Is the Middle Class Disappearing? Understanding Income Thresholds and Economic Shifts

By Bhupendra Thapa

"Middle-class income is not simply about earning enough, it is about having the financial security to live with dignity today while creating opportunities for tomorrow."

"The middle class is shrinking" has become one of the most repeated lines in American economic commentary. The data behind it is real but the actual shape of that shrinkage is more interesting, and in some ways more hopeful, than the phrase alone suggests.

Defining the middle class

The United States has no single official definition of the middle class. Researchers use different measures depending on whether they want to study relative income, purchasing power, living standards or people's own sense of economic security.

Pew Research Center uses a widely cited definition based on household income adjusted for household size. Under this approach, middle-income households earn between two-thirds and twice the national median. The boundaries change as median income changes, so the definition measures a household's position relative to the rest of the country rather than a fixed standard of living.

This distinction matters when interpreting recent income figures. The Census Bureau reported median U.S. household income of $83,730 in 2024. However, that figure should not be used directly to calculate Pew's middle-income range without adjusting for household size and using consistent price and income measures. Pew's 2024 analysis, based on income data through 2022, placed the range for a three-person household at approximately $61,000 to $183,000 in 2023 dollars.

The range is also not a complete measure of financial security. A family in an expensive metropolitan area may struggle despite earning an income that qualifies as middle class nationally. Another family with the same income may have more disposable income in a lower-cost area. Housing costs, debt, healthcare expenses, savings and family responsibilities all influence how secure a household feels.

The headline: the middle class did shrink

Pew's long-term figures show a clear change in the distribution of American adults. In 1971, 61% lived in middle-income households. By 2021, that share had fallen to 50%.

Income group	1971	2021	Change
Upper income	14%	21%	+7 percentage points
Middle income	61%	50%	−11 percentage points
Lower income	25%	29%	+4 percentage points

Source: Pew Research Center (2022).

The decline was gradual. The middle-income share decreased during each decade from 1971 through 2011, then remained broadly stable through 2021. Over the same period, the upper-income share increased by seven percentage points, while the lower-income share rose by four.

These figures show that the middle-income group became smaller, but they do not tell a simple story of national decline. The increase in the upper-income share was larger than the increase in the lower-income share. This suggests that the change involved both upward and downward shifts in the income distribution, with the upper tier accounting for the larger net gain in population share.

However, the figures compare the distribution at two points in time. They do not follow the same individuals or families throughout the period. It would therefore be incorrect to conclude that seven percentage points of the original middle class personally moved upward while four percentage points fell downward.

The distinction is important because a shrinking middle-income share can reflect economic progress for some households alongside continuing difficulties for others.

Two definitions, two different stories

The disagreement about the middle class becomes clearer when Pew's relative-income approach is compared with the American Enterprise Institute's (AEI) January 2026 report by Stephen J. Rose and Scott Winship.

Pew measures income position relative to the national median. AEI uses an absolute approach in which income thresholds are tied to purchasing power and based on federal poverty guidelines. Its analysis adjusts family income for family size and inflation, then places families into five categories: poor or near poor, lower-middle, core middle, upper-middle and rich.

Measure	Pew Research Center	AEI
Main approach	Income relative to the median	Inflation-adjusted thresholds linked to poverty guidelines
Population measured	Adults living in households	Families
Period compared	1971–2021	1979–2024
Main middle category	Fell from 61% to 50%	Core middle class fell from 36% to 31%
Important additional finding	Both upper- and lower-income shares grew	Upper-middle class grew from 10% to 31%

Sources: Pew Research Center (2022); Rose and Winship (2026).

AEI's findings provide a different perspective. Its core middle class declined from 36% of families in 1979 to 31% in 2024. However, the upper-middle-class share increased from 10% to 31%, while the combined share of families below the core middle class fell from 54% to 35%.

By 2024, AEI estimated that 35% of families were above the core middle-class category, compared with 34% below it. The core group accounted for the remaining 31%.

AEI interprets this pattern as evidence that more families moved into higher income categories rather than experiencing a broad decline in living standards. Its results are relevant, but they must be understood within its particular definition of income classes and its analytical choices.

The two studies are not contradictory in a simple sense. Pew asks how the population is distributed relative to the changing national median. AEI asks how families are distributed across fixed, inflation-adjusted purchasing-power categories. A household can improve its real living standard but remain in the same relative position, or even fall behind the median if other households' incomes rise faster.

Neither method alone captures every aspect of the middle class. Together, they show why the phrase “the middle class is disappearing” needs qualification.

Why a shrinking middle class is not automatically good news

The evidence of upward movement should not obscure the problem of unequal gains. Pew's long-term analysis found that inflation-adjusted median income increased across lower-, middle- and upper-income households between 1970 and 2022. However, median income rose by approximately 55% for lower-income households, 60% for middle-income households and 78% for upper-income households.

The upper-income group's gains were therefore substantially larger. A country can experience rising living standards across income groups while also becoming more unequal in the distribution of income.

Pew also found that the share of aggregate U.S. income received by upper-income households increased from 29% in 1970 to 50% in 2020. This is an important distinction: the share of people in an income category measures how many people belong to it, while the aggregate income share measures how much of the country's total income that category receives.

The distribution of income can change even when the overall economy grows. If upper-income households capture a larger share of the gains, lower- and middle-income households may improve in absolute terms while still finding that the economic distance between them and wealthier households has widened.

Financial resilience matters as well. A household's income category does not reveal how much it owes, how much it has saved or how easily it could manage an unexpected expense. Medical bills, unemployment, housing costs and high-interest debt can create financial pressure even for households that appear comfortably middle income in national statistics.

For that reason, a smaller middle-income share should neither automatically be described as an economic disaster nor dismissed as proof that everyone is becoming better off.

What recent income data tell us

The latest Census figures reinforce the need to distinguish long-term trends from short-term changes. Median U.S. household income reached $83,730 in 2024, but the Census Bureau found that it was not statistically different from the 2023 estimate of $82,690 or the 2019 estimate of $83,260.

This does not mean that every household's income remained unchanged. The national median describes the midpoint of the distribution, not the experience of every income group or family. The Census Bureau also reported that household income at the 90th percentile increased in 2024, while income at the 10th and 50th percentiles did not change significantly from 2023.

The comparison with 2019 is especially useful because it shows that the median had not recorded a statistically significant increase over that five-year period. Yet the result does not establish that the middle class as a share of the population continued to shrink during those years. The Census income report and Pew's middle-class analysis use different measures and cannot be substituted for one another.

The broader lesson is that income growth, income distribution and financial security are related but separate questions. A country can report higher incomes over several decades while experiencing limited progress in the recent past, and a stable median can coexist with significant changes at the top or bottom of the distribution.

Place matters: national averages hide local pressures

The middle class also looks different across American metropolitan areas. Pew's 2016 study examined 229 metropolitan areas using data from 2000 to 2014. It found that the share of adults living in middle-income households fell in 203 of those areas. Median household income also declined in 190 areas between 1999 and 2014.

The study illustrated how different local economies can produce very different outcomes. In Midland, Texas, the middle-income share fell while the upper-income share increased substantially, reflecting the region's energy-driven economic growth during that period. In Goldsboro, North Carolina, the middle-income share declined while the lower-income share rose sharply.

These contrasting examples show why the national figures cannot tell the whole story. In one area, a shrinking middle class can accompany rising incomes and upward movement. In another, it can reflect job losses, declining earnings and households falling into lower-income categories.

The study is historical rather than a description of today's metropolitan economies. Its findings should not be presented as current local conditions. Nevertheless, they demonstrate that the meaning of a shrinking middle class depends partly on where people live and which economic forces shape their employment and incomes.

Cost of living adds another layer. Two households with identical incomes may have very different levels of disposable income because rent, mortgage payments, transportation and healthcare costs vary across regions. National income categories are useful for comparison, but they cannot replace local analysis.

Education and earnings: an important gap, not the whole story

Education is associated with substantial differences in earnings, although it does not determine a person's income by itself.

The U.S. Bureau of Labor Statistics reported the following median weekly earnings for full-time wage and salary workers aged 25 and over in the second quarter of 2026:

Educational attainment	Median weekly earnings
Less than a high school diploma	$803
High school graduate, no college	$994
Bachelor's degree and higher	$1,768
Bachelor's degree only	$1,628
Advanced degree	$1,963

Source: U.S. Bureau of Labor Statistics (2026).

Workers with a bachelor's degree or higher earned about 2.2 times as much per week as workers without a high school diploma. The difference was substantial, and the figures also show why the broad category of bachelor's degree and higher should not be treated as equivalent to a bachelor's degree alone.

However, these figures measure individual weekly earnings, not household income or membership in the middle class. They exclude self-employed workers and do not account for the number of earners in a household, the cost of education, working hours over a year or differences in living costs.

Education can improve access to higher-paying occupations, but the returns vary by field of study, occupation, location and work experience. Family responsibilities, health, discrimination and local employment opportunities also influence earnings.

The appropriate conclusion is not that a degree guarantees financial security, but that educational attainment is an important factor in earnings differences. It should be considered alongside employment quality, living costs, household resources and the ability to withstand unexpected expenses.

Conclusion

The evidence supports neither the claim that the American middle class is simply disappearing nor the argument that its shrinking share proves that everyone is becoming better off. Pew's data show a genuine decline in the proportion of adults living in middle-income households. AEI's analysis, using a different definition, shows that the core middle class also became smaller while the upper-middle class expanded and the share below the core category declined. Both findings can be true because they measure different aspects of the income distribution.

The deeper issue is how economic progress is distributed. Rising real incomes can allow more families to afford goods and services that were previously beyond their reach, even as fewer remain near the middle of the national income distribution. At the same time, unequal income growth means that some households gain much more than others, while housing costs, debt and unexpected expenses can leave even middle-income earners feeling financially vulnerable.

For this reason, the most useful question is not simply whether the middle class is shrinking. It is whether households are experiencing sustainable improvements in purchasing power, economic security and opportunities for advancement. Income thresholds can tell us where families sit in a distribution, but they cannot fully explain how secure those families feel or how well they could manage a financial shock.

A sound assessment should therefore consider several measures together: changes in real household income, the distribution of income gains, local living costs, access to education and employment, and the capacity to save and withstand unexpected expenses. The middle class may be smaller as a share of the population, but the economic meaning of that change depends on whether people are moving upward, falling behind or struggling to maintain their living standards. The numbers are most useful when they help distinguish those different experiences rather than reducing them to one headline.

Sources

Kochhar, R., & Sechopoulos, S. (2022, April 20). How the American middle class has changed in the past five decades. Pew Research Center. https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/

Pew Research Center. (2024, May 31). The state of the American middle class. https://www.pewresearch.org/2024/05/31/the-state-of-the-american-middle-class/

Rose, S. J., & Winship, S. (2026, January). The middle class is shrinking because of a booming upper-middle class. American Enterprise Institute, Center on Opportunity and Social Mobility. https://cosm.aei.org/wp-content/uploads/2026/01/The-Middle-Class-Is-Shrinking-Because-of-a-Booming-Upper-Middle-Class-1.pdf

U.S. Bureau of Labor Statistics. (2026, July 21). Usual weekly earnings of wage and salary workers: Second quarter 2026. https://www.bls.gov/news.release/wkyeng.htm

U.S. Census Bureau. (2025, September 9). Income in the United States: 2024 (Report No. P60-286). https://www.census.gov/library/publications/2025/demo/p60-286.html

Fry, R., & Kochhar, R. (2016, May 11). America’s shrinking middle class: A close look at changes within metropolitan areas. Pew Research Center. https://www.pewresearch.org/social-trends/2016/05/11/americas-shrinking-middle-class-a-close-look-at-changes-within-metropolitan-areas/