Economists Remain Worried About Slow-Growing Middle Class

By: - May 20, 2019 12:00 am

Katharen and Scott Wiese in the living room of their Lincoln, Nebraska, apartment. Nebraska was one of just two places, with Washington, D.C., where the middle class had recovered to its level in 2000. Kayla Wolf/Lincoln Journal Star via AP

Most states saw growth in the middle class between 2016 and 2017, but the number of households in that group still had not recovered to the levels of 2000.

Only Nebraska and the District of Columbia had a middle class bigger than in 2000, according to a Stateline analysis of American Community Survey microdata at IPUMS USA.

The plight of the middle class, which has yet to regain financial ground lost during the Great Recession, is of increasing concern to economists. The Federal Reserve Bank of Chicago held a conference this month to discuss policy solutions to problems Federal Reserve Chairman Jerome Powell called “crucial” for the nation to tackle in coming years.

“The kind of generational improvements in living standards that were long the hallmark of the American middle class have steadily diminished,” Powell said at the conference.

Between 2016 and 2017, Nebraska’s middle class grew 4 points to 58% of households, the biggest increase and the largest middle class in the nation. The District of Columbia’s middle class grew 3 points to 44% of households, the second biggest increase. Both areas gained in the middle mostly because of decreases in higher-income brackets, as did Maine, which grew 2 points to a 54% middle class.

Vermont, on the other hand, saw its middle class grow 2 points, mostly because of decreases in the bottom income group.

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Tim Henderson
Tim Henderson

Tim Henderson covers demographics for Stateline. He has been a reporter at the Miami Herald, the Cincinnati Enquirer and the Journal News.