Economic Progress

Fewer American people are middle class than 50 years ago. What has happened? 

A man with two children

Only 50% of people in America now live in middle-class households, down from 61% five decades earlier. Image: Unsplash/Nathan Dumlao

Rakesh Kochhar
Associate Director of Research, Pew Research Center
Stella Sechopoulos
Research Assistant, Pew Research Center
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Economic Progress?
The Big Picture
Explore and monitor how Economic Progress is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Economic Progress

  • The share of adults living in middle-class households fell from 61% in 1971 to 50% in 2021, according to Pew Research Center analysis of government data.
  • Household incomes have risen considerably since 1970, but those of middle-class households have not climbed nearly as much as those of upper-income households.
  • Black adults made some of the biggest strides up the income tiers, but they, along with Hispanic adults, are more likely to be in the lower-income tier than White or Asian adults.
  • There have been sizable increases in the share of people without degrees falling into lower-income brackets.
  • Those aged 65 and older made the most notable progress up the income ladder from 1971 to 2021.

The middle class, once the economic stratum of a clear majority of American adults, has steadily contracted in the past five decades. The share of adults who live in middle-class households fell from 61% in 1971 to 50% in 2021, according to a new Pew Research Center analysis of government data.

A chart showing the percentage of adults in each income tier
A 7% increase in the upper income bracket can be seen when comparing 2021 to 1971 figures Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

The shrinking of the middle class has been accompanied by an increase in the share of adults in the upper-income tier – from 14% in 1971 to 21% in 2021 – as well as an increase in the share who are in the lower-income tier, from 25% to 29%. These changes have occurred gradually, as the share of adults in the middle class decreased in each decade from 1971 to 2011, but then held steady through 2021.

The analysis below presents seven facts about how the economic status of the U.S. middle class and that of America’s major demographic groups have changed since 1971. A related analysis examines the impact of the coronavirus pandemic on the financial well-being of households in the lower-, middle- and upper-income tiers, with comparisons to the Great Recession era. (In the source data for both analyses, demographic figures refer to the 1971-2021 period, while income figures refer to the 1970-2020 period. Thus, the shares of adults in an income tier are based on their household incomes in the previous year.)

Household incomes have risen considerably since 1970, but those of middle-class households have not climbed nearly as much as those of upper-income households. The median income of middle-class households in 2020 was 50% greater than in 1970 ($90,131 vs. $59,934), as measured in 2020 dollars. These gains were realized slowly, but for the most part steadily, with the exception of the period from 2000 to 2010, the so-called “lost decade,” when incomes fell across the board.

A chart showing median income, in 2020 dollars and scaled to reflect a three-person household
Upper income saw a percentage change much greater than middle and lower income Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

The median income for lower-income households grew more slowly than that of middle-class households, increasing from $20,604 in 1970 to $29,963 in 2020, or 45%.

The rise in income from 1970 to 2020 was steepest for upper-income households. Their median income increased 69% during that timespan, from $130,008 to $219,572.

As a result of these changes, the gap in the incomes of upper-income and other households also increased. In 2020, the median income of upper-income households was 7.3 times that of lower-income households, up from 6.3 in 1970. The median income of upper-income households was 2.4 times that of middle-income households in 2020, up from 2.2 in 1970.

Discover

What is a circular economy?

A chart showing the percentage of U.S. aggregate household income held by lower-, middle- and upper-income households
Aggregate household income for middle income households seems to be on a decline Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

The share of aggregate U.S. household income held by the middle class has fallen steadily since 1970. The widening of the income gap and the shrinking of the middle class has led to a steady decrease in the share of U.S. aggregate income held by middle-class households. In 1970, adults in middle-income households accounted for 62% of aggregate income, a share that fell to 42% in 2020.

Meanwhile, the share of aggregate income accounted for by upper-income households has increased steadily, from 29% in 1970 to 50% in 2020. Part of this increase reflects the rising share of adults who are in the upper-income tier.

The share of U.S. aggregate income held by lower-income households edged down from 10% to 8% over these five decades, even though the proportion of adults living in lower-income households increased over this period.

Older Americans and Black adults made the greatest progress up the income ladder from 1971 to 2021. Among adults overall, the share who were in the upper-income tier increased from 14% in 1971 to 21% in 2021, or by 7 percentage points. Meanwhile, the share in the lower-income tier increased from 25% to 29%, or by 4 points. On balance, this represented a net gain of 3 percentage points in income status for all adults.

A chart showing income status changes across various demographic groups
Those in the age 65 plus bracket saw some of the biggest changes Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

Those aged 65 and older made the most notable progress up the income ladder from 1971 to 2021. They increased their share in the upper-income tier while reducing their share in the lower-income tier, resulting in a net gain of 25 points. Progress among adults 65 and older was likely driven by an increase in labor force participation, rising educational levels and by the role of Social Security payments in reducing poverty.

Black adults, as well as married men and women, were also among the biggest gainers from 1971 to 2021, with net increases ranging from 12 to 14 percentage points.

On the other hand, not having at least a bachelor’s degree resulted in a notable degree of economic regression over this period. Adults with a high school diploma or less education, as well as those with some college experience but no degree, saw sizable increases in their shares in the lower-income tier in the past five decades. Although no single group of adults by education category moved up the income ladder from 1971 to 2021, adults overall realized gains by boosting their education levels. The share of adults 25 and older who had completed at least four years of college stood at 38% in 2021, compared with only 11% in 1971.

Progress up the income ladder for a demographic group does not necessarily signal its economic status in comparison with other groups at a given point in time. For example, in 2021, adults ages 65 and older and Black adults were still more likely than many other groups to be lower income, and less likely to be middle or upper income.

Married adults and those in multi-earner households made more progress up the income ladder from 1971 to 2021 than their immediate counterparts. Generally, partnered adults have better outcomes on a range of economic outcomes than the unpartnered. One reason is that marriage is increasingly linked to educational attainment, which bears fruit in terms of higher incomes.

A chart showing the percentage of adults in each income tier, with regards to marital status and the amount of earners in a household
Multi-earner households seem more likely to be in the upper income bracket than single-earner households Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

Married men and women were distributed across the income tiers identically to each other in both 1971 and 2021. Both groups nearly doubled their shares in the upper-income tier in the past five decades, from 14% in 1971 to 27% in 2021. And neither group experienced an increase in the share in the lower-income tier.

Unmarried men and women were much more likely than their married counterparts to be in the lower-income tier in 2021. And unmarried men, in particular, experienced a sizable increase in their share in the lower-income tier from 1971 t0 2021 and a similarly large decrease in their share in the middle-income tier. Nonetheless, unmarried men are less likely than unmarried women to be lower income and more likely to be middle income.

Adults in households with more than one earner fare much better economically than adults in households with only one earner. In 2021, some 20% of adults in multi-earner households were in the lower-income tier, compared with 53% of adults in single-earner households. Also, adults in multi-earner households were more than twice as likely as adults in single-earner households to be in the upper-income tier in 2021. In the long haul, adults in single-earner households are among the groups who slid down the income ladder the most from 1971 to 2021.

A chart showing the percentage of adults in each income tier, with regards to gender and background
Members of the black demographic are more likely to be a part of the upper income bracket than the Hispanic demographic Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

Despite progress, Black and Hispanic adults trail behind other groups in their economic status. Although Black adults made some of the biggest strides up the income tiers from 1971 to 2021, they, along with Hispanic adults, are more likely to be in the lower-income tier than are White or Asian adults. About 40% of both Black and Hispanic adults were lower income in 2021, compared with 24% of White adults and 22% of Asian adults.

Black adults are the only major racial and ethnic group that did not experience a decrease in its middle-class share, which stood at 47% in 2021, about the same as in 1971. White adults are the only group in which more than half (52%) lived in middle-class households in 2021, albeit after declining from 63% in 1971. At the top end, only about one-in-ten Black and Hispanic adults were upper income in 2021, compared with one-in-four or more White and Asian adults.

The relative economic status of men and women has changed little from 1971 to 2021. Both experienced similar percentage point increases in the shares in the lower- and upper-income tiers, and both saw double-digit decreases in the shares who are middle class. Women remained more likely than men to live in lower-income households in 2021 (31% vs. 26%).

A chart showing the percentage of adults in each income tier, with regards to age
The 30-44 demographic has the most members in the upper income bracket Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

Adults 65 and older continue to lag economically, despite decades of progress. The share of adults ages 65 and older in the lower-income tier fell from 54% in 1971 to 37% in 2021. Their share in the middle class rose from 39% to 47% and their share in the upper-income tier increased from 7% to 16%. However, adults 65 and older are the only age group in which more than one-in-three adults are in lower-income households, and they are much less likely than adults ages 30 to 44 – as well as those ages 45 to 64 – to be in the upper-income tier.

All other age groups experienced an increase in the shares who are lower income from 1971 to 2021, as well as a decrease in the shares who are middle income. But they also saw increases in the shares who are upper income. Among adults ages 30 to 44, for instance, the share in upper-income households almost doubled, from 12% in 1971 to 21% in 2021.

Have you read?
A chart showing the percentage of adults in each income tier, with regards to education
Adults with a bachelor's degree make up the largest percentage of upper income earners Image: Pew Research Center/Pew Research Center analysis of the Current Population Survey, Annual Social and Economic Supplement (IPUMS)

There is a sizable and growing income gap between adults with a bachelor’s degree and those with lower levels of education. In 2021, about four-in-ten adults with at least a bachelor’s degree (39%) were in the upper-income tier, compared with 16% or less among those without a bachelor’s degree. The share of adults in the upper-income tier with at least a bachelor’s degree edged up from 1971 to 2021, while the share without a bachelor’s degree either edged down or held constant.

About half or a little more of adults with either some college education or a high school diploma only were in the middle class in 2021. But these two groups, along with those with less than a high school education, experienced notable drops in their middle class shares from 1971 to 2021 – and notable increases in the shares in the lower-income tier. In 2021, about four-in-ten adults with only a high school diploma or its equivalent (39%) were in the lower-income tier, about double the share in 1971.

Loading...
Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Economic ProgressFuture of Work
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

Africa's debt crisis needs a bold new approach. Here's what countries can do

Danny Bradlow

February 28, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum