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The American middle class is becoming smaller — and wealthier — than its European equivalent
The American middle class is becoming smaller — and wealthier — than its European equivalent
If you have the nagging sense that income inequality is getting worse in the United States, some new data from Pew Research shows you're not imagining things.
An analysis that weighs the U.S. against 11 countries in Western Europe shows that America holds the tiniest middle class, with just 59% of the United States' population falling between rich and poor on the income scale.
By contrast, 72% of the German population falls into that middle-income bracket — defined by Pew to be between two-thirds the country's median income and double the median — as does 80% of the Danish population.
"Countries with higher income inequality tend to have smaller middle classes," said Rakesh Kochhar, the associate director of research at Pew Research Center.
The green dots in the center section of the chart above show each country's middle-income segment as a share of the total population. Norway is tied with Denmark for the largest middle-income segment; Spain, with 64% of the population in the middle-income bracket, lands at the bottom of Western Europe.
America can also tout another questionable superlative: the largest share of people that are considered low-income. Just over a quarter of the U.S. population (26%) live in low-income households, compared with 13% in the Netherlands and 14% in Norway.
There's one interesting wrinkle to the Pew data: While the U.S. middle-income segment is smaller than in European countries, it takes a higher income overall to make it into that group. The median income for a middle-class household in Italy is $35,608. It's $44,000 in France and $46,000 in Denmark.
But in the United States it's $60,084.
Those extra dollars justify the United States' more exclusive middle class, said Douglas Holtz-Eakin, president of the right-leaning American Action Forum.
"In Europe, I might only have to make $5,000 more to get to the middle class," said Holtz-Eakin. "Suppose I'm poor in the United States — I might have to climb $30,000 to become middle class."
Unlike in Norway, where eight out of 10 people are in the middle-income bracket, "You might feel it means more in the United States," he says.
Indeed, in most of the places that Pew studied, the middle class is actually losing members, not gaining them.
Between 1991 and 2010, the United States' middle-income segment shrank from 62% of the population to 59%. Seven of the 11 European countries saw their middle class decline, some even more steeply.
Only Netherlands, France, Ireland, and the U.K. saw an increase.
"The trend toward a diminishing share of people who are middle class in America is reflected in the majority of countries in Western Europe," said Kochhar. "Inequality is a shared experience across the Atlantic."
http://www.businessinsider.com/ameri...uropean-2017-7
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