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Originally Posted by Wooders0n
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In this report, “middle-income” households are defined as those with an income that is 67% to 200% (two-thirds to double) of the overall median household income, after incomes have been adjusted for household size.7 Lower-income households have incomes less than 67% of the median, and upper-income households have incomes that are more than double the median.
so when the median rises (as it has been) it requires your income to grow at 2/3 of that rate if youre on the border. Thus, even if you see wage growth that outstrips inflation you could still fall short.
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The news regarding the American middle class is not all bad. Although the middle class has not kept pace with upper-income households, its median income, adjusted for household size, has risen over the long haul, increasing 34% since 1970. That is not as strong as the 47% increase in income for upper-income households, though it is greater than the 28% increase among lower-income households.6
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Some researchers, such as Burtless (2015) and Feldstein (2015), make the case that the Current Population Survey data understate household income growth. ↩
so the middle class are getting better off and the lower class are getting better off too. Just because they're not improving as much as the upper class doesn't mean they aren't getting richer and gaining purchasing power.
All of this is relative to others in the best and richest country in the world. You're a lot better off living in the 20th percentile in America right now than you would be in the 80th percentile in a 3rd world country. You're also a lot better off living in the 25th percentile now than you were living in the 50th percentile 100 years ago in America. We are already raising the standard of living for all classes on the aggregate. Why do we now need to focus on raising it even more for some classes just because they've lagged behind in growth rate even when that rate has not gone flat or negative over long periods?