Bruce Bartlett explains what is happening to the shrinking middle class.
In fact, the ranks of the poor have fallen along with those of the middle class.
Using the Times' characterization of any household with an income below $25,000 in 2003 as being poor, what do the data show? We see that this group fell from 33.1 percent of the population in 1980 to 29 percent in 2002. Looking at the data from the other end, we see that the percentage of those making more than $75,000 has risen from 14.9 percent of the population in 1980 to 26.1 percent in 2003.
For Discussion. Suppose that twenty-five or thirty years ago we had frozen the definition of middle-class income as the 25th through the 75th percentiles of the income distribution as of that date. Using those incomes as boundaries and adjusting for inflation, approximately what percent of the population today would be below middle class, middle class, and above middle class?