LOWES IN THE MIDDLE EARTH, BUT THE MIDDLES IN AMERICA HAVE GROWING The middle class is growing, but it’s not the same as it was in decades past.
As we’ve written previously, there are more people earning below $40,000 per year than there were in 1970.
That means that many middle-income earners are now earning far below the levels that were once enjoyed by the working-class families that built America’s middle class.
But that’s not really what we’re talking about here.
Our job is to understand how this new income class grew up.
The numbers that we’ve seen over the past several decades tell us a story that begins at the very beginning, in 1973, when the country was hit by the first-ever recession.
It began with the housing crisis and followed by a series of wars and the Great Depression.
The middle classes that we know today came of age in the aftermath of World War II, when millions of Americans were left out of the postwar boom.
Many of them worked on farms and in factories, and they did not receive the same level of financial security as people of their generation.
The Great Depression was a real economic shock for many families.
The median income of Americans aged 15 to 64 dropped by more than half between 1929 and 1946.
In 1940, the year the Great Recession began, the median income for the bottom quintile of households dropped by 30%.
But by 1947, it had rebounded to nearly $100,000.
By the end of the Depression, the gap had widened to more than $1 million.
By 1952, the middle class had expanded by more that 20%.
But for many middle class families, this economic shock did not translate into increased wages.
By 1960, median income in the bottom 50% had increased only 2.5%.
The bottom quintiles of Americans had seen a 7% decrease in their average wages.
The bottom 60% saw their wages decline by 19%.
In some ways, it’s hard to understand what happened to the middle classes during this time.
They were not seeing a surge in wages in the middle of the economic boom, when many middle incomes were rising.
As the economy was booming in the 1950s, so was the middle.
Yet the middle income quintiles continued to see their wages stagnate or even decline during the Great War, the Korean War and the Vietnam War.
During World War I, millions of American soldiers went overseas to fight for the Allies.
They earned less than their counterparts in the South during the Civil War and Reconstruction.
When the Civil Rights Act of 1964 came into effect, many Americans began to see a widening gap between the haves and have-nots.
The incomes of the top 1% of Americans rose to over $1 billion.
By 1965, the share of the country’s wealth owned by the top 10% of households had increased by more a third.
By 1968, the top income quintile had reached a staggering $13.6 trillion.
The gap between rich and poor grew to over 1,000% by the end