The Middle Class Shrinks As People Get Richer

The Middle Class Shrinks As People Get Richer by Chelsea German, Foundation For Economic Education

Alarming Headlines Conceal Generally Good News

Last week, the Washington Post ran a piece with the alarming headline, “The middle class is shrinking just about everywhere in America.” Although you wouldn’t know it from the first few paragraphs, a shrinking middle class isn’t necessarily a bad thing.

As Mark Perry has pointed out, America’s middle class is disappearing primarily because people are moving into higher income groups, not falling into poverty.

Data from the U.S. Census Bureau shows that after adjusting for inflation, households with an annual income of $100,000 or...