Transcript Middle class: Income and consumption trends

Middle class:
Income and consumption trends
Heather Boushey, Economist
Center for Economic and Policy
Research
21 March 2006
Figure 1. Changes in income share
by economic class
Share of total household income
54%
Middle 60% of households
52%
50%
48%
46%
44%
Top 20% of households
42%
40%
1969
1974
1979
1984
1989
Year
Source: U.S. Census Bureau, Historical Income Tables, Table H2
http://www.census.gov/hhes/www/income/histinc/h02ar.html.
1994
1999
2004
Percent change in annual real
family income
Figure 2. Growth in inflationadjusted family income
1947-1979
2.3
2.4
2.4
1979-2004
2.5
2.4
2.4
1.4
1.1
0.2
Bottom
20%
0.4
Second
20%
0.5
Middle
20%
0.7
Fourth
20%
Top 20%
Family income threshold (lower bound)
Source: U.S. Census Bureau, Historical Income Tables, Tables F1 & F5
http://www.census.gov/hhes/www/income/histinc/.
Top 5%
Figure 3. Inflation-adjusted
median family income
80,000
70,000
Family income (2004$)
60,000
50,000
40,000
30,000
20,000
10,000
0
1947
1952
1957
1962
1967
1972
1977
Year
Source: U.S. Census Bureau, Historical Income Tables, Tables F1 & F5
http://www.census.gov/hhes/www/income/histinc/.
1982
1987
1992
1997
2002
Figure 4. The “two-income trap”
Inflation-adjusted family income
$70,000
$50,000
Fixed costs (mortgage, child care,
health insurance, car, taxes)
Discretionary income
$50,755
$30,000
$20,866
$10,000
$17,834
$17,045
Single-income family early 1970s
Dual-income family early 2000s
-$10,000
Source: Warren and Tyagi, 2005. The Two-Income Trap, p. 51.
Table 1. Relative mobility,
Comparing 1969-79 & 1988-98
Quintile at end of period
Quintile at
beginning
of period
Bottom
1969-79
Bottom
1988-98
Top
1969-79
Top
1988-98
Bottom
49.4%
53.3%
3.3%
4.3%
Second
23.2
25.7
7.7
4.3
Middle
10.2
10.9
18.7
12.6
Fourth
9.9
6.5
23.7
25.8
Top
5.0
3.0
49.1
53.2
Source: Bradbury and Katz, 2002.
Figure 5. Annual hours of work in
married families, 1979 & 2000
Husbands
Annual hours of work
2500
Wives
2000
1500
1000
500
0
1979
2000
Year
Source: Mishel, Bernstein, and Allegretto, 2004.