The term 'Middle Class' is included in the Economics edition of the Financial Dictionary. Get your copy on Amazon in Kindle, Paperback or Audio edition. Choose your edition here...
In the United States, the Middle Class is a broadly defined social group found throughout America. There are no exact definitions of what comprises the middle class. Depending on whose standard you use, the middle class in the U.S. is made up of from twenty-five to sixty-six percent of families.
The middle class in America have been responsible for many of the country’s greatest accomplishments. Middle class people are known by characteristics of creativity, coming up with concepts, and consultative abilities. Most middle class people have either obtained a college degree or at least been through some years of college education.
Middle class values are central to the recognized American way of life. These values center around sticking to intrinsically held ethics and beliefs, independence, and innovation. Middle class people prove to be more politically motivated and active than do the other demographics throughout American society.
The income of the middle class ranges widely. It can be from around the national median income to over $100,000 per year. This means that the standard of living for middle class people can similarly vary greatly, dependent on the size of the household in question. This means that families with two incomes that have many members can earn more than a smaller family in the upper middle class that only has one income, even though the latter’s standard of living would be considerably higher.
The middle class in the United States remains the most influential group in American society. They are responsible for the vast majority of teachers, writers, voters, editors, and journalists. The majority of trends within the United States begin with the middle class.
The middle class also pay the majority of the taxes within the U.S., making them an extremely critical group economically. The top twenty-five percent of earners, the overwhelming majority of whom are considered to be middle class, pay eighty-five percent of all taxes in the United States. Meanwhile, the bottom fifty percent pay only three percent, while the wealthiest one percent pay up to thirty-seven percent of the total share of taxes.
Even though the Middle Class are considered to be indispensable to American society and the economy, their ranks are dwindling with time. Data on income demonstrates that the American Middle Class have benefited from much slower growth in income than the top one percent of wealthy wage earners, according to data going back to 1980. This stands in contrast to the rise in income seen in the years after World War II, when the income of the middle class grew at the same pace as did the income of the rich. In the years since then, the rich have out gained the middle class considerably.
As an example, from 1979 to 2005, the after tax earnings of the top one percent grew inflation adjusted by 176% as opposed to only sixty-nine percent for the top twenty percent of wage earners as a whole and only twenty-nine percent for the top forty percent of workers. As a percentage of total gross yearly household income, the top one percent currently make over nineteen percent of all earnings, representing their greatest share of the wealth since the late 1920’s.
Further proof that the critical middle class is shrinking is revealed by the June 2006 Brookings Institution survey. It demonstrated that the neighborhoods of middle income Americans as a percent of all metropolitan neighborhoods have decline dramatically over a thirty year period. From 1970 to 2000, this percentage decreased from fifty-eight percent to forty-one percent. According to this data, the middle class have already fallen well below the significant half of the country’s population that it always represented in the past.