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Why A Shrinking Middle Class Might Not Be As Bad As It Seems

It all depends on how you measure success

Image Via CC (Credit: Kat Grigg)

According to respected experts, America’s middle class is doing terribly—and wonderfully.


In better newsrooms across America, associate producers are counseled to avoid building segments around “the latest study”—that inevitable report, issued by researchers boasting boilerplate credentials, that’s guaranteed to get a rush of eyeballs or shares before disappearing down the memory hole. And this summer, the risk of trusting “the latest study” is plain to see in the ongoing debate over the middle class.

The International Monetary Fund contends that America’s middle class is shrinking and struggling. “If you look at the size of the middle class in 1975, it was roughly 60 percent of total population,” says Christine Lagarde, the IMF’s managing director. “If you look at the middle class today, it is about 50 percent. So, that’s a significant decline of the middle class.”

But according to a new Urban Institute report, the middle class is diminished because the upper middle class is growing (the lower middle class is shrinking, too). Upper mids made up some 30 percent of the population in 2014, a huge step up from their roughly 13 percent share in 1979.

That report, however, introduced a new way of measuring just what it means to be upper middle class—something none of the wonks churning out studies had gotten around to do. The Institute’s Stephen Rose defines an upper mid household as one “earning $100,000 to $350,000 for a family of three,” as the Wall Street Journal reported. “Instead of inheritors of dynastic wealth or the chief executives of large companies, they are likely middle-managers or professionals in business, law or medicine with bachelors and especially advanced degrees.”

From Lagarde’s point of view, the middle class crisis is “an economic issue, because the middle class has always been the consumption force of this nation. The upper class doesn’t spend as much. The lower class doesn’t have as much to spend.” But from Rose’s view, middle class shrinkage isn’t really bad news if it means more people are moving up—and spending up—the economic ladder.

You could spend a lot of time parsing the studies in a search for the truth. But you could also find some light at the end of the tunnel by throwing some zen koans their way. In a time of massive debt across society, for instance, isn’t income alone a questionable way to measure class and prosperity? Social science offers us an all-you-can-eat buffet of meaningful information. But whether we’re happily middle class or not, it’s up to us to decide what matters.

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