The middle class, if defined as households making between $35,000 and $100,000 a year, shrank in the final decades of the 20th century. For a welcome reason, though: More Americans moved up into what might be considered the upper middle class or the affluent. Since 2000, the middle class has been shrinking for a decidedly more alarming reason: Incomes have fallen.
Here, we walk through the trends in some detail. There is no universal definition of middle class, of course. Some definitions are based on occupation or wealth; others take regional cost of living into account. We have chosen a simple one starting at about 50 percent above the poverty level for a family of four ($35,000) and topping out at six figures of annual income ($100,000), adjusting for inflation over time. We realize many households making more than $100,000 consider themselves middle class, but they nonetheless are making considerably more than most households — even in New York or San Francisco.