Sunday, April 23, 2017

Visualizing the Collapse of the American Middle Class

visualcapitalist |  The fact is many people have less money in their pockets – and understandably, this has motivated people to take action against the status quo.

And while the collapse of the middle class and income inequality are issues that receive a fair share of discussion, we thought that this particular animation from Metrocosm helped to put things in perspective. 

The following animation shows the change in income distribution in 20 major U.S. cities between 1970 and 2015:
Animation: The Collapse of the Middle Class in 20 Major U.S. Cities
The differences between 1970 and 2015 are intense. At first, each distribution is more bell-shaped, with the majority of people in a middle income bracket – and by 2015, those people are “pushed” out towards the extremes as they either get richer or poorer.

A Broader Look at Income Inequality

This phenomenon is not limited to major cities, either. 

Here’s another look at the change in income distribution using smaller brackets and the whole U.S. adult population:

Income distribution
Courtesy of: FT (h/t Metrocosm)

It’s a multi-faceted challenge, because while a significant portion of middle class households are being shifted into lower income territory, there are also many households that are doing the opposite. According to Pew Research, the percentage of households in the upper income bracket has grown from 14% to 21% between 1971 and 2015.

The end result? With people being pushed to both ends of the spectrum, the middle class has decreased considerably in size. In 1971, the middle class made up 61% of the adult population, and by 2014 it accounted for less than 50%. 

As this “core” of society shrinks, it aggravates the aforementioned problems. People and governments borrow more money to make up for a lack of middle class wealth, while backlashes against globalism, free trade, and open borders are fueled