Politics & Policy

Pew Stands By Its Finding That the Middle Class Is Shrinking

(Fotokon/Dreamstime)

Scott Winship’s article (“Being a Member of the ‘Hollowed Out’ Middle-Class Never Felt So Good,” December 14, 2015) about the Pew Research Center’s report “The American Middle Class Is Losing Ground” asserts that the Pew Center used “a wholly arbitrary definition” of the middle class. To the contrary, using a range of income around the overall median household income is a common practice among economists. And changing the precise boundaries does not alter the basic trend: The middle class, as a share of the population, is shrinking.

In our report, middle-income households have incomes from two-thirds to double the U.S. median household income. As the overall median has increased, so too has the income it takes to be middle class. Thus, our definition allows the size and the median income of the middle class to change over time. In that way, it is more flexible than one that would fix the size — the middle two quintiles, say — or fix a specific range of income.

#share#The finding that the middle class is losing ground is the reflection of three clear trends: The share of adults in middle-income households is shrinking; the income and wealth of the middle-income tier is not keeping pace with the tier above it; and, consequently, the distribution of U.S. aggregate household income is shifting from the middle- to the upper-income tier.

But our study also clearly articulates that a greater share of adults has moved up the income ladder rather than down, and that middle-income households have higher incomes today than in 1970. Technical matters, such as the choice of a price index, would affect the estimate of how much incomes have changed. We are wholly comfortable with the use of the Consumer Price Index (research series) in this regard. Using another price index would change neither the finding that the incomes of middle-income households have increased less than the incomes of upper-income households nor the degree to which they have lagged.

Rakesh Kochhar is the associate director of research at Pew Research Center and the lead author of “The American Middle Class Is Losing Ground.”

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