Howard Explains Why Middle Class is Shrinking - Hawaii News Now - KGMB and KHNL

Howard Explains Why Middle Class is Shrinking

Today Howard focuses on the vanishing middle class in his "Illustrated Economics."

The following charts are from a report on U.S. income polarization by the International Monetary Fund.
First of all, how do we define the economic classes?
This study starts with median household income.
Then it says, let's call income 50% or more, higher, as upper class.
Let's call income 50% or more, lower, as lower class.
And middle class is everybody in the middle.
So middle class is households with income from 50% to 150% of the overall median.

Using 2005 dollars, this charts those three classes from 1970 to 2014, showing lower class income flat, middle class income rising slowly, and upper class income rising a lot. 
But what percentage of U.S. households are IN the middle class?

This chart shows the percentage of U.S. households in the middle class shrinking from 58% in 1970 to 47% two years ago.
It shrank in that period because a quarter of a percent of households move UP while 3 and a quarter percent moved DOWN in their income.

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