A middle class theory of relativity: 4 benchmarks

How is the middle class doing? This question is being asked with increased urgency by policymakers and scholars, and of course by the Future of the Middle Class Initiative here at Brookings. The most recent substantive contribution to this debate comes in the shape of the new OECD report Under Pressure: The Squeezed Middle Class (April, 2019). The picture, as usual, is a pretty depressing one. As the report authors put it, “over the past 30 years, middle-income households have experienced dismal income growth or even stagnation in some countries.”

The general message of scholarship, commentary and journalism is that the middle class is shrinking, stagnating, sliding, being squeezed, hollowed out, left behind – or some combination of these. A few countervailing voices point out that incomes are still growing, at least for most people; that median incomes are in fact rising, even if more slowly; and that one reason the middle class is shrinking (on some definitions) is because more people have become rich.

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