America’s Middle Class Is Shrinking But Still Rich Compared to Europe

April 25, 2017, 4:49 PM UTC

Even as the middle class has been shrinking in the U.S., it’s been growing in places like France, Ireland, the United Kingdom, and the Netherlands.

That said, America’s middle class is still richer than most of its Western European counterparts, a new report by the Pew Research Center shows.

The study documents how the middle class evolved from 1991 to 2010 in 12 countries including the U.S. and 11 nations in Western Europe. In most of those countries, the middle class has been shrinking, but there are a few exceptions.

To be considered part of the middle class, households had to earn between two-thirds to double their country’s median disposable household income. The data were adjusted for household size, inflation, and purchasing power parity to allow researchers to compare cost-of-living differences across countries and time.

A single person in the U.S., for example, would need to have earned between $20,000 and $61,000 to be considered middle class in 2010. For a family of four, it took household income of roughly $41,000 to $122,000 to make the cut.

When it comes to disposable income, middle class households in the U.S. lived on $60,884 at the median, the second-highest level after Luxembourg. But as of 2010, only 59% of Americans were in the middle class—the lowest level of any country in the report.

That’s down from 1991, when 62% of Americans were part of the middle class.

“The American experience reflects a marked difference in how income is distributed in the U.S. compared with many countries in Western Europe,” the researchers noted, adding that income inequality is widest in the U.S. because a relatively high proportion of Americans earn either high incomes or low incomes.

In Italy and Spain, two of the poorest countries on the list, it took between roughly $24,000 and $75,000 for a family of four to be considered middle class in 2010.

Of the countries featured in the report, Ireland, France, the U.K., and the Netherlands had all benefited from two positive trends: a rise in disposable income along with an expansion of the middle class. The trends were most dramatic in Ireland, where about 69% of households were considered middle class as of 2010, up from 60% two decades earlier. Ireland’s rise of the middle class coincided with its rapid economic expansion in the 1990s, a period often dubbed the “Celtic Tiger.”

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