More than 1.2 million American households moved to above $50,000 in annual income between 2016 and 2018, according to Census Bureau data released on Sept. 10, a sign of a growing middle class.
The data is a boon to President Donald Trump, whose platform is centered on a strong economy and promises of increased prosperity.
While in 2016, some 58.5 percent of households enjoyed more than $50,000 in total money income, the share rose to more than 60 percent in 2018. The median household income, meanwhile, rose by nearly 2.3 percent—with all figures adjusted for inflation.
The comparison isn’t quite apples-to-apples since the bureau implemented a new methodology in its latest report that somewhat influenced the results for both 2018 and 2017.
Still, the data bears out a middle-class expansion unseen since the 1960s. Nearly 30 percent of households pulled in between $50,000 and $99,999 in 2018. That’s up from less than 29 percent the year before—the fastest increase since 1968.
Middle Class Woes
America has done a decent job of lifting up its poor, with the number of households earning less than $25,000 a year dropping by about 20 percent since 1968. The improvement is more significant when taking into account that the average household size has decreased from about 3.2 people to 2.5 people in the same period.
Furthermore, the country multiplied its rich (those with households earning over $200,000 year) more than eightfold, to 8.5 percent in 2018 from just 1 percent in 1968.
The middle class, however, had shrunk considerably. While in 1968, over 38 percent of households earned over $50,000 and under $100,000, the percentage dropped to 28.6 by 2014.
Signs of Change
In many respects, 2018 was a significant year for the middle class.
In the first months of 2018, the unemployment rate remained stuck at 4.1 percent, seemingly confirming forecasts of some economists that the 4 percent barrier signifies full employment. But the economy kept adding jobs. By the year’s end, unemployment fell to 3.7 percent, the lowest since 1969. Despite some ups and downs, the rate still stood at 3.7 percent in August 2019.
The progress has been even more apparent for black Americans, whose unemployment rate dropped below 7 percent for the first time in December 2017 and in May 2018 fell further to 5.9 percent. That record held for more than a year until it was also shattered in August as the rate hit 5.5 percent.