Household Incomes: The Decline of the "Middle Class" 2020 Update
The median household is the statistical center of the Middle Class. In terms of income, this class has not gained much in recent decades. Let's take a closer look at a troubling aspect of the Census Bureau's latest annual household income data, issued in September.
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 of the annual data for 2020. 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 2020 average income is just below the all-time highs in both in the median and mean series.