Visualizing The Dramatic Erosion Of America's Middle Class

Tyler Durden's picture

To be sure, income inequality and the complete erosion of the middle class in America is something that we have discussed many times over the years, especially since the central planners have done nothing but accelerate the problem. While many often focus on the super rich during the income inequality discussion, a new study from the Urban Institute shows that one rung below the super rich, dubbed the "Upper Middle Class", has actually grown dramatically over the years (along with the rich) and has significantly contributed to the slow disappearance of the middle class.

To make a long story short, the report provides a stunning visualization of just how significantly the middle class has eroded from a population standpoint, as well as from an income standpoint.

First, here is how the report defines the different social classes that will be shown in the charts below.

This first chart shows that as a percentage of the total population, the Rich & Upper Middle Class combined were just 13% in 1979, while the Middle Class accounted for 38.8%. Fast forward to 2014, and the Rich & Upper Middle Class combined for 31.2% of the total population, while the middle class shrunk to just 32% of the population.

While the percentage of the Rich grew, what stands out the most is the dramatic increase in the Upper Middle Class from 1979 to 2014, and the gradual decline of the middle class.

And now the chart that everyone has been waiting for, the below shows which social class controls what percentage of the nation's total income. This is where we can see the definitive effects of income inequality coming into play, as the absolute erosion of the middle class can be seen very clearly in this chart. While the population has shifted some, the income gains have grown quite disproportionately.

In 1979, the Middle Class controlled 46.4% of the total national income, compared to the Rich & Upper Middle Class who controlled just 30%. In 2014, the Middle Class only controlled 25.8%, while the Rich & Upper Middle Class jumped to 63.1%!

This chart alone shows all we need to know regarding the income inequality discussion, and the demise of the middle class.

We'll leave you with the part of the paper's conclusion.

This study found that the proportion of the population in the upper middle class went from under 13 percent in 1979 to over 29 percent in 2014. The effect of this growth was magnified by the greater income differences between this group and the rest of the population. Although wealthier people always have a greater share of total income, this report documents a major shift in the distribution of economic resources. In 1979, the bottom three income groups controlled 70 percent of all incomes, and the upper middle class and rich controlled 30 percent. By 2014, this distribution shifted to 37 percent for the bottom three groups and 63 percent for the upper middle class and rich groups. The middle class alone saw its share of income decline from 46 percent in 1979 to 26 percent in 2014.

 

Any discussion of inequality that is limited to the 1 percent misses a lot of the picture because it ignores the large inequality between the growing upper middle class and the middle and lower middle classes.

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santafe's picture
santafe (not verified) Jun 22, 2016 7:34 PM

The America of old is DEAD. This America is NEVER, EVER, EVER gonna get better.
http://wp.me/p4OZ4v-3z

knukles's picture

See, see see, so the rich do get even richer.

Money Counterfeiter's picture
Money Counterfeiter (not verified) knukles Jun 22, 2016 7:37 PM

No gold standard = plundering by government and bankers.

Stuck on Zero's picture

And this is why economic resets must be allowed to happen every 0-60 years. It puts everyone back on an even basis.

TrustbutVerify's picture

Money Countefeiter, Don't leave off the self-induced damage the average middle-classer has done to his and herself by insisting on spending so much of their hard earned money on foreign made goods.  Broader policy hasn't helped them but Americans have been glacially slow they are in an economic war and they have been losing - for decades.  And much of it is by their own hands.  Ask anyone you know that "cares" where what they've bought recently was made.  And if they claim anything they bought was "Made in the USA" ask what percentage of it was "Made in the USA."  

If we can change the direction of the river of money that flows out of the USA for foreign goods, and keep a major portion of that money here, we'll be going a long way to ensure our economic survival and perhaps well being.    

OldPhart's picture

Most everything we buy is from yard sales, unless it's a durable, then we favor American Made, if we can find it.  Food is bought willy-nilly.  We buy what is cheap, regardless of source (provided there are no health warnings for certain countries).

Dad and I went to buy pants at some chain, I think Burlington Coat Factory.  We in seperate booths.  Dad yells out, these are made in Saigon...I bombed the shit out of Saigon.  Me, mine were made in Guam, you were stationed in Guan, what the fuck were you doing bombing Saigon?  Ah, hell, I rode along with a B-52 to see what the fuss was about.  These pants were made in Indonesia, we got a beef about Indonesia?  Not that I can think of, those girls were hot and put out pussy on sale.  Hey, you got any toilet paper over there?  I'm out.  Me:  I'm out, too...now what are we gonna do?  Dad:  *singing* Be a man, use your hand...*

We get out of the booths, three teenagers want to shake dad's hand, and security escorted us out the door.

Wifes had to buy the pants that fit.

khnum's picture

so much trickle down your now knee deep in a steaming pool of hot piss

LetThemEatRand's picture

First, upper middle class is not $100K anymore.  Second, income means shit.  It's about assets.  Throughout history, those with land and other real assets controlled everyone else including political leadership.  Warren Buffet isn't powerful because of his income, but because of his assets.  America deviated from the norm for a hundred years or so in having a vibrant middle class that had real political power, and thus economic prosperity.   Those times are coming to an end.

dexter_morgan's picture

Warren Buffet is rich and powerful because of his old man and being plugged in to the1%er matrix since birth. What IS GEICO short for again?

AdolphLustig's picture
AdolphLustig (not verified) dexter_morgan Jun 22, 2016 7:48 PM

Getting
Everyones
Income
&
Controling
Others

dexter_morgan's picture

That's the effect, but I belive it stands for Government Employees Insurance Company formed in 1936 that Buffer later got involved with in '51 and finally bought around '99.

toady's picture

" income means shit"

Exactly. I'm wondering how they calculate "income". According to my 1040 I'm WAY down in the poor catagory, meanwhile, thanks to deductions, I'm actually pocketing around 80K or so a year....

It's all perfectly legal. 

 

 

NurseRatched's picture

Bingo!  Income is meaningless because it is so easily consumed (especially by taxes).  Wealth is what you have managed to hang on to.

America deviated from the norm after winning two world wars and having large-scale manufacturing which could afford to pay the semi-skilled workers more.  But those days are over.  We are no longer the low cost producer nor do we monopolize the technology. 

You don't want to be middle class without systemic advantages.  Why be marginal when there is no payoff?

LetThemEatRand's picture

I disagree with the meme that America's middle class only existed because America won two world wars.  America won two world wars because it had a vibrant middle class.   And it didn't take Europe/Asia 30 years to build new factories after WWII, such that we can pin America's success on the effects of war.  Even in the 1950's, it took only a year or two to build a factory.

CNONC's picture

I frequently disagree with you, particularly on matters of belief, but you're dead on the money today.

Bobbyrib's picture

There was a middle class because of unions. The US didn't win the war, because of the middle class. The US won the war, because it was left largely untouched (except for supply boats to Europe) by the effects of the war. The US had fresh bodies that could withstand the war and was able to mass produce weapons to fight the war and supply the Russians in World War II.

It doesn't take a middle class to manufacture products, take a look at Asia for proof. Our multi-nationals will just keep looking for the cheapest producers of these goods. I expect to see a lot more products produced from Bangladesh in the coming years. China and India are getting to expensive. The Vietcong are getting more expensive too.

MalteseFalcon's picture

It takes a year or two to build a factory, if you have the tools to build the factory, if you have the capital to acquire the tools and if the regime allows the building of factories.

dexter_morgan's picture

People believe what they want to believe. When I mentioned NAFTA and the 'free' trade agreements being a major problem a younger female co-worker agreed. Then when I said Bill and Hillary were chief promoters of NAFTA she says that's bullshit, Clinton had NAFTA forced on him by the wascally wepubwicans. 

Forced on him??? Now she was alive during that era, but pre-teen so she didn't have the advantage of actually witnessing it, but there is no changing her mind on that one - poor Billie had them mean old wepubwicans force that shit on him. LOLOLOLOL

I have little hope for the younger generation, and not totally do I think it is their fault. When you are fed garbage in school and the media you spew garbage out. 

Kinda sad. I challenged her to research it and get back to me. Not holding my breath, that would threaten to upset her applecart so to speak. 

AdolphLustig's picture
AdolphLustig (not verified) dexter_morgan Jun 22, 2016 7:42 PM

"but there is no changing her mind on that one"

Women are always right, and when they are proven wrong...they are still right, in their own minds.

MissCellany's picture

But men are NEVER like that.

/s/, because some might need it made clear.

AdolphLustig's picture
AdolphLustig (not verified) MissCellany Jun 22, 2016 8:21 PM

Some men are to be sure.

Things you never hear from a female:

I was wrong.
I'm sorry.
Its my fault for cheating on you.
I care more about a mans personality than his rock hard abs.
I don't care how much money you have, I love you just the way you are.
I'll pay for dinner.
I will pay your bills.
I love guys who treat me well.
This is why I am angry with you.
I'm going to tell that guy I like him.
I will pay for drinks.
Etc etc ad infinitim.

Miffed Microbiologist's picture

I really wonder why this is true. Women would be much happier if they were honest. If you just admit you're a dumbshit when you truly are, men really do respect you more and communications do become easier. Maybe women just have too much to prove and have not started down the mindfulness path. Or maybe I just don't take myself so seriously.

I was walking to starsucks when I saw a group of SDGE guys taking a break from a massive local job. I told them thanks for all that they do especially in this oppressive heat. They all just looked at each other and stared at me dumbfounded, not sure what to say. Sad really.

We need to develop more gratitude for all men do for us.

Miffed

AdolphLustig's picture
AdolphLustig (not verified) Miffed Microbiologist Jun 22, 2016 9:26 PM

Women have been coddled and brainwashed to hate men and think of themselves (and only themselves) as being surpior for having x chrormosomes.

It started with the right to vote, then second wave feminism of bra burning and under arm hair growing and....they didn't get everything they wanted and now?

Women laugh at men when on live tv when a female cuts her husbands dick off, throws it into the disposal and flips the switch.

Seek_Truth's picture

You over-generalize.

You are describing feminazis.

There are western women who do none of the above.

 

AdolphLustig's picture
AdolphLustig (not verified) Seek_Truth Jun 22, 2016 10:06 PM

Name them.

Seek_Truth's picture

No.

This is an anonymous forum.

You are simply reaping what you sow.

 Of people like you the Proverbs are true:"A dog returns to its vomit," and, "A sow that is washed returns to her wallowing in the mud." - 2 Peter 2:22

AdolphLustig's picture
AdolphLustig (not verified) Seek_Truth Jun 22, 2016 10:59 PM

Bible babble.

I am not a canine.

I am a homo sapian.

And my statement was a joke, panty sniffer.

Seek_Truth's picture

In your case, you can drop the "sapien", though.

By the way,

I found your vimeo page: https://vimeo.com/user1657986

And your facebook page: https://www.facebook.com/darthkix

;-)

 

DaveA's picture

Feminism has not turned all women into raging man-haters but it has bolloxed the marriage market nonetheless. When women get college degrees and often earn more than their male peers, the average man just doesn't have much to offer them.

Of course we male ZeroHedgers get all the pussy we want because we're far above average by every measure, but telling Joe Lunchpail he can't marry and have children is far worse, for him and for the nation as a whole, than telling him he'll never earn more than $40,000 a year!

Traditional society price-controlled marriage down to a level average men could afford. Price ceilings cause shortages, so young women were forced into the market by saying it's marriage or the convent for you, sweetie.

AdolphLustig's picture
AdolphLustig (not verified) DaveA Jun 22, 2016 10:58 PM

Or porn, instagram whores...or having arabs shit on their chest because that is popular for sand niggers.

Seek_Truth's picture

You formed your opinion of "women" based on the trash you hang around with.

Things I've heard from females, regularly:

I was wrong.
I'm sorry.
I care more about a mans personality than his rock hard abs.
I don't care how much money you have, I love you just the way you are.
I'll pay for dinner.
I will pay your bills.
I love guys who treat me well.
This is why I am angry with you.
I will pay for drinks.

Etc etc ad infinitim.

You make your bed and you lay in it.

You're not going to attract good women unless you are a good man in good women's eyes.

AdolphLustig's picture
AdolphLustig (not verified) Seek_Truth Jun 22, 2016 10:06 PM

"You're not going to attract good women unless you are a good man in good women's eyes."

Good woman=Unicorn

Seek_Truth's picture

You're a closet homo- admit it already, misogynist.

AdolphLustig's picture
AdolphLustig (not verified) Seek_Truth Jun 22, 2016 10:56 PM

Well which is it? Make up your mind.

You cannot have both.

A homo or a myogynist?

Seek_Truth's picture

You sure can be both- and in your case, you demonstrably are:

You're a homo who hates women.

In other words, you're a homo and a mysoginist.

Dimwit.

 

Miffed Microbiologist's picture

Seek, I don't think this is misogyny though I see why you say so. There is just a lot of hurt between the sexes today. I think this represents more sadness and frustration not actual hatred of women. In my experience true misogyny really is rare. When there is injustice this foments anger. Anger just begets more anger because what ever you send out, comes back to you.

What we really need is solutions. Men and women need each other. We need to love and appreciate each other. We need to respect each other for what we are. All of this is just so fucked up today I wish I knew the way out. However, it doesn't take a PhD to understand who benefits from this state of affairs. A sick spider engorged on people's lives sits smiling in the shadows.

Turn the other check and show Love. It's the only way out of the morass don't you think?

Miffed

neutrino3's picture

I learned that hard way.

Why? You Gods Beings, with ultimate power to oust the man's very soul, with just cotton ear sticks, still fall for ridiculous three words: I love you. 

Bobbyrib's picture

I will not marry an American woman. Most of them have more affection for the color green than their significant other. The marriage vows they take are a sick joke on whatever church they are married in and whatever goober decides to marry one. The minute things turn sour expect a divorce.

For the idiot claiming Adolph Lustig can't find good women, I grew up in an upper middle class area and there are zero around here. Daddy spoiled them and they want to keep the party going.

You have to keep up with those Kardashians afterall../sarcasm.

Feminism has ruined American women.

ThanksIwillHaveAnother's picture

Recently a dipshit in bar on the lake ridiculed me when I said America was on gold standard until Nixon took $ off gold in 1971 (i.e. the end of Bretton Woods Monetary System)   This person was probably around 50 years old.  Complete jerk.

Grandad Grumps's picture

The economic worth of $20,000 in 1979 is $132,000 today. I am thinking that $20,000 annual income was not "upper middle class" in 1979 (based on my salary in that area of time) and $132,000 annual income is not upper middle class today.

So, my conclusion is that this article is a total scam used by the powers to be to make people think that they are better off than they really are.

didthatreallyhappen's picture

132k in an area where houses are 150k is not bad, if housing is double or triple or ...

1980XLS's picture

When I first saw the headline, I thought I read, "The Democratic errosion of the Middle Class"

Scary shit when that happens.

Oh Wait..........

Lyman54's picture

Tell us something we didn't figure out ten years ago.

CNONC's picture

100,000 dollars is not upper middle class. It is all a matter of definition. Define upper middle as 200,000 and over, which is reasonable, and the middle class has actually grown. I'm not denying that the middle class income is in decline, but the inequality exists between the middle class and the very wealthy.

TurnwiseWiddershins's picture

What world are you living in?  The MEDIAN American HOUSEHOLD makes $54,000 per year. 

A family of 4 can live on that in much of the country, but they aren't saving or investing anything.

And keep in mind that half of America is doing worse.

CNONC's picture

I completely agree. A lot depends on where you live. But understand that measures of central tendency can be heavily influenced by the distribution tails. A large number of households report incomes around the amount required to receive the earned income tax credit and other benefits. My assertion that 100,000 is not upper middle class is based on my own experience and observations. I make pretty good money as an industrial process heat specialist and my wife is an RN. Our household income, when we both work, is well over 100,000. We are very definitely middle class when we lived in Atlanta. We recently moved to the boonies, with a paid for house. I can pay the bills working 2 or 3 days a month, and my wife works not at all. I am far better off now, with an income of less than 20k than I was at over 100k. But, again, I assert that as conventionally measured, taking into account the way most people live, 100k is middle class. It is that fact that is the most disturbing, that it should take that level of income to achieve a basic level security.

TurnwiseWiddershins's picture

Don't these bar graphs merely represent inflation?

$5,000 per year was solidly middle class when my grandfather was in his early 30s.

ISawThatToo's picture
ISawThatToo (not verified) Jun 22, 2016 8:17 PM

Banbait #277

The three economic layers that the US is heading toward are noted in George Orwell's fictionalized commentary on the Protocols, and warning about the Khazarians' planned tyranny:

"Below Big Brother comes the Inner Party. Its numbers limited to six millions, or something less than 2 per cent of the population of Oceania. Below the Inner Party comes the Outer Party, which, if the Inner Party is described as the brain of the State, may be justly likened to the hands. Below that come the dumb masses whom we habitually refer to as 'the proles', numbering perhaps 85 per cent of the population. In the terms of our earlier classification, the proles are the Low: for the slave population of the equatorial lands who pass constantly from conqueror to conqueror, are not a permanent or necessary part of the structure." -- George Orwell, "1984," Ch. 9

Note the "six million" reference. That is not an accident, any more than the 114 plus uses of it by the Khazarians between 1897 and 1945.