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Letter to the editor

U.S. middle class is hardly on the endangered list

By STEVEN PEARLSTEIN Washington Post
Published June 12, 2007

To hear it from Democratic leaders and presidential candidates, you'd think the American dream was melting away as quickly as the glacial ice floes in Greenland.

There is a large kernel of truth in that, but as economist Stephen Rose points out in a provocative new monograph, rumors of the demise of the American middle class are greatly exaggerated. Living standards for most Americans are improving. Not everyone is flipping hamburgers or working at Wal-Mart. To the degree that the middle class is shrinking, it is because more people are rising out of it than falling from it.

For example, it is often reported that the median household income in the United States is $44, 500. Of course, that takes in households of varying size, from singles to the Brady Bunch. So, to get a truer picture of economic well-being, Rose adjusts the data for household size and excludes those headed by people younger than 29 or older than 59. And when he does, it turns out that the median income for the "typical American family" jumps to $63, 000, which in most parts of the country buys a pretty comfortable middle-class lifestyle.

This doesn't mean the middle class isn't shrinking. From 1979 to 2004, Rose calculates, the percentage of households in the "middle class" category - those with incomes of $30, 000 to $90, 000 - fell to 39 from 47 percent. But it would be hard to describe that as bad news when the proportion of well-off households - those with incomes of more than $90, 000 - rose by nearly 9 percentage points.

Rose's point is not that the reality of middle-class economic life hasn't changed or that the gap between rich and poor isn't growing - those trends are unmistakable. He's ready to acknowledge that 15 to 25 percent of American households are struggling to achieve or maintain what might be called a "middle-class" lifestyle. There is plenty of room in the unfolding economic debate to call attention to the unmet needs of the poor and to demand a more equitable distribution of the gains from trade and productivity growth.

But those are hardly problems to be solved by politically popular tax breaks and subsidies to "save" an American middle class that seems to have done remarkably well in looking out for itself.

[Last modified June 12, 2007, 00:07:59]