The Middle Class Is Shrinking

Portrait of smiling parents with boy standing in front of their home

You aren’t imagining things; the middle-class is shrinking around the world.

That's according to a global study released yesterday by the Organization For Economic Cooperation and Development. It found that middle-income households are disappearing in developed countries worldwide. The report says the share of middle-income households in developed countries fell from 64-percent in the mid 1980s to 61-percent in the mid 2010s.

The declines were larger in several countries, including the U.S., where the middle-class is about 50-percent of the population. Workers’ income staying flat is part of the reason for the trend and in the world's richest economies, costs are going up faster than inflation, making it harder for the middle class to keep up.

Each generation in the U.S. has seen the middle class shrink. 68-percent of baby boomers were middle class while in their 20s compared to 60-percent of Millennials. Here’s a concerning figure: 20-percent of middle class households spend more than they earn.

Experts say boosting earnings and relieving tax burdens are the only way to fix the problem.

Photo: Getty Images

Chuck and Kelly

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