As Wealthy Surge, U.S. Poor and Middle Class Incomes Have Gone Backward

Poorer households saw their income drop from a median of $26,373 in 1999 to $23,811 in 2014, according to new research

By Nadia Prupis, staff writer for Common Dreams

Middle- and low-income households in the U.S. made less money in 2014 than they did in 1999 as the middle class lost ground in almost 90 percent of the country's metropolitan areas, a new analysis by the Pew Research Center has found.

The report looked at 229 of the 381 federally designated "metropolitan statistical areas" in the U.S., from Seattle to Boston, which accounted for 76 percent of the nationwide population in 2014. 

It found that poorer households saw their income drop from a median of $26,373 in 1999 to $23,811 in 2014, while middle-class incomes fell from $77,898 to $72,919 in that same time period.

The erosion of the middle class came as household incomes decreased, "a reminder that the economy has yet to fully recover from the effects of the Great Recession of 2007-09," Pew said—but more than that, it is a reflection of rising income inequality.

The report continues:

The current and future status of the American middle class continues to be a central issue in the 2016 presidential campaign. Moreover, new economic research suggests that a struggling middle class could be holding back the potential for future economic growth. The national trend is clear—the middle class is losing ground as a share of the population, and its share of aggregate U.S. household income is also declining.

With fewer families in the middle tier, the gap between rich and poor is widening, the report found, with the share of adults in lower-income tiers rising in 160 areas.

The report follows a previous Pew analysis which found that for the first time in more than 40 years, the middle class is no longer the majority in America.

"The deeper root at what is driving inequality and really hollowing out the middle class—that is a pattern very strong in the metro areas," Rakesh Kochhar, associate director of the Pew Research Center, told the Los Angeles Times. "It is cutting across all communities. No one seems immune to this widening inequality trend."

"You can't say this is a very positive change," he added. "[T]his movement reflects more inequality in income and can be a hindrance to economic growth."