Daily Factoid: Is the middle class shrinking? Not if you're a senior.

In his recent State of the Union Address, President Obama hammered away at the idea of "middle class economics". He outlined policies to address the shrinking of the American middle class by increasing upward mobility among the working poor (e.g. making two year college tuition-free) and shoring up the erosion of the existing middle class' purchasing power (e.g. with some form of universal child care for working parents.)

Yesterday, the New York Times' Upshot team of Alicia Parlapiano, Robert Gebeloff, and Shan Carter analyzed broad trends in American class mobility and purchasing power. They defined 'middle class' as people in households earning from $35,000 to $100k in present-day dollars.

The Times' view is that in the last third of the 20th c, the share of the population in the middle class steadily fell as more and more middle income American households moved into upper-income, six-figure territory (inflation corrected.) However, since 2000, the middle class has been shrinking for different reason—families are falling out of it. 

Where I got interested was when Upshot broke out graphs illustrating the change in the size of the middle class since 1967, by age. People under 30, 30-44, and people 45-64 are all much less likely be members of the middle class today than they were in '67. About 60% of all those groups were middle class at the beginning of the period and today the share is in the mid-40% range.


Senior citizens buck that trend. In 1967, only about 20% of seniors had middle class incomes. Today, 39% of them do. And it's not because more seniors started out rich and ended up in the middle class, either; the number of well-off seniors has increased too. Meanwhile, the number of low-income seniors has happily dropped from about 75% to less than half.

Note that senior citizens are still over-represented among low-income households, although an analysis that examines gross income only (as this one does) ignores the facts that seniors are more likely to own their homes, and less likely to have work-related expenses such as child care or the costs associated with operating a second car.

It's not possible to ascribe the steady increase in the number of middle class senior citizens to a single cause. In case you're wondering, Social Security benefits began in 1940, but there was a 50% increase in total payouts between 1960 and '65. Medicare also began in 1965. The data certainly suggests that this minimal social safety net has a positive impact on the ability of Americans to enter the middle class.