May 13, 2016 9:59AM 

# The Middle Class Shrinks as the Number of High Income Households Grows 

By [Chelsea Follett](https://www.cato.org/people/chelsea-follett) 

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The day before yesterday, *The Washington Post* ran a [piece](https://www.washingtonpost.com/news/wonk/wp/2016/05/11/the-middle-class-is-shrinking-just-about-everywhere-in-america/) with the alarming headline, “The middle class is shrinking just about everywhere in America.” Although you wouldn’t know it from the first few paragraphs, a shrinking middle class [isn’t necessarily a bad thing](http://humanprogress.org/blog/the-middle-class-fared-better-than-you-think). As Human​Progress​.org Advisory Board member Mark Perry has [pointed out](https://www.aei.org/publication/yes-americas-middle-class-has-been-disappearing-into-higher-income-groups/), America’s middle class is disappearing primarily because people are moving into *higher* income groups, not falling into poverty.

![label ](/sites/cato.org/files/styles/pubs_2x/public/download-remote-images/humanprogress.org/167879611249/ShrinkingMiddleClass.png?itok=x5U7qE37) 

[Data from the U.S. Census Bureau](http://humanprogress.org/static/3275) shows that after adjusting for inflation, households with an annual income of $100,000 or more rose from a mere 8% of households in 1967 to a quarter of households in 2014.

[According to the Pew Research Center](https://www.aei.org/wp-content/uploads/2015/12/Pew.png), 11% fewer Americans were middle class in 2015 than in 1971, because 7% moved into higher income groups and 4% moved into lower income groups. The share of Americans in the upper middle and highest income tiers rose from 14% in 1971 to 21% in 2015.

One has to read fairly far into the Washington Post’s coverage before seeing any mention of the fact that a shrinking middle class can mean growing incomes:

> “\[In many\] places, the shrinking middle class is actually a sign of economic gains, as more people who were once middle class have joined the ranks at the top. \[For example, in\] the Washington, D.C. metropolitan area, the share of adults living in lower-income households has actually held steady \[from 2000 to 2014\]. The households disappearing from the middle-class, rather, are reflected in the growing numbers at the top.”

Other cities with a shrinking middle class, a growing upper class and very little change in the lower class [include](https://img.washingtonpost.com/wp-apps/imrs.php?src=https://img.washingtonpost.com/blogs/wonkblog/files/2016/05/middle-income_1024.png&w=1484) New York, San Francisco and New Orleans. So the next time you hear someone bemoan the “shrinking middle class,” take a closer look at the data and keep in mind that it may actually be a sign of growing prosperity.

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