Defining Class - 4/6/16
Many economists have worked to define concepts such as middle class and working class. There are no set definitions. Some define class by income, but as indicated by writer Noah Smith, those definitions can become easily distorted by local differences in the cost of living.
Retirees often have little income, but often control significant amounts of wealth. One can also define class according to educational status. But as Smith suggests, perhaps the most important definition is in people’s minds.
Gallup periodically asks people to assign themselves to one of five classes – upper, upper middle, middle, working and lower. In the year two thousand, nearly fifty percent of survey respondents assigned themselves to the middle class.
That proportion is now below forty percent. The fraction considering itself part of the lower class was well below five percent in the year two thousand. Today, that proportion is about fifteen percent. This comes down to more than perception.
Income inequality in the U.S. has been steadily increasing since nineteen seventy. This has helped to diminish the share of people who feel like they’re in the middle.