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The prevailing narrative of wealth in the United States today is that the rich are gaining at the expense of everyone else – especially the middle class.Headlines about a study from Pew Research strongly support this view. The report released this week finds that middle-income Americans have seen their median net worth remain roughly flat over the past quarter-century, at $93,150 in 2010, compared to $91,056 in 1983 (in 2011 constant dollars).
Upper income families, by contrast, have seen their median net worth grow over the same period by 87 per cent, to $574,788 from $307,134.
Income measures seem to tell a similar story, at least over the long term. In 1980, middle-income Americans accounted for 60 per cent of the nation’s total income. The upper-income folks accounted for 30 per cent of national income.
Over the next 30 years, middle America lost and upper America gained. In 2010, a new milestone was reached: upper income Americans accounted for a larger share of income than middle-income Americans. (Read more: The Falling Fortunes of the One per cent)
But here is an equally important fact: many of those middle class Americans became upper-income Americans. The rich did get richer, but they also became more numerous.
The study shows that as the number of middle-class Americans fell (from 61 per cent of the population to 51 per cent of the population), the percentage of Americans who are upper income surged from 14 per cent of the population to 20 per cent of the population.
According to Pew, the shrinking middle and rising top comes from two trends: “Larger income gains for upper-income households than for others and a decline in the share of adults who live in middle-income households,” as well as a growing “share of the adult population living in upper-income households.”
Granted, some of the middle class also fell lower on the ladder. But the majority of those who disappeared from the middle wound up at the top.
A majority of middle-class adults in the survey say they have a better standard of living now than their parents had at the same stage of life. A majority also say they expect their own children’s standard of living to eventually surpass their own.
And many more of the middle class say they grew up in the lower-middle or lower class (40 per cent) than say they grew up in the upper-middle or upper class (16 per cent); 44 per cent say they grew up in the middle class.
I suspect the numbers for the upper class would also reflect this mobility – even if conventional wisdom today also tells us that mobility is dead.
Do you think the wealthy have gained at the expense of the middle class since 1980?
More from CNBC:
- The Fear and Loathing of the One per cent
- Voters: Tax the Rich, But Fix the Rest First
- The Falling Fortunes of the One per cent
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