middle class opportunities for millennials are becoming nonexistent.