Household Incomes: The Decline of the "Middle Class"
The median household is the statistical center of the Middle Class. In terms of income, this class has not fared well in recent decades. Let's take a closer look at a troubling aspect of the Census Bureau's latest annual household income data, issued last week.
We've already studied some key metrics in the annual release:
In this update, we'll focus on the growing gap between the median (middle) and mean (average) household incomes across the complete time frame of the Census Bureau's annual reporting, which began in 1967, to the release this month of the annual data for 2016. Here is a snapshot the clearly illustrates the growing gap between the middle household and the average, which has been increasingly skewed higher by the more rapid income growth of higher income households.
For a more realistic sense of the median-mean gap, here is the same chart adjusted for inflation based on the Bureau of Labor Statistics' Consumer Price Index-Research Series (which we discuss in more detail here). Among other things, we see that the 2016 average income has set another new high, both in the median and mean series.