To borrow from Mark Twain, a whole lot of people seem intent on reporting if not the death of the American middle class, then at least its demise. Thanks to a Pew Research Report, reported here by the Chicago Tribune as one example, casual readers assume the reports on the death of the American middle class are true. Luckily for Americans, depending on how you look at it, the reports are either false, or true in a positive way.
First, and most importantly, everyone must understand that there is no official or even consensus definition of the middle class.
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...researchers and journalists are pretty much free to make up any definition they want in order to reach their preconceived notion.
That is basically what Pew did, defining the middle class as every household earning between two-thirds and twice the median income...
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First, is the middle class shrinking? The answer depends completely on how you define the middle class. Economists generally study income distributions with quintiles...
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If instead, we define the middle class, as Pew did, by some multiples of the median income (the one right in the middle of the whole population), then the middle class is shrinking.
It also must be noted that even the poor are getting richer.
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Personally, I side with those who care more that everyone is getting richer and also with those who think people escaping the middle class to become rich is a good thing. The fact that the very rich have been making larger income gains than the rest of us doesn’t make us poorer.
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...the big picture and at the actual economic experience of people at all points of the income distribution, it is clear—the death of the American middle class has been greatly exaggerated.
(Excerpt) Read more at forbes.com ...
