Income and Wages

Income And The Middle Class

Despite hand-wringing on the part of some politicians over the plight of the middle class, statistics show that if it is disappearing, it's disappearing upward.

  • There has been a net decline in the number of middle class families -- those making below $50,000 a year.

  • But this is because they are moving into higher income categories -- above $50,000 in inflation adjusted dollars.

  • The number of families making more than $50,000 grew from 24 percent of the population in 1970 to 32 percent in 1990.

Statistics developed by John Hineracker and Scott Johnson at the Center of the American Experiment confirm that those who are moving up are doing so because they are working harder.

  • In 1990, of the families that comprised the lowest 20 percent of income, only 45 percent worked at all, and of those working only 24 percent worked full time.

  • By contrast, among families in the top 20 percent, 93 percent had two or more members working -- and 11 percent had four or more workers in the household.

Hineracker and Johnson came to the obvious conclusion: upper income families earn more because they work longer hours at more jobs.

Some contend that the 19 million new jobs created during the expansion of the 1980s were mostly low-wage, deadend jobs. But data from the Bureau of Labor Statistics tell a different story.

  • Thirty-three percent of the jobs were managerial-professional; with production, 19 percent; technical, 22 percent; operators, 8 percent; and services, 17 percent.

  • The average pay for these new jobs was $23,000.

Consider income mobility, in the light of data from the Treasury Department.

  • Of those in the bottom 20 percent of income in 1979, 86 percent moved to a higher income class by 1988.

  • Some 15 percent of those who were poor in 1979 went all the way to the top income category by 1988.

  • And among those taxpayers ranking in the top 1 percent income category in 1979, fully 58 percent fell to a lesser category by 1988.

Source: Walter Williams (George Mason University), "Income Lies and Political Posturing," Washington Times, March 29, 1996.

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