Recent analyses reveal a notable shift in America's class structure: the core middle class is shrinking, decreasing from approximately 36% of the population in 1979 to about 31% in 2024. This contraction is not due to increasing poverty, as the share of individuals considered poor or lower-middle class is also diminishing. Instead, this trend is attributed to an overall increase in American wealth, leading to a significant expansion of the upper-middle class.
The upper-middle class has nearly tripled its share of the population, growing from about 10% in 1979 to approximately 31% by 2024. This demographic is defined by economists using the federal poverty line—around $26,000 for a family of three—as a baseline; those earning between 500% and 1,500% of this line fall into the upper-middle class. In 2024, this translates to an annual income range of roughly $133,000 to $400,000 for a family of three.
Economist Scott Winship, one of the researchers behind this data, views this trend as a positive development for the economy. He states that if the goal is increased purchasing power and affordability for more people, then the growth in the upper-middle class is a good sign. However, he acknowledges that while lower-income individuals today are financially better off than their counterparts 50 years ago, their income growth has not matched that of the upper-middle class.
Despite their high incomes, many families within the upper-middle class, earning figures like $250,000 annually, do not necessarily feel wealthy. The high cost of living, particularly expenses such as elite college tuition which can be $100,000 per year, creates financial stress and a feeling that they cannot afford major life goals, leading to a disconnect between their financial standing and their self-perception of wealth.
