Rising Income Inequality--but not just the Rich

Stephen J. Rose of the Urban Institute:

I found that the upper middle class has grown substantially, from 12.9 percent of the population in 1979 to 29.4 percent in 2014. Further, with the exception of the bottom 6 percent, real growth occurred throughout the income ladder. However, that growth was unevenly distributed in that people with higher incomes had faster growth than those with lower incomes. Consequently, these findings expand the discussion of rising inequality to focus on more than just the top 1 percent. Indeed, a massive shift has occurred in the center of gravity of the economy. In 1979, the middle class controlled a bit more than 46 percent of all incomes, and the upper middle class and rich controlled 30 percent. In contrast, in 2014 the rich and upper middle class controlled 63 percent of all incomes (52 percent for the upper middle class and 11 percent for the rich); the middle class share had shrunk to 26 percent; and the shares of the lower middle class, poor, and near-poor had declined by half.

The Growing Size and Incomes of the Upper Middle Class