Locator: 50434WEALTH.
Gen Z:
The upper middle class is growing; the number of lower middle class is falling. Link here.
America’s middle class is becoming wealthier as more families scale the economic ladder into higher-earning groups. New research shows that the ranks of the affluent have grown markedly over the last 50 years or so, while the lower rungs of the middle class have shrunk.
In 2024, about 31% of Americans were part of the upper middle class, up from about 10% in 1979, according to a report released this year by the right-leaning American Enterprise Institute.
There is no single, standard definition of middle class, or upper middle class, and what counts as a hefty income in one city can feel paltry in another. The AEI report, by Stephen Rose and Scott Winship, classified a family of three earning $133,000 to $400,000 in 2024 dollars as upper middle class.
Households earning more were categorized as rich. The analysis looked just at incomes, not assets such as stocks or real estate.
The authors found that more families now fall into the two highest-earning groups—upper middle class and rich—and fewer fall into the three lower-earning categories.
In 2024, about 19% of American families were considered “poor or near poor,” according to the AEI report, down from about 30% in 1979. The report defined that group as a family of three earning about $40,000 or less in 2024 dollars.
AI prompt:
The WSJ has a very interesting story today -- more Americans are breaking into the upper middle class (https://www.wsj.com/economy/more-americans-are-breaking-into-the-upper-middle-class-bf8b7cb2?mod=WTRN_pos1). There was some analysis but not much -- the usual: the importance of college. College leads to higher-paying jobs and maybe that accounts for 90% of how the middle class is growing.
I wonder, though, if the fact that unions have had a huge effect, and to some extent very counterintuitive. The unions have always improved wages, but long strikes are incredibly damaging to one's finacial situation. It seems to me that labor strikes are less common and much, much shorter.
Divorce and being out of work for any reason will have major effect on financial situation. One wonders whether union workers right now are in the sweet spot: unions helping with income and benefits (particulalry health benefits) but more importantly, minimizing strike action. Thoughts? What do you think is major reason(s) for growing middle class?
Results:
- Gemini failed.
- ChatGPT was incredible.
The reply was very, very long, but this is what I took away:
- top reasons for income growth:
- dual incomes
- smaller families (less college to pay for)
- just as parents are at or entering their high income ages
- higher paying jobs
- steady income (must less disruption in steady work / steady income
- unions have had positive effect on pay scale across the board -- not just unions
- meanwhile, wage increase due to unions is not a major contributor to inflation
- top ways to hurt/destroy a family's wealth:
- divorce
- job instability
- poor-paying jobs