The American middle class is shrinking, and that's OK

The good news is that Americans have never been richer. The bad news is that most of them don’t feel like it.

There has been tremendous growth in income and wealth in the U.S. in the last half century, even for poorer and middle-class households. But because of the nature of that growth, as well as the changing structure of the national economy, a lot of the people who have benefited also believe that the economy isn’t working for them.

It is true the middle class is shrinking. In the 1960s the income distribution of U.S. households looked like a bell curve with a very thick middle. Today there are fewer Americans in the middle — largely because many have joined the ranks of the upper-middle class. In 1967, a little more than 5% of Americans earned or received more than $150,000 (in 2024