It’s Over: The Middle Class Is Disappearing

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THE MIDDLE CLASS IS DISAPPEARING:

A recent report just found that The total population of the middle class in “the U.S. has dropped from 61% in 1971 to 50% in 2021." It’s also said that “the average wealth of the middle 40% had dropped by 7%, or $27,000, since March of last year," which equates to the largest drop on record since the 2008 Great Financial Crisis.

Less than a year ago, Fortune also stated that the “middle class is bracing for its next financial blow,” and according to Yahoo, the former backbone of America is finally “at the end of an era,” with middle-class wealth having peaked in February of 2022.

HOWEVER, not everyone agrees, and depending on the data you look at, the middle class might not be shrinking in the way that you think:

According to the Brookings Institute, the middle class isn’t disappearing - it’s just INCREASING: As they say, the bottom 1/5th has 25% more income in 2007 than they did in 1979, when you account for “government transfers, the value of health insurance, and the decline in household size.”

They also found that the middle FIFTH increased by 37% throughout that same timeframe and that the middle-class TODAY is a LOT better off than the middle class of the 1970s, given the abundance of government programs and assistance.

As they say, “The middle class is not shrinking or becoming impoverished. Rather, changes in workers’ skills and employers’ demand for them, along with changes in families’ size and makeup, have caused the incomes of the well-off to climb much faster than the incomes of most Americans.”

A separate study also reported that, yes - the middle class is shrinking - but only because they’re moving into higher-income groups. From 1971 through 2021, the middle class shrunk as a disproportionate amount became “upper-class.”

It’s also true that, while the United States has the smallest middle class of similar nations…we also have the largest “affluent class” and “poverty class” - suggesting that, perhaps…people are either just getting richer, or they’re getting poorer.

So, overall, it does appear as though the middle class IS slowly disappearing - but the good news is that, according to the statistics, there’s now a greater likelihood of moving up into a HIGHER income bracket than at any other point in history.

That’s why, I think it’s so important to double down on your career skills, stay out of consumer debt, live below your means, invest consistently and, if you have the appetite for risk, possibly start that side hustle business you’ve always wanted to do.

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