To The Editor:
I recently read Steven Pressman’s article “French Lessons on How to Grow the Middle Class” (The Washington Spectator, August 2018) and was surprised to read that the middle class comprises 50% of the population. Frankly I thought that was high and I wondered if Mr. Pressman could define the middle class. Before I could email you that suggestion, I read an article in Sojourner’s by Tony Campolo entitled “Make Unions Great Again”. He states that the middle class has had a hard time since its buying power had remained flat for the last twenty years. Of course it is entirely possible that both writer are correct, but I would like some clarification. About 15 years ago, I read a book by Doug Henwood that included extensive information about the Gini coefficient measure of inequality. Is that pertinent to this issue?
Dear Ms. Hollingsworth,
In answer to your main question, there are many definitions of the middle class. All are slightly different and give slightly different results; but the big picture is the same in all cases.
My preferred definition starts with household income and adjusts household income for household size based on the amount of additional income necessary to support an additional family member while maintaining the family living standard. The details of this are rather technical and I don’t want to bore you with all the details.
Then I take the median income (adjusted for size) and define middle class families as those with between 2/3 and twice the median. To try to make things a bit concrete here, middle class incomes in 2013 were $54,281-$162,033 for a family of four. In 2018 dollars, this comes out to a bit under $60,000 and a bit under $175.000.
Based on this definition, the US middle class shrank from about 59 percent in the late 1970s to 55 percent in 2000, and 53 percent in 2007, down to roughly 51 percent in 2013 and 50 percent now. This trend is consistent with other inequality measures such as the Gini coefficient (which is an overall measure of income distribution rather than a measure focusing on just the middle class) and the fraction of total income going to the middle three income quintiles. All measures consistently show that income inequality in the US has been rising over time and that the group suffering the most has been those in the middle of the income distribution.
Finally, the issue of unions concerns what has caused the decline of the middle class. There are many theories around, but the one I find most convincing is the lack of government support to the middle class. My article mentions a bunch of policies in France that help families with children. And this is surely important and can explain why France has a larger middle class than the US and why it has not shrunk over time. The decline of unions and the decline of the middle class in the US has occurred together over the past 40 years. However, union membership decline began before the decline in the middle class. Still, the ability of unions to gain benefits for its members (and for non-members who get more from firms that fear the rise of a union) is a contributing factor to the decline of the middle class.