America continues to lose the middle class. The upper income population is growing from 17% to 20% since 2000, while the lower income population has grown from 28% to 29%. On balance that looks like the total income should be rising, but the median income has dropped about 8% in nearly the same time. The poor are getting poorer faster than the rich are getting richer. In the middle, the middle class had been the economic majority at 61% in 1977, down to 55% in 2000, and down to 51% in 2014. That majority status may already be lost. The trouble for the economy is that the middle class was the driver for the economy. They were the ones who had discretionary income and spent it on home improvements, a bit more comfort, and occasional luxuries. The lower class had little or no discretionary income. The upper class had excess discretionary income which wasn’t spent but was frequently placed into secure (and frequently tax-avoiding) investments. There does not appear to be any mechanism in place to curtail the economic, and subsequent cultural and political, bifurcation of America.
(Click on the chart for the link.)